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Tourism sector looking vulnerable in 2009
June 2009 1811

Tourism ministry monitoring the fall in hotel bookings, taking measures to ease charges in some areas

EGYPT’s Ministry of Tourism reported that foreign tourists to the country totalled around 12.8 million last year, up a strong 15 per cent year-on-year.
The ministry stated that the most important source markets were Russia, Germany, Italy, Britain, Poland, Ukraine, Libya, France, Saudi Arabia and the US. However, according to early indications, the tourism sector looks increasingly vulnerable in 2009, said a report from Business Monitor International (BMI), a London based company which publishes specialist business information on global emerging markets.
It stated that the most recent reports on hotel bookings at the beginning of this year showed a sharp fall compared with the same period in 2008, and that the Ministry of Tourism was monitoring the situation closely, with measures taken to exempt hotels from paying contributions to the Egyptian tourism promotion authority and reductions in fees paid by charter flights.
Adding woes of the tourism sector was an incident in Cairo in February this year, when four people, one of whom was a French tourist, were killed when a bomb ripped through the Khan el-Khalili bazaar. According to Egyptian police, 11 French, three Germans and several Egyptians were among up to 20 others who were injured. This follows the kidnapping of a group of 11 foreign tourists in September 2008 in Aswan.
Due mainly to the deteriorating economic conditions in key source markets, especially in Russia, Eastern Europe and the UK, BMI reported it expected relatively sharp negative growth in foreign tourist arrivals this year, with a slight pick-up in 2010. Declining numbers of tourists from Eastern Europe account for at least 60 per cent of the drop in industry productivity in 2009. Arrivals from Ukraine are down 57 per cent and visits from Russia and Poland have declined by 23 per cent this year, according to Reuters.
The February bombing in Cairo can only exacerbate the downturn in tourism and investment flows to the sector, said the report.
Added to this background, the forecast strength of the Egyptian pound against the Euro and the US dollar, over the short term, will erode some of the country’s competitiveness as a tourist destination.
On the positive side, the BMI reported that after 50 years as the Nile Hilton, the hotel will undergo a $64 million renovation before reemerging as the Nile Ritz-Carlton, Cairo – the capital’s first Ritz Carlton.
These renovations are expected to be completed by 2011 and will include the construction of a new 1,000 seat conference centre. The Ritz-Carlton Hotel Company has been given a 20 year contract on the 431 room hotel, strategically located along the famous river in the heart of Cairo, with the possibility of extension.
The hotel, re-branded as The Nile Hotel, Cairo on January 1 this year, will continue to welcome guests.  A complete restoration and renovation of the half-century old property will commence soon for approximately 18 to 24 months.  The aim is to transform the venerable hotel into a modern benchmark for contemporary luxury hospitality worthy of The Ritz-Carlton brand when it re-opens, while preserving its iconic heritage, according to the Ritz-Carlton corporate website. 
The Ritz-Carlton Hotel Company is present in key gateway cities and exclusive destinations. It is significant present in the region with five hotels and resorts in Bahrain, Egypt, United Arab Emirates and Qatar. Recently announced future properties include Riyadh, Abu Dhabi and Dubai International Financial Centre.
by Cheryl Mandy

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