Security

Unrest delivers huge blow to Egypt tourism

Aug. 22, 2013 at 9:49 AM ET

Mideast Egypt Tourism
Manu Brabo / AP
An Egyptian vendor hangs his stuff outside his souvenir store in the Khan El-Khalili market, normally a popular tourist destination, in Cairo, Egypt, Wednesday, Aug. 21, 2013.

Heshmat Youssef used to make a decent living sailing foreign tourists down Egypt's Nile River. Since political unrest flared, business has dried up faster than water in the desert.

Riots and killings that spiked after the Aug. 14 crackdown against followers of ousted President Mohammed Morsi have delivered a severe blow to Egypt's tourism industry, which until recently accounted for more than 11 percent of the country's gross domestic product and nearly 20 percent of its foreign currency revenues.

The chairman of the Egyptian Airports Company, Gad el-Karim Nasr, said arrivals at Egyptian airports have dropped by more than 40 percent from Sunday through Tuesday compared to the same time the previous week. He said that in the same time-frame, 13,000 tourists, mostly from Germany and Italy, have left the Red Sea resorts of Sharm el-Sheikh and Hurghada — with only 3,000 new arrivals.

With governments in the U.S. and Europe advising their citizens to avoid Egypt, the impact threatens the livelihood of the one in eight Egyptians who earn their money from tourism.

"We want to live in stability and for tourism to come back," said Youssef, who hasn't seen holidaymakers in weeks. "Let us eat already. We are extremely tired."

The latest shock occurred just as Egypt's tourism industry, which injected more than $10 billion into the economy last year, was slowly recovering from the blow suffered from the 2011 uprising against ousted President Hosni Mubarak.

That uprising had already prompted some U.S. operators to pull out of Egypt.

But the drop in U.S. visitors, who favor ancient monuments like the Pyramids outside Cairo and the tombs and temples of the Nile Valley, did not affect the resilient European market. Every year millions of sun-starved Europeans swarm the Red Sea beaches far from the chaos of the cities.

Now, the European market, too, is drying up.

Major European travel companies have canceled bookings through October after televised scenes of chaos and European governments' warnings to avoid Egypt.

"We have canceled all trips to Egypt until Sept. 15," said Anja Braun, a spokeswoman for TUI, one of Germany's biggest travel operators, said the company has canceled all trips to Egypt until Sept. 15. Customers can either rebook a trip to a different destination free of charge or get their money back, she said.

Costa Crociere SpA, one of Italy's main cruise operators, has canceled all Red Sea cruises and stops in Egypt through the 2013-2014 winter season.

In France, the Association of Tour Operators suspended tours to Cairo, the Red Sea and all other cities until further notice.

Even the lucrative Russian market, which accounted for the largest share of foreign tourists at 14 percent, is feeling the effects.

However, relatively few Russians, Germans, Italians, Serbs and others who were already at their beach resorts when violence escalated this month chose to leave early. Tour operators in Slovenia, the Czech Republic, Denmark, Sweden and Norway did fly hundreds of vacationers back home early — sometimes to the dismay of the tourists who said the resorts were quiet and they didn't want to leave.

"There will be losses on all sides, from the souvenir vendors in Egypt to the hotel and bus operators and airlines to the travel agencies in Germany," said Torsten Schaefer of the German Travel Association. "It's too early to say how high the losses will be, but certainly there will be massive cuts for the population in Egypt and livelihoods will be destroyed."

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