Egypt is developing a national strategy to enhance tourism as the country aims to provide a distinguished tourism experience for visitors to Egypt. In this regard, the Ministry of Tourism has been working on several levels to achieve its goals and secure foreign currency in the midst of the latest economic challenges in securing foreign currency. Accordingly, the tourism industry has been performing well, with hopes that the outcome will be unprecedented after implementing the ongoing and future developments, which include empowering the private sector and providing tourist visa facilitation.
Tourism Development in Numbers
During the first quarter (Q1) of fiscal year (FY) 2022/2023, tourism revenues rose by 43.5% to record $4.1 billion from $2.8 billion, according to the Central Bank of Egypt’s (CBE) report on the balance of payments (BoP) performance.
Additionally, the Central Agency for Public Mobilization and Statistics (CAPMAS) stated on September 27th, 2022, that the number of tourists coming to the country increased by 85.4% in the first half (H1) of 2022 to 4.9 million tourists, compared to 2.6 million tourists during H1 2021. The number of tourists from all countries in the world reached 8 million in 2021, compared to 3.7 million in 2020, an increase of 117.5%.
Moreover, Fitch Solutions expects an increase in tourist arrivals to Egypt in 2023 and up to 2026. It forecasts Egypt's tourism revenues to grow by 17.7% to hit $13.6 billion in 2023. Tourism revenues are also expected to reach $17.9 billion by the end of 2026.
Empowering Private Sector for Empowered Tourism Industry
Egypt is working on empowering the private sector and improving the investment climate. The Ministry of Tourism is addressing several aspects, including increasing hotel capacity in the country and diversifying its types, as well as improving the legislative environment, especially in light of the ministry's role as a supervisor, regulator, and licenser to work within the tourism industry.
Hossam Hazzaa, a tourism expert, tells Arab Finance: “The private sector has been always working closely with the government to enhance tourism. The government has been taking successful steps to attract tourists, such as issuing visas upon arrival to certain nationalities or holders of the Schengen visa. The country has also developed logistics and airports and created alluring marketing campaigns. Egypt also increased charter flights that in turn boosted the number of tourists. These efforts helped develop tourism in 2022. As a result, in the latest ITB Berlin, the Egyptian pavilion was the second best among the African pavilions.”
The government can further boost the investment climate to develop tourism in Egypt. Hazzaa explains: “In order to further develop tourism, I think that the country needs to facilitate loans for companies and hotels,” which in turn will help boost revenues.
In a press conference on March 27th, Minister of Tourism Ahmed Issa referred to the Cabinet’s approval of the executive regulations of the Hotel and Tourist Establishments Law promulgated by Law No. 8 of 2022 last February, and to the importance of this law as it includes many advantages for investors in the tourism sector, especially the hotel sector, particularly in facilitating procedures for obtaining a license and coordination between all parties.
Visa Facilitations to Attract Tourists
As Egypt tries to attract more tourists, the government is also expanding the nationalities that are granted visa-upon-arrival rights to include Chinese, Turkish, Algerians, Moroccans, Indians (with GCC residency), and Iraqis (those with visas for developed countries) can now obtain a $25 entry visa upon arrival, according to the minister’s press conference.
Mina Maher, Outgoing Tourism Supervisor at TEZ Tour Egypt, tells Arab Finance that the latest visa facilitations will “help increase the number of incoming tourists.”
The country has also introduced a multiple-entry visa, valid for five years, at a value of $700, and the start of its activation as well as the date of application of all the facilities offered are soon to be announced.
Hazzaa added that “the five-year multi-entry visa is a good step, but in my opinion, $700 is quite expensive. When we look at the US multi-entry visa, for example, it costs around $160 for five years, and the Schengen visa costs €80 for the first time, and then if one travels a lot, it becomes $80 for three years or even five years.”
The success of the multi-entry visa will depend on the targeted client/tourist base. “I think that $700 might attract businessmen who visit Egypt a lot and do not like to go through the procedures every time they visit. However, it would not attract the average tourist. The one-entry visa costs around $25, so the $700 cost for the five-year multi-entry visa will be attractive if the tourist will visit Egypt almost six times a year. In my opinion, the five-year multi-entry visa should cost around $150,” Hazzaa explained.
Attracting tourists to come to Egypt requires cost-efficient programs. “To attract tourists, we better focus on the average spending of the tourist. We should not charge a tourist a huge amount; we attract tourists with an average of $100 in daily spending programs. Then, when the tourist is here, we can start offering appealing extra activities that the tourist would like to do, such as a Nile Cruz, and sell the idea to them,” Hazaa noted.
The ministry’s efforts have already been bearing fruit before the latest visa facilitation. This comes as minister Issa said in the press conference that the new facilitations are a step in the way, pointing out that the results of the first two months of this year, which are January and February, witnessed more than 30% growth in the number of tourists in Egypt, compared to the same two months in 2022.
The new visa facilitations are promising so far, and despite being costly, people are looking forward to an increase in tourism in the time to come.
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