Egyptians wooed to save tourism




By Mark Huband in Cairo

Financial Times, 1 December 1997

Egypt’s national airline has been ordered by the government to cut domestic fares by 50 per cent for three months in response to the crisis facing the tourist industry since the massacre of 58 foreign tourists near Luxor two weeks ago.

EgyptAir has also been instructed to increase the number of domestic flights in the hope of encouraging Egyptians to visit tourist destinations. Mohamed Rayan, chairman of the state-owned airline, said the number of foreigners flying EgyptAir fell by 19 per cent immediately following the attack. Flights from Europe and Japan, where the bulk of the murdered tourists came from, have arrived with as few as 10 passengers on board.

The number flying to Luxor has fallen by 72 per cent. Hotels there have recorded between 5 and 10 per cent occupancy levels.

EgyptAir has not yet assessed the cost of its price cut, nor what potential may lie in an expansion of the domestic market. Kamal el-Ganzouri, the prime minister, yesterday asked banks to review the debt repayment schedules of tourist developers. Banks have yet to respond to a request to suspend loan repayments for three months.

The government has strongly advised hoteliers to avoid mass lay-offs. So far this strategy appears to have been followed, as hotels in Luxor have opted to give staff paid holiday while hoping for the return of visitors.

However, with some foreign tour operators cancelling Egyptian holidays altogether, Red Sea and Sinai resorts, which have been totally unaffected by the militant Islamist violence witnessed in Luxor and elsewhere since 1992, are now also experiencing a catastrophic fall in the number of visitors.

© Financial Times