Sinai blasts: Egypt tourism sector to be hit - the question for how long

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The car bombs that killed some 90 people, including foreign visitors, on Egypt's Red Sea coast early Saturday will have a negative impact on tourism beyond the short term, experts predict. On the ground, hundreds of foreign tourists have already packed their bags and flew home from Sharm el-Sheikh on Sunday.

Egypt is one of those countries in the world in which tourism is a substantial share of overall economic activity.  Tourism is Egypt's second largest foreign exchange earner and the country's biggest private sector employer. Egypt accounts for 50 per cent of all tourist arrivals to Africa and the Middle East.

Following Saturday's carnage, industry sources projected that it could take longer to recover than it did from the massacre of 58 foreign tourists at a temple in the southern town of Luxor in 1997.

The Luxor incident threw Egypt's tourism industry into turmoil.  The negative effect was reflected by the data.  Visitor arrivals to Egypt went down by almost 14 per cent from 1997 to 1998.  Egypt's international tourism receipts dropped by 45.4 per cent in1998 compared to 1997.  

Echoing the official line,  Egypt's Tourism Minister Ahmed El Maghrabi said the coordinated bombing attacks on Saturday would have an effect in the short term. The minister hoped the industry would manage to overcome the current crisis in the same way it did last October when another resort in the Sinai Peninsula, close to the border of Israel, was attacked.

Despite the 2004 attack, Egypt tourism sector showed healthy indicators and Chairman of the Egyptian Authority for Tourism Promotion Ahmed Al-Khadem even expected that the number of tourists coming in 2005 would rise to 9 million compared to 8.8 million in 2004.

According to Al-Khadem, Egypt’s income of tourism has risen to $ 6.4 billion in 2005, an increase of 14 % over the previous year.

Egypt has some 100,000 hotel rooms around the country, and the tourism ministry had a target of increasing that number by 10,000 a year over the coming 10 years.