Known first and foremost for its archaeological treasures that reflect the deep rootedness of the country’s civilization over the centuries, Egypt is committed to developing one of its economic engines, tourism, and especially to diversifying its supply, following political and security crises.
The Arab Republic of Egypt under a semi-presidential regime is led by Abdel Fattah Al Sissi, whose investiture took place on June 8, 2014. With a population of nearly 95 million, this country has a density of 83 inhabitants per square kilometer, while 95% of Egypt’s surface area is desert (France Diplomatie, 2017). The density in the Delta and the Nile Valley, however, is estimated at 1,500 inhabitants/km². With a Human Development Index (HDI) of 0.691, Egypt ranks 114th.
Throughout history, the country has been marked by different events: by the inauguration of the Suez Canal in 1869, then by Nasser as prime minister in 1954 and then as president in 1956, with his nationalization policy, and the Egyptian revolution begun in January 2011 for political and social reforms that led to the demission of President Hosni Moubarak.
Economy and commerce
The country’s Gross Domestic Product (GDP) amounts to 336.3 billion euros in 2016 according to World Bank. It is the result of a diversified economy structured around manufacturing, mining, agriculture, forestry and fishing, wholesale and retail trade, and real estate.
Following the modernization of its economy in 2000, Egypt experienced record growth rates of 7% between 2005 and 2008, according to the French Embassy in Egypt. The financial crisis of 2008 and the fall of President Mubarak in 2011 led to political instability that weakened the economy.
Egypt’s main economic and commercial clients are the United Arab Emirates, Saudi Arabia, Italy, Germany, Turkey and the United States. Its main source countries are China, the United States, Saudi Arabia, Turkey, Russia, Germany and Italy.
“ the ministry of tourism aims to attract 20 million tourists, or $26 billion, by 2020 ”
The tourism sector was particularly affected in the years following the revolution in 2011, but the first signs of recovery were evident from 2014 onwards.
The Ministry of Tourism aims to attract 20 million tourists, or $26 billion, by 2020. To accomplish this, the government plans to expand the tourism offer, namely in the form of group tourism, seaside tourism, cultural tourism, specific activities (golf, yachting, health care, adventure, sports), strengthening quality controls and capacities. It also wishes to develop infrastructures and broaden the spectrum by focusing on business tourism.
The State wants to target more visitors from Asia and the Middle East through marketing campaigns. The country wants to encourage investment in hotels and certain services such as shopping and related infrastructure. Egypt also aims to lead this growth using sustainable development principles. All these activities will be highlighted by an international promotional campaign to raise awareness of Egypt.
With approximately 28 million workers, Egypt considers that it has acquired an educated and skilled workforce. The country claims a developed infrastructure. Three independent mobile phone networks cover nearly 100% of the country’s inhabited land. High speed Internet (using cable) is readily available in urban centers. The country’s 15 commercial ports serve as a platform for exports and imports, while an expanding airport network carries passengers and cargo. Egypt’s Air Cargo Airport currently has three cargo terminals for textiles, vegetables and many industrial products. The country also has an established network of railways and roads. More specifically, the road network extends over 108,784 kilometers and the rail network covers 9,570 kilometers, while the country has 12 major airports: Cairo (CAI), Luxor (LXR), Sharm-el-Sheikh (SSH), Assiout (ATZ), Marsa Alam (RMF), Abu Simbel (ABS), Aswan (ASW), Hurghada (HRG), Marsa Matruh (MUH), Borg El Arab (HBE), Sohag (HMB) and Alexandria (ALY).
“ the country has recently adopted a reform plan to ensure fiscal sustainability and thus strengthen investor confidence ”
Egypt has an abundance of natural resources (oil, natural gas, iron ore, phosphates, manganese, limestone, gypsum, talc, asbestos, lead, zinc). Bilateral or multilateral trade agreements with the Americas, Europe, the Middle East and Africa give Egypt access to several markets and benefit the Egyptian producers who supply them.
Egypt benefits from the presence of the Suez Canal, which is considered to be the shortest route between east and west due to its unique geographic location. Nearly 8% of the world’s maritime traffic crosses the Suez Canal each year.
The country has recently adopted a reform plan to ensure fiscal sustainability and thus strengthen investor confidence. The government has implemented an intensive promotion strategy based on business reform to attract direct foreign investment and special attention from investors such as: a “Contracts Committee” to resolve any conflict that may arise between investors and different government agencies in connection with commercial contracts, amendment of the investment law to allow reconciliation between the two parties, etc. Regarding taxation, corporate taxes are capped at 22.5%.
“ In 2018, the Egyptian Ministry of Transport announced the launch of the Alexandria-Cairo-Assouan electric express train project ”
The project for the new Suez Canal was undertaken in 2015 and allowed for a new 35 km channel running parallel to the existing canal and the widening and deepening of a 37 km section of it.
In 2018, the Egyptian Ministry of Transport announced the launch of the Alexandria-Cairo-Assouan electric express train project. The first phase of the express train project will be connected to the existing rail network’s Borg El-Arab train to connect Alexandria to Cairo. The second phase of the project will consist in updating the Giza-Asyut-Luxor-Aswan line further to the State’s numerous development projects.
As the year begins, the country also plants to undertake the largest water treatment and desalination project in its history. Estimated at approximately $3.96 billion, this investment is intended to provide the population with a permanent supply of drinking water.
In order to cope with the overcrowding of Cairo, a new administrative capital called “Future City” is under construction 45 kilometers east of Cairo between the Suez and Ain Sokhna roads. Extending over 170 km², it is expected to be operational from 2019 and will accommodate 6 million inhabitants. The capital will be home to the government district as well as luxury hotels, residential neighborhoods, a modern airport, a 345-meter tower and so on. Despite the authorities’ desire to make it an intelligent city equipped with modern technologies, the project is not unanimously accepted by the inhabitants and does not have many investors.
Other projects were also announced: the national project for the development of Sinai (more than 6 billion dollars), the Golden Triangle project to make this region a new industrial capital, the national project for the development of Upper Egypt (500 million dollars), the El-Galala plateau project with the construction of the city and a main road, King Abdullah University and a seaside resort on the Gulf of Suez; the project for the development of the north coast with the new town of El-Alamein, the establishment of a large tourist zone and the construction of a nuclear power plant in El-Dabaa.
“ tourism in egypt represents nearly 7% of the GDP, and increases to 11.3%, if indirect contributions Are included ”
Egypt is a country renowned for its vast ancient heritage. The plateau of Giza, in particular, is home to the pyramid of Kheops as well as the Sphinx; Alexandria is legendary for its lighthouse which was destroyed in 1303, Luxor for its temple and its Valley of Kings. Egypt also offers a multitude of sports and recreational activities: hiking in the nature and in the desert, walks near the Red Sea and Sinai coasts, along the Nile, scuba diving, golf, fishing, etc.
Tourism in Egypt represents nearly 7% of the GDP, and increases to 11.3% if indirect contributions, such as travel services, are included. The share of restaurants and hotels is 3.5%. Tourism is also one of the sectors generating direct and indirect employment, accounting for 12.6% of the total volume of employment in the State.
According to the Ministry of Tourism quoting the Central Bank, a tourist, not counting incoming Egyptians, spends an average of $76.7 per day. European tourism represents nearly 70% of the tourist volume, followed by Arab at 15% to 17%, and then Russian tourism.
In October 2015, the Airbus A321 crash had a negative impact on the tourism sector. In response, the government decided in early 2016 to allocate $32 million to the Ministry of Tourism to strengthen checkpoints and equip airports with additional cameras.
Primary local actors
The Egyptian General Company For Tourism & Hotels (EGOTH), founded in 1976, is one of the leading tourism players in Egypt. Subsidiary of The Holding Company, the company belongs to the Egyptian government and owns a cruise on the Nile as well as several international properties: 14 hotels present in Luxor, Cairo, Giza and Alexandria, including the Marriott and Sofitel brands. The group’s hotel capacity is approximately 3,760 rooms. The company also owns land for hotel and tourism development projects.
The Golden Pyramids Plaza is an Egyptian company specializing in entertainment and hospitality. Through the management of the entertainment complex CityStars Heliopolis Cairo, it operates shopping malls, office buildings and has three international hotels in its portfolio: InterContinental Cairo Citystars, Holiday Inn Cairo Citystars and Staybridge Hotel.
Established in 1977, EMECO is a travel agency and the leading Destination Management Company in Egypt. It manages travel services, cruises, transportation and airline divisions. MISR Travel is one of the oldest tour operators in Egypt and the Middle East. The company was founded by the Egyptian economist Talaat Harb in 1934. ORASCOM Development Holding AG is a leading developer of fully integrated destinations with hotels, villas, private apartments, leisure facilities and various infrastructures. It offers a diversified portfolio of global destinations covering Egypt, the United Arab Emirates, Oman, Morocco, Montenegro, Switzerland and the United Kingdom. The group operates a total of 35 hotels with 8,016 rooms.
The REMCO Group has been listed on the Egyptian stock exchange since 1998. The group comprises 8 companies whose projects include hotel complexes, commercial areas, apartments, residences, self-contained hotels and entertainment venues. REMCO selects and acquires land and conceives its development.
The TRAVCO group, founded almost 30 years ago, owns and operates the largest fleet of cruise ships on the Nile, an important collection of hotels and resorts, a myriad of land, sea and air transport services. The group is seeking to expand further and further beyond its borders.
This article was published over a month ago, and is now only available to our Premium & Club members
Access all content and enjoy the benefits of subscription membership
and access the archives for more than a month following the articleRegister
Already signed up? Identify yourself
An articleBuy the article
A pack of 10 articlesBuy the pack
Already signed up? Already signed up? Already signed up? Already registered? Login here!