MP Amr Sedky, member of parliament’s economic committee, is optimistic that the Egyptian tourism sector will be able to recover quickly this year as tourist arrivals increased during the first quarter of this year to 2.3 million tourists, up from 1.7 million last year.
Sedky, a former board member of the Egyptian Travel Agencies Association (ETAA), said he that fears growth could be reversed by the declining quality of tourism services.
He believes that the sector needs a comprehensive vision, not just funding. He discussed the sector’s challenges in an interview with Daily News Egypt, the transcript for which is below, lightly edited for clarity.
How do you see the future growth of tourism throughout the year given the tourist arrival numbers achieved in the first quarter?
There is no dispute that there was growth in the sector’s indices during the first quarter of this year and no one can deny that.
But I fear the low quality of tourism services and the possibility of that impacting those indicators, both in terms of numbers or revenues.
I am afraid that there will be a growth in the number of tourists coming to Egypt, then that growth decline after the quality of tourism services decay.
What makes you fear that growth will reverse?
There are problems in the availability of trained labour and there are problems in financing renovation operations that should be implemented at the present time. Many facilities were halted during the past years, which decreased tourism demand in Egypt, but returned to work again during the past few months. These facilities require financial resources to cope with renovation and renewal.
Despite the Central Bank of Egypt (CBE)’s initiative to support the sector through the provision of facilities to finance renovations by 75%, it is still an obstacle facing the sector.
During the last few days, Prime Minister Sherif Ismail met with many tourism investors. What is the message from the state?
The prime minister’s meetings with tourism investors showcased the state’s support for the sector. We do not want funds only, but rather comprehensive visions for operations in the coming period, without eliminating the conflict between different agencies and pushing the growth of the sector.
Do you think that the sector suffers from the lack of a unified plan by the government?
Yes indeed, as tourist investors, despite the circumstances they have been through, are surprised that the Ministry of Irrigation imposed fees on floating hotels or asked for very expensive maintenance of hotels and raised them in dry docks, although this may be done by underwater photography, which reduces expenses.
I would like to say that we must take into account the past conditions experienced by the sector and alleviate its pain through coordination with its employees. The process of lifting the floating hotel cost over EGP 1m, as well as time. These investors stopped their work a lot during the past period.
This does not mean that I want to be lenient in granting operating licenses since the lives of tourists in Egypt are sacred. What I mean is to look for inexpensive ways to develop the sector and not overload.
How do you see the legislative aspect of the tourism sector as a member of the House of Representatives?
The sector requires several laws, the first of which is the unified tourism law which details all the information on the sector’s activities and the different ministries under one umbrella.
This project requires great effort from the state and requires concerted efforts to be undertaken by all state institutions as well as investors.
In terms of existing legislation, the sector is still unable to pay the real estate tax, which we had requested it be exempted from for at least two years to recover.
During the exemption period, investors could revalue their assets as well as reprice their products.
But the Ministry of Finance rejected the request to postpone the real estate tax on the sector.
I expect that the tourism sector will be discussed during the upcoming sessions of the economic committee of the House of Representatives in conjunction with the tourism committee.
Tourism investors are not evading the financial duties placed on them by the state. All they demand is a respite from a seven-year crisis.
In recent times, many complained about unfair pricing. How do you handle that?
Egypt is a free economic country and its economy is based on supply and demand. This phenomenon negatively affects the revenues of the state and companies, as well as Egypt’s tourism reputation due to the low quality of services.
I believe that the state cannot intervene in terms of prices, while the ETAA should treat it.
It is not reasonable that these low prices for hotel rooms in Egypt will continue despite the high cost of operating.
These prices are low due to the entry of outsiders into tourism work and a lack of knowledge of the basis of pricing, which requires a thorough understanding of direct and indirect expenses.
The owner of an establishment may be able to pay direct expenses such as wages and others but may miss the cost of training or bringing in qualified individuals, which is bad in the long term.
I believe that the sector needs to hold a large conference organised by your newspaper through its experience in the tourism sector and to be presented with all the obstacles with proposals for solutions by investors and executives.
Some investors are demanding that land offerings should be halted until recovery. What are your proposals in that regard?
That direction is good. However, the state can offer lands to investors to establish service facilities, such as entertainment or large malls in different tourism cities.
As I mentioned earlier, I invite you to hold a conference that brings together all the old and new tourism investors and coordinate among them. Some old investors may want to get financing provided by newcomers.
The new entrants will receive a very fast operating concession in exchange for the exemptions received by the old investors.
The reconstruction of tourism cities that have become ghost towns in some areas is better than the establishment of new cities.
Recently, you submitted a bill to the House of Representatives on the regulation of medical tourism. What is its status now?
The draft medical tourism law submitted to the House of Representatives has been referred to the relevant committees for study.
This law aims to regulate the relationship between tourism and all parties in relation to therapeutic tourism.
There are 1,200-1,300 sites in Egypt that are ready to receive medical tourism throughout the year.
The draft law includes the establishment of an economic authority to regulate medical tourism. There should also be a map of all sites managed by the Ministries of Health and Environment in cooperation with the Ministry of Tourism.
Egypt has two types of tourists, cultural and recreational, the latter mainly for the beaches. This new product will not be linked to time or place, which means increasing the income and development of different communities that have available sites suitable for medical tourism.
The spending rate is more than $150 per night for an average two weeks, versus a spending rate of under $90 per night spanning one week for other types of tourism.