Egypt’s locally owned hotels, businesses still reeling from tourism decline

Egypt's tourism industry, the second largest source of revenue, has been struggling to make a comeback since former President Hosni Mubarak's ouster.

Political instability as well as a purported rise in crime since January 2011 has bled the industry by as much as $1 billion a month.

Between late January and May 2011, many embassies and missions issued travel warnings and most Western tour groups cancelled their trips leading to a significant loss felt by travel companies across Egypt.

Adla Ragab, economic advisor to the minister of tourism, said that before the revolution, Egypt ended the year 2010 with 17 percent growth in the tourism industry.

Ragab said that 15 million tourists came to Egypt in 2010, generating $12.5 billion for the Egyptian economy. She also says that there was a jump of 11 percent in tourism in the first three weeks of January compared to the same period in 2010.

"We expected an additional 1.5 million tourists generating an additional $1 billion in 2011," Ragab said.

But the sharp decline in tourists in Egypt has hit local business the most.

Dina Abou el Seoud is the first female Egyptian to manage a hostel in Cairo. She tells The Caravan how her establishment - the Dina Hostel - was booming before the January 25 Revolution.

"In December of 2010, after being open for just one year, I doubled the size of my hostel, and for the months of December and most of January, I was overbooked, with people actually sleeping in the common room. But nowadays it is only 10 percent full," she says.

Abou el Seoud says the guests who now patronize her hostel are students waiting to find apartments, and travelers who arrange their own itineraries, not tourists.

Similarly, hotels in Downtown Cairo, such as the Luna Hotel on Talaat Harb Street, have also witnessed a decline in booked rooms.

Manager Hany Moussa says: "Whereas the cost of living in Cairo and Egypt has increased tremendously, hotels have had to reduce their prices significantly or lose any hope of occupancy."

He says Luna Hotel was forced to slash room rates and accommodate guests who do not really generate additional revenue through daily excursions or tours.

"The occupancy rate has been down by about 80 percent or more, when compared to the conditions before the revolution. However, 50 percent of our facilities were occupied for the first time due to group attendances for 11.11.11."

Moussa disagreed with the government's decision to close the Great Pyramid of Giza on November 11 for fears of alleged banned rituals to mark the date; he describes it as a missed opportunity to restore Egypt's tourism industry.

"Many people came to celebrate in peace on this day, and their celebrations were derailed based on unconfirmed allegations from unidentified sources. We cannot afford to miss further opportunities like this."

The Khan El Khalili tourist heart of Cairo, once frequented by thousands of tourists a day, has also considerably suffered. The small handful of patrons has greatly changed the entire atmosphere of the market.

A year ago, one could hardly move in between all the tourists, carts and eager vendors shouting their sales pitches at every potential customer. Now there is plenty of space to walk around.

Mahmud El-Far, owner of a souvenir shop, stands on an empty street in the Khan reading a newspaper and wondering how long the current unrest will undermine his business. The market, usually full of foreign customers, is desolate as a result of the political unrest and the economic crisis after revolution.

El-Far has been working for 11 years in the Khan and is used to welcoming 400 tourists per day, who come to his shop to buy traditional Egyptian clothing and silver antiques. His daily intake was about EGP 5000.

However, after the revolution, he notes that "I can spend two days without any tourists coming in to buy and in six months I lost about EGP 1.5 million Egyptian."

El-Far is married and has three children but due to his loss of revenue, he can no longer pay for his family's basic needs.

"I am losing a lot of money since the revolution and I had to borrow from my relatives. My wife sold her gold to pay for my children's schools," he says.

Sherif El Mahallawi runs a jewelry shop located on the once bustling main street of the Khan.

He estimates that at this time a year ago the ancient market had more than 20,000 visitors a day. Today that number has dwindled to 500 at the most.

However El Mahallawi does not blame the populist uprising for this economic downturn. "The problem does not lie in the revolution, but in the government," he says.

"The existing government is very weak. I think the new government will be worse. We need a miracle."

But Magdy Wahiba, who manages a Khan tailoring shop that has been in his family for generations, believes Egyptians themselves should begin campaigns to bring foreign tourists back to the country.

He appealed to foreigners to spread the word that Egypt is not only safe but open for business. "Has anything bad happened to you in Egypt? Don't believe anyone who says Egypt is dangerous," he says.

Though businesses in the tourism industry are paying a high price for the revolution, the uprising is still quite popular amongst the people. When asked about the revolution, Abou el Seoud said: "I think we need to continue the revolution and finish what we started. Getting rid of the SCAF and putting Egypt on the right path with a civil government is essential. When this happens, I think people will come to support Egypt. People will come running to see the beginning of democracy in Egypt. Of course it will take some time to make the necessary changes in Egypt, but people will start to come as soon as this will happen."

Ahmed Hassan contributed to this article