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Sunday, 23 August 2020

Pandemic or not, tourism may be staging a comeback. Can it last?

We’re seeing indications that tourism may be staging a comeback despite the ongoing pandemic and the acceleration of covid numbers across much of Western Europe.

First up, Dutch airline KLM will make a return to Cairo, with two weekly flights from 9 September to 25 October, according to a company statement last week. While the airline did not specify its plans, it noted that it will assess whether it will keep the destination for the winter season. “KLM's first priority is to offer its customers as much choice of destinations as possible. This may be followed by an increase in the number of frequencies and/or capacity by deploying larger aircraft.” This would be KLM’s first commercial passenger flight to Cairo since it suspended them in 2017 in the wake of capital controls imposed following the EGP float in November 2016.

EgyptAir reported on Friday its highest daily operation rate since 1 July, when Egypt reopened its airports to regularly scheduled flights. The national flag carrier operated 42 flights Friday carrying north of 4k passengers, Masrawy reported.

The good news on the airlines front comes as resorts are seeing more visitors, with over 100k tourists landing in Hurghada and Sharm El Sheikh between 1 July (when Egypt resumed regular commercial flights) and last week, according to a cabinet statement. Tourists visited from Belarus, Ukraine, Switzerland, Hungary, and Serbia. We noted last week that hotel occupancy rates in each of the Red Sea towns nosedived more than 50% in 1H2020. Hotels in Egypt are still operating at the government-decreed 50% capacity as a covid-19 safety measure.

Luxor and Aswan are also gearing up to reopen to tourist groups on Tuesday, 1 September, according to governorate announcements (here and here). Temples, archaeological sites, attractions, and museums will also reopen come September, cabinet’s covid-19 crisis management committee said, according to the governorate statements. Several hotels that were previously closed will also open their doors at the start of the month.

Hotels and other businesses in the tourism and aviation industries are getting a full nine-month holiday on their real estate taxes under a decision approved by the Madbouly Cabinet on Wednesday. The decision extends the six-month tax holiday President Abdel Fattah El Sisi had granted to these businesses earlier this year as part of a stimulus package that also extended income tax deadlines for other businesses. The nine-month real estate tax holiday begins in April and ends in December — meaning tourism and aviation businesses will never have to remit taxes for these months.

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