Tourism is one of the most important sectors of the global economy, as it is a major source of income, foreign currency revenues, tax revenues, and employment, especially since a tenth of the world’s population works in it, and hundreds of millions of others earn from it, and it accounts for about 7% of international trade, and 28% of international service exports. In addition, it represents nearly 20% of the gross domestic product of some countries.
Number of tourists increased in the first quarter of 2023 by 86% compared to the same period last year, and reached 80% of pre-pandemic levels, and the Middle East region witnessed the strongest performance in the first quarter of 2023 as the only region that exceeded the levels of 2023. 2019 by 15%, according to a report by the United Nations World Tourism Organization (UNWTO).
Egypt is one of the most important destinations attracting tourism in the world due to its rich and diverse natural resources and tourist, archaeological and human potentials, in addition to its unique cultural heritage, which enables it to maximize its revenues from the tourism sector, especially as it contributes about 11.3% of the total national income, and provides About 13% of the total foreign exchange, and about 12.6% of the total strength of the Egyptian labor market.
The Strategic Forum for Public Policies and Development Studies “Derayah” presents a research paper that illustrates the economic importance of the tourism sector in Egypt, sheds light on the reality of the sector through multiple performance indicators, and monitors the state’s efforts to develop and enhance the sector, and finally recommends many proposals that would support the tourism sector This research paper reached a set of results, including:
-The tourism sector is the third largest source of foreign income after exports and remittances of Egyptians working abroad, with a percentage of about 13%.
-The tourism sector contributes to the country’s gross domestic product, by about 91.4 billion pounds during the year 2021/2022, with a growth rate of 31.5%. compared to the previous year, which amounted to 69.5 billion pounds.
-Tourism revenues increased by an average of 25.7% to record about 7.3 billion dollars (compared to about 5.8 billion dollars), which contributed to the reduction of the current account deficit.
-The net inflows of foreign direct investments in the tourism sector during the second quarter of 2023/2022 amounted to about 98 million dollars, compared to 60.1 million in the first quarter of 2023/2022, and 29.8 million in the fourth quarter of 2022/2021.
-Egypt received 7 million tourists during the first five months of 2023, including 1.35 million tourists during April, the highest level recorded by Egypt during one month in its history.
-Revenues of the tourism sector during the fiscal year 2021/2022 amounted to about 10.7 billion dollars, compared to 4.9 billion dollars in 2020/2021, an increase of 121.1%.
-The tourism is characterized as a labor-intensive sector, with 3 million people working in professions directly and indirectly related to tourism, representing about 12.6% of the total labor force in Egypt.
First: The importance of tourism contributions in Egyptian economy
Many experts and researchers attribute the economic importance of the tourism sector to a variety of reasons and justifications, which can be explained as follows:
-Tourism is a dynamic sector characterized by high growth rates and its large sectoral contribution to GDP growth. It is one of the main sources of foreign exchange in Egypt.
-It is characterized by the expansion of its labor capacity, as its hotel and tourism facilities provide many job opportunities, especially for the youth crowd.
-The development of the tourism sector and the subsequent establishment of new communities in desert and rural areas contribute to the redistribution and migration of the population, and pushes the wheel of Social Development.
Tourism has become one of the pillars of the Egyptian economy, due to its contribution to several economic aspects, the most important of which are:
-It is one of the most important foreign exchange inputs to the national economy, at a rate of about 13%.
According to official data, the tourism sector is the third largest source of foreign income for the country after exports and remittances of Egyptians working abroad, followed by revenues from the Suez Canal and foreign direct investment.
2- The tourism sector occupies an advanced position among the economic activities, in terms of its contribution to the country’s gross domestic product.
The gross domestic product of this sector increased at current prices during the year 2021/2022 to about 91.4 billion pounds, with a growth rate of 31.5%. compared to the previous year, which amounted to 69.5 billion pounds, according to the report of the Ministry of Planning and Economic Development issued in mid-2022.
3-The tourism sector contributes directly to improving the position of the balance of payments and increasing the added value through the revenues that the sector pumps, whether in the form of investments, taxes or fees.
In this context, the Central Bank of Egypt announced in a press release that tourism revenues increased by 25.7%, to record about $7.3 billion (compared to about $5.8 billion) during the first half of the fiscal year 2022/2023 (July-December period), This has contributed to the reduction of the current account deficit.
4- Providing millions of job opportunities: Tourism is a labor-intensive sector, with approximately 12.6% of the total labor force in Egypt working in professions directly and indirectly related to tourism, which often alleviates the problem of unemployment.
Second: indicators of tourism performance growth in Egypt
The growth of tourism performance in Egypt can be measured through four main indicators, which are the number of tourists (inbound tourism), the number of tourist nights, and tourism revenues.
Some experts may add to it the absorptive capacity index as one of the indicators used in evaluating growth indicators.
1- Inbound Tourism Indicators
Egypt received 7 million tourists during the first five months of 2023, including 1.35 million tourists during the month of April, which is the highest level that Egypt recorded during one month in its history, according to the statements of the Minister of Tourism and Antiquities Ahmed Issa, who also confirmed that the incoming tourism movement in the months of January And last February, it witnessed a growth of 35%, compared to the same period last year.
Egypt received about 11.7 million tourists in 2022, up from 8 million in 2021, 3.7 million in 2020, and 13.1 million in 2019.
Some estimates confirm that the last quarter of 2023 will witness a growth in the inbound tourism movement exceeding 28%, which will contribute to reaching the number of tourists to 15 million tourists at the end of 2023, and between 18 to 20 million tourists during the year 2024, according to the estimates of the Ministry of Tourism. Egyptian tourism, which is expected to witness the largest ever tourism movement during the coming period, and exceed the rates of 2010, which recorded visits of about 14 million tourists.
The following figure shows the evolution of the number of tourists to Egypt between 2010 and 2022
2- the indicator of the number of tourist nights
The number of tourist nights increased during the first half of the fiscal year 2022/2023 (July/December period) by an average of 27.2% to record about 78.4 million nights, according to central bank data.
During 2022, the number of tourist nights increased by 39.7%, reaching 131 million tourist nights, compared to 93.8 million tourist nights in 2021, and 43 million tourist nights in 2020, according to the data of the central agency for public mobilization and statistics in June 2023.
3- the carrying capacity indicator
The number of hotel establishments is about 1,199, the number of hotel rooms is about 230,000, the number of tourism companies is about 2,259, and there are about 2,160 archaeological sites, of which 134 are open for visiting, and 43 are antiquities museums, of which 31 are open for visits, and 479 diving and marine activities centers and 1,325 restaurants. And a tourist cafeteria, and 2,407 shops for ordinary and tourist goods, and about 18,190 tourist vehicles, according to the official website of the Ministry of Tourism and Antiquities and the statements of the Minister of Tourism.
The number of natural reserves in Egypt is about 30, representing an area of 13.6% of the total area of Egypt, and the number of airports is about 26 civil airports in June 2022.
4- tourism revenue index
Revenues of the tourism sector in Egypt increased during the first half of the fiscal year 2022-2023 by 25.7% compared to the same period in 2021-2022, according to central bank data.
The revenues of the tourism sector during the fiscal year 2021/2022 amounted to about 10.7 billion dollars, compared to 4.9 billion dollars in 2020/2021, an increase of 121.1%, according to the data of the central agency for public mobilization and statistics issued on June 9, 2023.
The data showed the growth in tourism revenues in light of the obstacles and crises that the sector has been exposed to in recent years due to the corona pandemic and the Russian and Ukrainian crisis, where tourism revenues reached 4.4 billion dollars in 2016/2017 with an increase of 16.2%, 9.8 billion dollars in 2017/2018 with an increase of 123.9%, 12.6 billion dollars in 2018/2019 with an increase of 28.2%, and 9.9 billion dollars in 2019/2020 with a decrease of 21.6%, and 4.9 billion dollars in 2020/2021 with a decrease of 50.7%, and 10.7 billion dollars during 2021/2022 with an increase of 121.1%, as mentioned earlier.
Figure No. (1) shows the volume of tourism sector revenues between 2016 and 2022
The World Bank expects that tourism revenues in Egypt in the next five years will reach:
• $14.2 billion in 2023-2024.
• $18.9 billion in 2024-2025
• $22.8 billion in 2025-2026
• $26.5 billion in 2026-2027
• $28.8 billion in 2027-2028
Third: Plans to promote the tourism sector in Egypt
The national strategy to support tourism in Egypt aims to achieve rapid growth in this industry, ranging from 25% to 30% annually through optimal utilization of the country’s tourism, natural, human and archaeological resources, ensuring their sustainability, and providing distinguished and advanced infrastructure and services to increase the competitiveness of Egypt.
The national strategy to support tourism in Egypt aims to achieve rapid growth in this industry, ranging from 25% to 30% annually through optimal utilization of the country’s tourism, natural, human and archaeological resources and ensuring their sustainability, and providing a distinguished and developed infrastructure to increase the competitiveness of Egypt.
In light of this, Egypt adopts a set of ambitious plans to advance the tourism sector and maximize its revenues, based on a number of main axes and pillars, the most important of which are:
Focus on Marketing and Promotion
The tourism sector plan aims to intensify tourism promotion activities and apply innovative stimulation tools to enhance the product in the face of intense competition from other tourist destinations through a number of important axes such as strengthening the marketing and advertising message abroad and the effective implementation of the international promotion campaign that was contracted with major specialized companies.
Among the most important promotional campaigns are the campaigns “Your vacation is with us” and “The day in Egypt does not end” to promote tourism to Egypt during the summer season 2022, especially in the Arab market and the Gulf region, in addition to stimulating domestic tourism in Egypt.
1-Stimulating tourist investors
State agencies have taken a number of steps to support and stimulate tourism and hotel investments in the country. These steps are as follows:
– The initiative launched by the Central Bank in February of 2017, to finance the renewal operations needed by hotel establishments and fleets of tourist cars, as an amount of 5 billion pounds was allocated for this initiative.
-The central bank returned at the beginning of this year 2020 and launched a new version of this initiative, allocating 50 billion pounds to tourism companies, in order to include the largest possible number of tourism investments inside Egypt.
2-Return to work in the aviation incentive program:
The Egyptian government has sought to benefit from the aviation stimulus program as an effective tool in advancing tourism in Egypt, by encouraging air carriers to direct the largest possible number of their flights to Egyptian tourist destinations, in addition to opening new airlines, such as the Marsa Alam airport, the Netherlands and Ukraine, and another between Georgia to Hurghada.
3-Improving tourist service
The Ministry of Tourism was keen to develop a strategy to qualify and develop the human resource in the tourism sector, in cooperation with the Egyptian Federation of Tourist Chambers, through a training project for various groups working in tourism, such as tour guides, hotel workers and recreational activities, in addition to company representatives and tourist car drivers.
The Egyptian government has also taken several other stimulating and supportive measures for the tourism sector, including:
-Implementing the e-tourist visa system, and automating the purchase of tickets for archaeological sites and museums electronically.
-Establishing a unified database system for workers in the tourism sector, as well as automating the services of the hotel sector.
-The Tourism Promotion Authority signed agreements with many TV stations and markets that deal with Egyptian destinations, to launch advertising campaigns aimed at introducing tourists to Egypt and its various tourist destinations.
Fourth: The tourism sector in the light of international indicators and acclaim
-Egypt advanced 20 places in the safety and security index for expatriates issued by Intentions, which measures personal safety and security as part of the quality of life, as Egypt ranked 42 in 2022, compared to 62 in 2016.
-It ranked 12th globally out of 138 countries in the global Islamic Travel Index 2022.
-It ranked first in the Arab region, fourth in Africa, and 27th globally, in the road trip tourism practice index out of 118 countries, noting that the index depends on 3 sub-indicators (attractiveness, logistics, lifestyle).
-Egypt is on the list of international travel and tourism nominations, where:
Choosing Egypt is among the best tourist destinations to travel to in the fall of 2022, according to a CNN Travel report.
-“Travel Inside” magazine chose Egypt as the first in the world among the most popular tourist destinations during the current period, outperforming many other tourist destinations such as the Maldives and the Caribbean islands.
– Hurghada ranked second as the best tourist destination in the Middle East for the year 2023, after Dubai, which ranked first, according to Tripadvisor.
– Egypt also won the second place as the best diving destination in the world for the year 2021, according to Dive Magazine.
fifth: proposals to promote growth in the tourism sector in Egypt
In order to develop the performance and drive the growth engine of the tourism sector in Egypt, this paper recommends the need to work on:
-Joint cooperation and integration of all efforts between the ministries and the relevant authorities in the sector, each in its field, to achieve more successes and the best desired results to reach the sector to wider horizons.
-Developing stimulating policies for investment, especially hotel investment, tourist transport, the establishment of sports cities and entertainment attractions, increasing the number of hotel rooms … and others.
-Launching tourist economic zones, or free tourist zones, and granting tax and financial privileges and exemptions for specific periods of time, while creating the legislative environment to achieve this in order to increase the attraction of investors towards investment in the tourism sector , by offering units of a tourist nature consistent with international standards on local and international electronic platforms, resulting in an increase in tourist units and hotel rooms.
-Training and qualification of workers in the tourism sector on how to deal with different cultures of tourists and providing them with communication, teamwork and leadership skills.
– The need to launch a unified Egyptian platform for tourism promotion that facilitates booking, flight and visa procedures, as well as hotel reservations.
– Activating the role of tourism media to spread cultural awareness among citizens of the importance of tourism, as well as working to improve the image of tourism among foreigners.