Home | | Contact Us

Ministry of Tourism: No More Touris

Ministry of Tourism: No More Tourism Companies until March 2017
The Minister of Tourism has issued a decision, to extend his previous one, that no applications to establish new tourism companies will be accepted for one year.[1] The decision means that Egypt continues to temporarily freeze any expansions in its tourism sector, as a result of the sharp decline the sector has been suffering from since 2011.
Background
Proceeding January 2011, the tourism sector has represented around 6.5% of national income, 40% of total services exports, and 6% of direct employment. It has been a primary source of foreign currency, generating more than $10 billion annually. Even with the decreased numbers of incoming tourists and their spending revenues in the past five years, yet, the tourism sector has continued to constitute around 2.5% of national income and 16% of total exports, and generate an average revenue of $5 billion annually. In light of the negative implications the tourism sector has been facing starting 2011, due to root changes in the political environment and the consequent deterioration in the security and economic situations, the Egyptian government has resorted to cease the acceptance of any new applications to establish new tourism companies starting March 2011.[2] Although the March 2011 decision was issued on a temporary basis, however, the continuing recession of the tourism sector has led to its frequent extension. It has been renewed in March 2012, March 2013, March 2014, March 2015, and then in March 2016 by means of the current decision. The said decisions are a reflection of the continued deterioration of the tourism sector starting the January 2011 revolution and its consequences; further worsening in the aftermath of the Russian Plane crash on 31 October 2015. Consequently, supply in the tourism sector has been decreased with the aim of focusing support in the meantime on the already existing companies. The "Support Tourism Initiative" launched by the CBE on 13 March 2013 (which was thoroughly highlighted with its recent updates in the Egypt Legal Update edition on the first week of March 2016) is an example of government efforts to support the tourism sector. The Initiative focused in particular on credit provisions granted to existing clients, with the aim of financing specific tourism-related activities.
Conclusion
Despite the efforts above, the tourism sector still suffers greatly as a result of the continued worsening of the security situation on one hand. On the other hand, the sector suffers other obstacles, such as the lack of adequate training and efficiency enhancement programs for those working in the sector; the lack of sufficient financing and provisions required to support the small and medium enterprises working in tourism; the lack of plans that would support hotels and other tourism-related establishments in maintaining their labor during recession through paying their social security benefits and salaries; and finally the lack of financial grants granted to hotels and other tourism-related establishments to protect them from further deterioration during recession. [1] Minister of Tourism's Decision No.227/2016, Egyptian Gazette, Issue No. 49 (a), 29 September 2016. [2] Minister of Tourism's Decision No.84/2011, Egyptian Gazette, Issue No. 75, 31 March 2011.
The Minister of Tourism has issued a decision, to extend his previous one, that no applications to establish new tourism companies will be accepted for one year.[1] The decision means that Egypt continues to temporarily freeze any expansions in its tourism sector, as a result of the sharp decline the sector has been suffering from since 2011.
Background
Proceeding January 2011, the tourism sector has represented around 6.5% of national income, 40% of total services exports, and 6% of direct employment. It has been a primary source of foreign currency, generating more than $10 billion annually. Even with the decreased numbers of incoming tourists and their spending revenues in the past five years, yet, the tourism sector has continued to constitute around 2.5% of national income and 16% of total exports, and generate an average revenue of $5 billion annually. In light of the negative implications the tourism sector has been facing starting 2011, due to root changes in the political environment and the consequent deterioration in the security and economic situations, the Egyptian government has resorted to cease the acceptance of any new applications to establish new tourism companies starting March 2011.[2] Although the March 2011 decision was issued on a temporary basis, however, the continuing recession of the tourism sector has led to its frequent extension. It has been renewed in March 2012, March 2013, March 2014, March 2015, and then in March 2016 by means of the current decision. The said decisions are a reflection of the continued deterioration of the tourism sector starting the January 2011 revolution and its consequences; further worsening in the aftermath of the Russian Plane crash on 31 October 2015. Consequently, supply in the tourism sector has been decreased with the aim of focusing support in the meantime on the already existing companies. The "Support Tourism Initiative" launched by the CBE on 13 March 2013 (which was thoroughly highlighted with its recent updates in the Egypt Legal Update edition on the first week of March 2016) is an example of government efforts to support the tourism sector. The Initiative focused in particular on credit provisions granted to existing clients, with the aim of financing specific tourism-related activities.
Conclusion
Despite the efforts above, the tourism sector still suffers greatly as a result of the continued worsening of the security situation on one hand. On the other hand, the sector suffers other obstacles, such as the lack of adequate training and efficiency enhancement programs for those working in the sector; the lack of sufficient financing and provisions required to support the small and medium enterprises working in tourism; the lack of plans that would support hotels and other tourism-related establishments in maintaining their labor during recession through paying their social security benefits and salaries; and finally the lack of financial grants granted to hotels and other tourism-related establishments to protect them from further deterioration during recession. [1] Minister of Tourism's Decision No.227/2016, Egyptian Gazette, Issue No. 49 (a), 29 September 2016. [2] Minister of Tourism's Decision No.84/2011, Egyptian Gazette, Issue No. 75, 31 March 2011.