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Tuesday, 25 January 2022

Tourism revenues returned to pre-pandemic levels in 2021

It’s official: Tourism is back. Tourism revenues surpassed USD 13 bn in 2021, returning to pre-pandemic levels, Al Borsa reports Deputy Tourism Minister Ghada Shalaby as saying, citing a Reuters story. The sector has been recovering on the back of the lifting of travel restrictions worldwide and mass vaccination programs at home and abroad. Tourism revenues hit a record high of USD 13.03 bn in 2019 before dropping nearly 70% in 2020 on the back of the pandemic.

The recovery looks to have been faster than anyone expected: 2021 revenues eclipsed the USD 6-9 bn target set by the ministry last summer. And lest we forget, this time last year the ministry wasn’t hoping for a recovery in tourist numbers until the fall of 2022 — while others had said we might not see the sector bounce back until 2024.

Most of the revenues came in 2H2021: Tourism revenues reached around USD 3.1 bn in 1H2021, according to balance of payments data — meaning that revenues in the second half of 2021 recorded at least USD 9.9 bn (surpassing the range the ministry had hoped to see for the full year.)

What about arrivals? While we don’t have any data on arrivals for the second half of the year, around 3.5 mn tourists visited the country during 1H2021, which is around the same number who visited during all of 2020. Some 13 mn tourists visited Egypt in 2019.

Helping drive the rebound: Russia lifted its six-year ban on direct flights to Egypt’s Red Sea destinations last July and resumed charter flights in November, bringing plane-loads of Russian tourists to the country. In September, the United Kingdom took us off its travel “red list,” leading to a 400% surge in Brits booking trips to Egypt and Turkey by December. Hotels got a major boost back in October, when the government began allowing them to operate at full capacity for the first time in 18 months.

And Omicron doesn’t appear to have dented recovery: Despite Omicron’s emergence in the last couple of months of the year, travel to our tourist hotspots seemed to remain unaffected, with hotel occupancy rates estimated to have reached 70-75% across the Red Sea.

We’re poised to hit another record this year, according to remarks attributed to Shalaby suggesting that the opening of the Grand Egyptian Museum, slated for 2H2022 and the completion of the EGP 275 bn Sinai Development plan. The inauguration of new tourist destinations such as El Galala and new hotels in El Alamein will also drive growth in the sector.

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