Cairo Magazine - Closing up shop

Local business owners are pessimistic after their shops were destroyed, but statistically the dip in tourist figures seems to be small, and many in the industry are confident that it will recover.

Summer Said

In the wake of the triple bomb attacks that wrecked the Red Sea resort of Sharm Al Sheikh on 23 July, tourism analysts struggled to determine what effects the incident would have on the sector—no small matter given the industry’s status as Egypt’s number-one foreign currency earner.

“It’s too early to judge what the long-term effect will be,” said Khaled Kandil, area director of business development for Sinai at multinational hotel-chain Accor. “We’re getting some new reservations, but right now there are more people leaving than coming.”

Hala Khatib, spokesperson for the Ministry of Tourism, conceded that the industry would be adversely affected, although she went on to express confidence that the impact—especially on its money-spinning Red Sea resort destinations—would be temporary.

“In the short term, we’ll be affected,” she told Cairo. “Recovery will take some time, but I don’t expect it to take too long.”

Khatib went on to point to international reactions to the incident, such as British Foreign Minister Jack Straw’s comments, quoted in the 24 July editions of UK newspapers, in which he urged Britons to keep travelling. “We are only warning against travel to areas if we believe there is an imminent threat of terrorism or where law and order has entirely broken down,” Straw was quoted as saying. “That does not at the moment apply in respect of Egypt.”

Despite these words of reassurance, hoteliers said the effects of the blast on hotel occupancy rates were immediate. According to industry insiders speaking on state television a day after the attacks, approximately 5 percent of tourists visiting Egypt left the country in the immediate aftermath of the bombings.

Gamal Youssri, director of Sharm Al Sheikh International Airport, also emphasized the relatively small size of departures. “Since the attacks, some 18,000 tourists have left, which is not as bad as we expected. Normally about 10,000 leave every day, and today about 12,000 left, so the percentage is not so high,” he said.

One sales and marketing director at a multinational hotel chain confirmed this figure, estimating cancellation rates at destinations in Sinai—including Taba, Nuweiba and Dahab, as well as Sharm—at between 5 and 10 percent. He was quick to add, however, that tourist venues outside of Sinai had been largely unaffected. “Up until this point, cancellations are mainly from Sinai,” he said. “Some tourists departed early, others went to different locations in Egypt. But for areas outside of Sinai, cancellations have been minimal.”

Comparisons to the last major attack on foreigners, in 1997 when 57 vacationers at Luxor’s Hatshepsut temple were massacred, are being downplayed. The Luxor massacre left local tourism reeling for more than a year.

Khatib stressed the dissimilarity between the attacks, especially within the wider context of a rising incidence of terrorism worldwide. “This is not Luxor. It’s completely different. Eight years have passed since the Luxor attack and much has changed in the world,” she said, citing recent acts of terrorism in the UK, Spain and Turkey. “These days, people aren’t willing to give up their freedom of movement. People aren’t going to just stay at home.”

Nevertheless, Kandil expressed fears that the vital Italian market, which comprises the largest share of visitors to Sinai, would suffer. Two major Italian tour operators temporarily froze their scheduled tour packages after the Italian foreign ministry issued travel warnings against visiting Egypt. On 24 July, national airline Egypt Air launched an aggressive campaign to reassure tourists and tour operators around the world to come to Egypt.

The incident was quickly reflected in the Cairo and Alexandria Stock Exchanges, which fell on the Sunday morning following the attacks, although it rebounded slightly in the afternoon trading session. By the end of the day, the HC market index had fallen by a relatively mild 3.27 percent. “Investors realize that this is the reality of our times, especially after the London bombings,” read a daily stock report by local investment house HC Brokerage. “It’s happening everywhere, and they’re coming to terms with that.” Indicative of the incident’s effect on tourism stocks in particular, the day’s number one loser was local powerhouse Orascom Hotels & Development, whose share prices nosedived by almost 15 percent.

Egyptians working in Sharm, meanwhile, expressed anger at the prospect of major business losses, even if temporary. On the day of the attacks, employees at Nabil Youssef’s Kodak shop, located close to the stricken Ghazala hotel, swept up the remnants of the shop’s front window, blown out by the force of the blast. “This is very bad,” said Youssef. “Who are they targeting? Are we targeting ourselves, Egyptians? What’s the reason?”

Hatem Gamal, the 32-year-old owner of an electronics shop in the same market, concurred. “I think this is the end of tourism in Egypt and in Sharm Al Sheikh,” Gamal said. “We are all taking our stuff and leaving, because we know it is going to be dead here.”

But as local retailers bemoaned their fates in the short term, industry insiders, in a nod to the sector’s traditional resilience, were relatively upbeat. “If no similar incidents occur, I expect business to return to normal levels as soon as the New Year,” Kandil predicted.