The Tourism Development Authority (TDA) refused to cancel fines on investors’ delayed dues so as to not affect its revenue during the next fiscal year, according to an official in the Ministry of Tourism.
The official said in a statement to Daily News Egypt that the fines for which projects under construction owe TDA cannot be postponed; there is a timetable the projects should adhere to.
“As for hotel projects that are already operational, the situation is different,” the official said, as the sector has been suffering from the decline in travel to Egypt over the past four years.
Tourism traffic to Egypt declined to 9.3 million tourists in 2015 compared to 9.9 million in 2014.
Head of TDA Serag El Din Saad stated that the delayed instalments from investors who have received lands from the authority amount to approximately $118m.
The Egyptian Tourism Federation asked TDA not to propose lands at a time of low tourist demand, according to chairman of the federation Elhamy El-Zayat. He said there are already 225,000 operational hotel rooms, and it would be a disaster for the average prices of tourism services if another 200,000 rooms under construction come into service.
Tourists’ average spending in Egypt declined in 2015 to about $63 per night, compared to $73.1 in 2014; the decline in the number of tourists is reflected in the prices of tourist services in Egypt, according to El-Zayat. He added that the supply of hotel rooms should not be increased in order to maintain prices.
Both governorates of Red Sea and South Sinai have 65% of the operational hotel capacity operating in Egypt, according to the Egyptian Hotel Association, while Greater Cairo includes about 20% of the number.
Head of Tourism Investors Association in Nuweiba and Taba, Sami Soliman, said the sector has been suffering from a decline in occupancy rates since about five years ago, which pushed more than 30 hotels to halt operations. Consequently, the state is required to support the sector so as to alleviate the losses suffered by investors, added Soliman.
Daily News Egypt revealed last week that about 20 tourist resorts in the Marsa Alam area are awaiting the TDA’s decision about postponing the instalments to the end of this year, due to the weak occupancy rates since the end of last October.
Head of the Tourism Investors Association in Marsa Alam Adel Radi said the occupancy rates fell sharply after the Russian plane crash. In addition, the murder of Italian PhD student Giulio Regeni has negatively affected the influx of the Italian market to the area.
“Occupancy rates are ranging between 10 and 20%,” said Radi, adding that he hopes this will increase in April.