The Ministry of Tourism plans to implement a new stimulus programme from November, subsidising filled seats for up to a year at various airports across Egypt.
The programme will cover airports in South Sinai, the Red Sea, Luxor, Aswan, North Coast, and Marsa Alam, according to Head of the Sub-Accounts Unit of the Ministry of Tourism Adel Ragab.
Subsidy rates for Hurghada, Sharm El-Sheikh, Marsa Alaman, Al Alamein, and Marsa Matruh airports begin at a proportion of 50-90% of the plane’s occupancy rate. The same figure for subsidies at Luxor, Aswan, and Taba airports range from 40-100%, Ragab added.
The new filled-seat stimulus programme is meant to encourage and not serve as insurance, Ragab explained. He added: “The new system is different from vacant seats incentive system, whereby subsidies were granted ranging between 10-15% of the value of the filled seat system.”
The range of subsidies provided for one filled seat is between $30-40, according to Ragab.
The Ministry of Tourism aims to raise revenue growth by 5-10% by the end of this year, according to Tourism Minister Hisham Zaazou.
Inbound tourist arrivals to Egypt fell to 4.5 million tourists during the first half of 2014, representing a 25% decrease from the same period last year.
Ragab said the stimulus programme at Luxor, Aswan, and Taba airports is to the ministry’s desire to increase foreign travel traffic and increase occupancy in hotels in those areas.
The stimulus programme for charter aviation in both Hurghada and Sharm El-Sheikh, generated $26 for every $1 spent over the past three months, according to Ragab, who described this as a high level of revenue.
The finance ministry raised budget allocations for the tourism ministry from EGP 144m for FY2013/2014 to EGP 658m for FY2014/2015.
Allocations to the Tourism Activation Authority (TAA) reached EGP 545m for FY 2014/2015 compared to EGP 95.4m for FY 2013/2014, according to a TAA official.
Ragab revealed that the average tourist expenditures have continuously risen over the past two months, and currently exceeds $74 a night. This compares to the beginning of the year, when the rate stood at $63.3 per night.
According to the Information and Decision Support Center (IDSC) affiliated with the cabinet, August witnessed tourism growth rates of over 95%, with the total number of tourists reaching 995,000.
Ragab said that significant improvements in inbound tourism indicators have been made during recent times, compared to the same period last year.
According to the Association for Tourism Investors in South Sinai Chairman Hisham Aly: “Occupancy rates in Sharm El-Sheikh at present do not exceed 50%.”
He added that growth recorded during the last phase was due to local tourism resulting from the Eid Al-Adha holiday.
Ragab explained that significant tourism growth was witnessed in Sinai recently following various countries lifting travel warnings for the peninsula in October.
Aly hopes that the flow of tourists to Egypt will continue and that the security situation stabilises, saying, “the tourism industry is fragile and is affected quickly.”
Chamber of Diving and Water Sports Chairman Hesham Gabr does not expect the recent terrorist attack on a security check-point in El-Arish, which resulted in the killing of 30 soldiers last weekend, will have any impact on tourism to Egypt.