Cairo – Egypt’s Ministry of Tourism and Antiquities aims to attract 30 million tourists by 2028 and wants to increase the number of visitors by 25% to 30%. Hotel capacity is expected to increase.
“We must boost the country’s hotel capacity to accommodate the planned growth of tourists and further increase the number of rooms in the future, renewing the potential of Egypt’s hotel network and tourism, particularly in the cities of Sharm El-Sheikh, Luxor, Aswan, and others”, Egypt’s Tourism and Antiquities minister Ahmed Issa said.
The Egyptian minister added that the tourism industry is primarily based on the private sector. Therefore, he has made sure to talk to the civil society in this regard, particularly tourism chambers and investor associations. Egypt has tourist attractions that range from historical monuments to natural wonders, with large leisure facilities like resorts around them.
Russian Central Bank
In another context, the Russian Central Bank added nine currencies to its list of exchange rates against the ruble, including the Egyptian pound, the UAE dirham, and the Qatari riyal. This is expected to reduce the reliance on the US dollar in trade and tourism transactions between these countries and the Russians.
Opinions of importers and tourism operators in Egypt differed on the relevance of the decision and its contribution to reducing the demand for US dollar, considering the lack of dollar resources for the Egyptian government and the high exchange rate of the US currency, which is close to EGP 30.
Ahmed Shiha from the importers’ division at the Federation of Egyptian Chambers of Commerce (FEDCOC), said that the US dollar exchange rate went up against the Egyptian pound due to several regions, with the main one being the lack of dollar reserves, as well as speculative transactions in the foreign exchange market.
He stressed that expanding and adopting new currencies, particularly from countries that are some of Egypt’s major trade partners, and the gradual decoupling from the US dollar contribute to reducing the demand for dollar, thus eliminating the parallel market and contributing for the exchange rate stabilization.
He stressed that the announcement from the Russian Central Bank to add the Egyptian pound to its list of exchange rates against the ruble, is a first step towards price stabilization. He also drew attention to the need to get out of the dollar blanket and pave the way to negotiate with other currencies, particularly the Chinese yuan and the Russian ruble, as well as currencies from other Arab countries.
Matti Bishai, head of the Internal Trade Commission of the General Division of Importers of the FEDCOC, told ANBA the volume of Egypt-Russia trade is around USD 4.5 billion a year. He added that the trade balance is favorable for the Russian side, as Egypt imports wheat, oils and seeds, metals, railway wagons, machines, equipment, vehicles and some minerals from Russia.
He explained that the inclusion of the Egyptian currency to the Russian Central Bank’s list contributes to alleviated the pressure on dollar, at least for goods imported from Russia. Moscow also benefits by paying its imports from Egypt in rubles. Furthermore, Russian tourists can negotiate in Egypt using rubles, which reduces the demand for dollars in Russia, too.
Tourism and trade
Tourism operators in Egypt believe the prime beneficiary from the decision will be the trade sector, if the exchange decision is implemented and comes into force. On the other hand, tourism requires that the principle of reciprocity is applied, with the Russian ruble being adopted in Egyptian banks by the Egyptian Central Bank, particularly since Russian tourists account for the largest share of visitors in Egyptian destinations.
Rami Fayez, a member of the Board of Directors of the Chamber of Hotel Enterprises of the Red Sea, said this decision will benefit the trade and balance of payments between the two countries in particular, instead of tourism. Tourism operators are waiting for the Russian payment system Mir to be activated, but its implementation has not been officially approved yet. This payment system is expected to serve as a lifeline for Egypt’s tourism sector and contribute to double the number of tourists from Russia to the country.
Fayez expects the introduction of the Mir system and the negotiation of Russian rubles in Egyptian banks and tourism resorts in the country comes into force during the next period, based on the principle of reciprocity between Russia and Egypt.
Fayez said that if the Central Bank decides to accept the Russian ruble as a circulating currency, the number of Russian tourists bound to the Red Sea and South Sinai provinces, especially in Hurghada, Marsa Alam and Sharm El-Sheikh, will increase a large percentage over the next couple of months. He stressed that if Russia’s tourism companies increase the number of travels to Egypt during the current winter, tourism will see a very good winter season.
Russian tourists account for more than half of tourism in the beaches of Egypt. According to estimates, the number of Russian tourists bound to Egypt in 2022 surpassed 11.5 million people.
Translated by Georgette Merkhan & Guilherme Miranda
