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FEATURE

aiming high

by willa thayer

package-tour vacationers currently make up the bulk of egypt’s record-breaking tourist numbers. officials and private tour operators, meanwhile, are hoping to draw more high-end travelers

on the heels of a bumper year for the national tourism sector, officials and private sector operators are looking to readjust the lopsided tourism equation by targeting more high-end travelers. over the past decade, the country has seen visitor numbers jump from some 2.5 million in 1994 to more than 6 million last year (see table, page 63). this year may well be another record-breaker, having registered 4.5 million visitors during the first six months. although revenues of $3.8 billion in 2002 and $4.3 billion last year make it one of the country’s top two hard-currency earners (the sector vies with the suez canal for number one), few would contest that it has been primarily travelers on inexpensive package tours that have driven the surge.

many officials and operators, therefore, are pushing to focus more on the high-end tourist market, where room nights translate into big money.

the good old days
for a country that has attracted travelers across the centuries on the basis of its rich heritage, it’s only fitting that the new tourism minister should explain the present interest in “luxury travelers” in light of the past. “our shift to the higher-spending end is really about realizing the true value of our previous investments. we started with the high end, but we built our visitor numbers with mass tourism,” minister of tourism ahmed el maghraby told business monthly. shortly after taking up his new portfolio in july, el maghraby said at a press conference that the ministry was eager to develop the sector’s high end.

as el maghraby tells it, the story of the modern tourism sector begins with the steamship-and-white-linen days of middle eastern travel in the late 19th century and the first decades of the 20th, when sumptuous hotels were built by the pyramids and along the banks of the nile in luxor and aswan to cater to those who could afford such amenities. on the basis of that heritage, egypt looked to this luxury model when its tourism industry began to open up again, and five-star hotels mushroomed as then president anwar sadat’s economic opening gained momentum through the 1980s and 1990s.
but it wasn’t long before investors – inspired by the likes of the mena house, the winter palace and the cataract, which had become literary landmarks – had a rude awakening. “developers found out very quickly that the market for so-called ‘upscale tourism’ is rather limited, and those lovely properties started to cater to mass tourism,” the minister said.

still, there’s no reason to believe a total shift to the high end is in the offing. “there’s no doubt that, given the choice, i would like all of our 155,000 rooms to be filled by customers paying $200 [a night], because that means more revenue for egypt. but that’s not realistic. it’s also a risky strategy to target one segment of the market,” said el maghraby.

the sector’s national importance, meanwhile, goes far beyond its direct earnings. “egypt’s main interest must lie in the creation of jobs, and jobs will relate to [tourist numbers],” the minister explained. at a time when official rates put unemployment at 10 percent, el maghraby’s calculation – that each 1 million tourists visiting the country over the year represents 300,000 jobs – is a sobering reminder of the industry’s centrality to the economy.

a jittery niche
the upscale market, though, comes with its own set of problems, and most travel agents in egypt know all too well how volatile the upper end can be. “the high-end tourist is the most pampered, so if we depend only on them, the moment we have problems – as we did over several years in the 1990s – we would find ourselves running on empty, because they’re the first to cancel,” said karim el minabawy, vice president of emeco travel, which specializes in incentive travel and conferences, as well as offering a range of agency services. if a specific destination suddenly seems risky, el minabawy said, “the high-end tourist won’t stay home, they’ll go somewhere else, because they have the option. they’re not as concerned with how much they’ll spend as the package-tour traveler, for whom cost is a major consideration.” the aftermath of the 1997 luxor attack, for example, was a low point.

the key to reducing the risk of empty hotels, said el minabawy, lies in “yield management,” a system of managing reservations currently used by most airlines. this way, a single product is priced according to a range of specific customers who can be predicted to reserve within a certain period ahead of time. conference participants, for example, can be predicted to book farthest in advance, then high-end foreign individual travelers, or “fits.” hotels can then allocate a portion of the remaining rooms to higher-paying business travelers, and then turn over the leftovers to package-tour operators to sell.

el minabawy warned, though, that mixing travelers across the budget spectrum, as egypt is attempting to do, can turn into a bitter cocktail. for instance, a five-star hotel may upset its italian business traveler and luxury guests if it places an activity board for an italian charter-tour company in its lobby, he said, adding, “i can’t mix ceos and teenagers.”

in light of high-end skittishness, el minabawy noted that conference tourism offers particular advantages. those traveling for conferences tend to reserve more expensive accommodation, demand high-end food and beverage services, and may bring spouses along to shop and take in the sights. not only do such travelers usually reserve far in advance, but such bookings tend to be relatively secure. “people will attend, even if they are a little worried about the destination, because, if they don’t, they’ll miss out on developments in their professional field,” el minabawy explained.

this long-term planning process for conferences – destinations are generally chosen a minimum of three years in advance – has resulted in a dry spell for egypt vis-à-vis major international gatherings in recent years. egypt’s last banner year as international conference host was 1994, when cairo was the site of the united nations population and development conference, which drew more than 10,000 visitors. terrorist attacks during the mid-1990s, followed by the outbreak of the al-aqsa intifada in september 2000, reduced egypt’s bidding strength as host of large-scale events.

although high-profile conventions such as the international public relations association conference in 2002 and the recent africa telecom conference indicate that the business is rebounding, these events were on a much smaller scale.

the allure of the nile
as for high-end tourists making leisure visits, many see themselves as following in the footsteps of the legendary travelers of centuries past. as amr badr, managing director of travel agency abercrombie & kent egypt, explained, the draw for such visitors is the “romance of the nile, the cairo and egypt of the 1930s, as in agatha christie’s death on the nile.” preferring to use the term “sophisticated travelers” for this niche, he said, “they come here to take a journey through history, see the depth of this culture, have authentic experiences and meet real people.”

and it’s the people who visitors generally report as being helpful and hospitable, badr noted, which is the country’s ace in the hole. based on feedback from clients, he posited that egypt rates particularly well against other destinations in the region in terms of friendly local service. “compare the situation in egypt to what you see in other parts of the region. in some places, the staff isn’t friendly,” he said. “in dubai, you don’t even have locals – your experience there is with indians, pakistanis, bangladeshis and lebanese.”

even so, dubai is the destination that comes up most often when one asks about egypt’s competitors for high-end tourists. although industry experts are quick to point out that competition can’t be gauged without specifying exact budgets and activities, the emirati city is generally said to best egypt with respect to food and beverages, while at the same time offering a wide range of tourist activities.

in badr’s view, “the quality of food in egypt needs review” – an assessment shared by others, including the new minister. “arabs say the food in egypt needs improvement. the americans and britons who come here say it’s great, but wait until they go to dubai or lebanon. when they try something in a neighboring country, they’ll automatically put you in second or third place,” badr said.
although cairo can’t beat dubai’s shopping or its enviable airline connectivity with destinations across the globe, egypt is becoming stronger in two niches usually associated with the emirates, namely spas – which have mushroomed in the last two years, both in cairo and at various red sea resorts – and desert adventures, or “safaris.”

while desert travel is do-able in countries across north africa and the middle east, egypt has a particular edge, pointed out egyptian tourist authority chairman ahmed el khadem. “our oases are different from those in algeria and tunisia because they have sites from our ancient heritage.” at siwa oasis, for instance, there are vestiges of greek, roman and pharaonic civilizations. while siwa already has an “eco-lodge” catering to high-end patrons, plans are afoot to establish a similar facility at the kharga oasis.

with hot days and temperate nights, socializing in the evening is an important part of arab culture. while nightlife venues in cairo and in the resort cities have multiplied considerably over the past decade, cultural content tends towards either end of the global/local spectrum. on the one hand, there are cosmopolitan could-be-anywhere watering holes, while, on the other, there are plenty of spots offering loose takes on egyptian heritage in the form of kitschy belly dancers.

in this respect, badr sees potential for the promotion of more authentically egyptian activities. mentioning the lucrative café nightlife that has sprung up in beirut’s solidere district, reconstructed using the design vocabulary of ottoman architecture, he said, “egypt could do 10 to 15 solideres.” he envisions such projects being built near original ottoman monuments, with “cafés open around the clock and beautiful cuisine, in an atmosphere that makes people feel they’ve gone back many centuries – but in a confined, clean and well-defined environment.”

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