Can Tourism Deliver Egypt?

Build It and They Will Come. | Can Tourism Deliver Egypt?

 “…the overwhelming reason why countries proffer themselves as tourist destinations is for economic benefits.”
Archer, B.H., & Fletcher, J.E. (1990)

Step off the plane in Cairo, and you’ll be welcomed by a relatively modern airport; however, this is where your concept of western tourism must end. Egypt’s economy was locked in stasis during Mubarak’s reign leaving infrastructure in a state of apocalyptic decay for over thirty-five years. Doors missing, windows gone, old signs hanging from fifty year old hardware which tends to spark and flicker, if they work at all. While tourism was big in Egypt prior to the revolution, and slowly it is returning, the infrastructure is almost non-existent, and what little there is, was so poorly funded under the previous regime, that the absolute potential for developing a new economy vibrant enough to provide jobs and develop a nation, is solely defined with the choices Egypt makes going forward. If new leaders choose to follow in the foot-steps of the former leader, then quite likely we can expect to see future political upheavals as the economy declines with its tourism deficit. A better alternative would be an injection of capital into public transportation and facilities to protect and enhance Egypt’s most important resource: ancient artifacts (and tourism to them). This would likely lead to a bustling new economy aligned as a middle-eastern destination for western holiday makers. The argument is simple: build it and they will come. So far Egypt refuses to do so.

A revolution may have recently occurred in Al-Tahrir Square, but tourism in Egypt has remained unchanged since 1982 (Eraqi 302). Prior to the civil unrest, Egypt’s primary source of visitors came from the European Union, the U.S., Canada, and Arabic communities. The Ministry of Tourism which oversees the Egyptian Tourism Authority continues to operate under a primary directive of expanding their target demographic to include Asia, Eastern Europe and Latin America (Eraqi 302). Each year about 50 million dollars are spent on traditional marketing to attract these segments, with an annual revenue exceeding 12.8 billion dollars (2008). Yet the Egyptian government invests only 9.34 million L.E. (livre égyptienne) in improving tourism infrastructure (roads, transport, security) (Eraqi 305). Using the Likert scale, opinions of tourists tend to suggest less satisfaction in these areas of Egyptian tourism compared to the next two or three destinations (Eraqi 307). (Tourist being defined as someone traveling to Egypt and it not being their usual residence [Lim]) Combined with the recent unrest in the middle-east, the result is that tourism in Egypt has declined 33% since 2008. The result is revenue is down to 8.8 billion, there is massive unemployment, and speculation of future inflation (Bossone). A change of direction in strategy would seem apparent, but despite this fact, tourism revenue remains diverted from re-investment, to alternative government appropriations. With a loss of U.S. tourism, marketing has shifted into maintaining their E.U. demographic, mostly German, rather than improving infrastructure. A choice which is self-defeating when you consider most Egyptians are bilingual in English and tourism. The current system, with its human capital remains dormant as of now,  but at least in the short-term, accessible, should government officials decide to take money they’ve been using for other projects, and apply it back into tourism infrastructure.

Indeed the two biggest problems Egypt faces are its image, and its infrastructure. This includes behavior (corruption, quality of service, etc.), transportation (public and airport), security and safety. Hustlers, beggars, and deceptive tourism officials find their way into the tourist areas of Egypt, and will only be mitigated by a government plan to involve itself in these social problems. For instance, arriving at the foot of a pyramid you will be met with an “official” tour guide who claims to be paid by the state, and wishes to give you an authentic tour. Once cornered in a dark corner of the burial chamber, a demand for a “tip” begins nicely, and may turn into a much uglier situation if the imaginative tour guide is not satisfied. Fail to pay your taxi driver an appropriate “tip” and you may find yourself stranded in the wrong part of town. Indeed Egypt’s current tourism climate is mostly about tipping. One should not arrive without a roll of 1 Egyptian Pounds as everything operates on the principle of pay-offs. Something which may seem foreign to some Europeans, and even for most Americans would be considered extortion. This of course could be easily fixed by making the monuments true national parks and restricting access only to paid tourists and true official government workers who are paid an honest salary, and are barred from taking tips. This subsidization of the parks could prove to be profitable by creating revenue from legitimate sales outlets rather than freelance street vendors who have been known to take a tourist on a camel out into the desert, and leave them stranded. This criminal activity even gained name, “(taking a) boat ride to Banana Island” (though there is actually an area by that name), because so many tourists are taken out on the middle of the Nile, then advised to pay more, or get out.  The western principle of exiting through the gift-shop would likely prove to be a much more efficient employment and revenue stream for these new national parks, than the ad-hoc methods currently employed. Government regulation of the tourism industry to curtail corruption is absolutely necessary to improve tourism in Egypt.

Transportation is another huge issue in Cairo. While Cairo sports a Metro system, it is small, and poorly adapted for tourism. The issues with transport start at the Cairo airport where tourists arrive to a deafening concert of taxi drivers to take you to the city. At about 50 E.L. per ride, it is not expensive, unless of course you choose the wrong taxi. No public metro line exists to the airport, or any of the monuments (Giza, Memphis, etc.). Indeed taxi service is about the only way of moving throughout the city as a non-native tourist. Distances are too great for walking and the weather and traffic prohibits bicycling or other forms of transport. This is a difficult proposition for women who travel alone, as often they are refused service without a man. This is part of the Arabic culture. To further matters, cab drivers can become easily offended at a woman’s dress, or the tipping behavior of westerners. Finding yourself stranded is not an unlikely phenomenon. Clearly a more robust public transport system with multilingual signage is an absolute must for Cairo to move forward.

 A safe, inexpensive method, for tourists to arrive safely at their destination with the comfort and leisure that most modern tourist destinations provide is an expensive, but necessary investment if Cairo is to rival most major tourist cities. Egypt need only look at cities like Krakow Poland for stop-gap measures in the intermediary period, which could be implemented immediately. Krakow’s Balice Airport is served by a single track, retro-fitted, ex-cold-war, above ground tram. The track resembles more of a Coney-Island roller coaster, but it’s functional. Due to the innovative use of the single rail system, the “tram” must move in both directions on the rails, and do so slowly to avoid de-rail; however, it’s consistent, with a set price, and safely moves passengers from the city center to the airport and vice-versa without difficulty. Upon arriving at the central train station in Krakow, in the middle of a large shopping mall, tourists are immediately able to begin consuming from the local economy. Indeed this single change would provide infrastructure, increase safety for tourism and business in the capital city, while reducing smog, dangerous vehicles, and enabling commerce beyond the isolation of the radius both tourists and residents are confined to without it. Of course Cairo knows this and has made plans to extend the Metro (via a monorail) to both the airport, and later the pyramids.  It would seem like they’re on the right track; however, Cairo has been making plans since its Metro’s conception in the 1930s, with no real set date of completion.

 Even if marked improvements are made, the disconnect between other monuments, national rail, and the smaller cities within Egypt are a quagmire of best intentions, but failed plans. Most improvements have been a result of foreign loans, in agreement with using foreign experts, planners and equipment. Beginning with a French investment in 1982 of 1107 million francs for the initial line, the development of the Metro system evolved around various other countries (Japan), and their best interests for a vision of Cairo (Cairo Metro).  The fallacy of these countries and their preliminary studies are that they were based upon serving the most densely populated areas, rather than tourist destinations. Investors gamed development for the best return on their investment, rather than the benefit of the State of Egypt. The result is a system which results in more resident fares sold daily, thus repaying the investment of the metro, rather than enabling the growth of tourism and creating revenue which would benefit the state.  Egypt would be wise to look at Disney’s concepts of people moving. Starting with the monorails of its Florida resorts, to the purpose built full size Metro serving its Hong-Kong park, the idea of getting vacationers where they want to be, quickly and easily, enables consumers to spend more money on attractions and souvenirs. This westernized approach might be seen as an obstacle for Egypt, but is an absolute necessity, to adapt, and do so before the economy becomes too unstable. This is the only path forward for a country which lacks natural resources, and may find it unable to resurrect itself as neighboring powers seek to prevent western-like influence, in what it considers a Sharia domain. In essence for Egypt to preserve itself, it must become the conduit between western culture and middle-eastern life. It must seek to use its national landmarks, not only as its national treasure, but as international ones as well. Egypt must do so immediately, in order to prevent becoming the center of the clash.

Beyond economic, the benefits of peace and prosperity cannot be understated. At the peak of Egyptian tourism about 14 million visitors arrived on its golden sands each year. (Egypt’s Tourism). In contrast, due to a successful marketing campaign (“Malaysia, truly Asia”) of the tourism poster child: Malaysia, it recorded a record 24.6 million tourists during the same time (Tourism in Malaysia). Clearly there’s a huge capacity for doubling or tripling Egyptian tourism revenues (now about 12% of the economy) while providing new jobs, and supporting business infrastructure. Social problems such as crime and civil unrest (like revolutions) would likely be mitigated as the demand for local expertise, highly educated workers, and consultants would be required not only during the transitional period, but also the continuous operations of facilities and attractions.

To exemplify this hypothesis I present the monument of Ramses at Memphis. It is a ten meter tall statue that Egypt tried to gift to Europe but was rejected. This ended up being a blessing for Egyptian tourism, as the outdoor museum is one of the most visited attractions outside of the pyramids. In order to operate the museum in a minimal sense, a visitor would need to employ use of a taxi to arrive, and then pay the ticket-master which is overseen by a military policeman to make sure the money is returned correctly. A total of three Egyptians are employed at one of the Middle-East’s hugest attractions (not accounting for grounds maintenance). Should Memphis decide to actually build a museum on site, apply climitization, and provide transportation to and from the site, not only would the relics be better preserved to the outside elements, but also would the demand to see the artifacts. Custodians for toilets, gift shop attendants, repair persons, transport workers, could all be employed in addition to the initial construction and labor force to erect the structure. The reasoning for such changes is not only an improvement for employment gains, but also economic ones as Egypt becomes competitive in global tourism against international standards which may influence the decisions of prospective visitors.

This competitive aspect is the core to Egypt’s waning tourism, and if not corrected will likely leave the industry catering not to wealthy jetsetters, but a small, often frugal, group of thrill seekers who accept less, but expect it to cost much less as well. We need only to look at pre-Olympic infrastructure of other countries to understand the effects of quality, accessibility, and making tourists feel welcome. During the Los Angeles and Atlanta Olympics, very little was changed, and the result was that tourism remained unaffected in the wake of the events. Contrary to this, from China to London, the lessons learned built sprawling modern facilities with connecting corridors of hospitality and transportation. The end result was 2.34 billion pounds of tourism revenue for the U.K. as a whole according to Oxford Economics (Griffith-Jones).

The Problem

“أنتِ تحبين مصر تماماً كما تحبين عرضاً طريفاً فى السيرك أو حيواناً نادراً فى حديقة الحيوان.لكن صدقينى.أن تولدى مصرية,فهذه مأساة!!”
― علاء الأسواني, نيران صديقة

"You like Egypt just as you like a funny circus presentation or a rare animal in the zoo."
-Alaa al-Aswani

While we have an answer to Egypt’s decline, we still have the problem of how to obtain such results. The dilemma can best described as the ongoing rift between an Old Cairo and New Cairo. Interestingly it is not easy to explain this concept without understanding that older Cairo was actually much more westernized fifty years ago than it is today: a destination of gleaming buildings and endless shopping for the wealthy elite of the west or those could afford it. Up till the 1952 revolution, a strong colonial effect, mostly from the U.K, but also the French, promoted both prosperity and poverty. While corruption abdicated the throne with the monarchy, so did an exodus of wealth from the country. Eventually infrastructure and affluence fell into disrepair and disuse, as government officials attempted to maintain the basic needs of a now Arab socialist state with a centrally planned economy (Egyptian Revolution). Eventually even these stop-gap measures gave way to a growing dissent for the secular government, which was now directly in conflict with the (at the time) illegal Muslim Brotherhood.  By 2010 the civil unrest of the Arab Spring brought the sixty years economic stagnation into the limelight. The people of Egypt had enough of waiting, and felt it was time to take back their country. Indeed the moment I jumped in the back of the Egyptian taxi from the airport, six weeks after the Revolution, my driver advised me “Welcome to the new Egypt”.

But the winning of 127 seats by the Muslim Brotherhood in the elections, as well as their ideology to see a United Arab States bound by an objective of placing Allah at the center of government, presents huge problems for the tourism industry. The New Red Scare, especially in the United States, and the United Kingdom, has become Islamophobia. Beyond political tensions, this “New Cairo” is a very conservative old-style of civility with a (simmering) state religion most Europeans and westerners, who through their common history of a similar kind rule, find the conduct outmoded, even barbaric, and certainly not likely somewhere you would want to holiday to.

Egypt must begin to monitor and adapt to social and political changes in its tourist demographic. The European Union, being the largest supranational body will tend to set the higher standard, for both its member states and the world. Should Egypt wish to thrive, adherence to its policies of cohesion are absolutely necessary moving forward. Social cohesion has become such a huge issue in Europe, so much so that, the European Union was forced to pass anti-hate speech legislation in 2008. The decision has led to several national level court cases such as a London Tube passenger making xenophobic remarks to another passenger and telling a citizen to “go back to their home” based on their skin color (despite the fact they were a U.K. citizen). In the U.S., anti-Islam sentiment has even feared 34% of conservative republican voters into uncomfortably believing the President is a Muslim (Condon).  These snap-shots of the Egypt’s tourism-base help to explain the decline in tourism since the revolution, as well as the problem going future, and it suggests that unless Egypt reverses their public image in the world arena to one of a more secular nation, that they’ll likely only experience a continuation of the downward trend in the tourism sector.

Beginning with the Luxor Massacre in 1997, and post 9/11 terrorist attacks in 2004, 2005, and 2006 throughout Egypt and in Cairo, and the correlation between a decrease in tourism, it is fair to say that  the foundations of social cohesion are ultimately the basis for success in bringing back fearful, deep pocketed westerners (Tourism in Egypt). It’s important to state that the misconception by westerners is to believe that because this is an Arabic country it is the genesis of the terrorism, which is quite the opposite from the truth, as Egypt is typically the victim:

“An honest observer of the evolution of conditions in Egypt would discover that terrorism is an alien phenomenon, strange to our values and heritage.”
- Hosni Mubarak

Even if Egyptians accept that success in tourism is defined by welcoming all visitors (women, gay, etc.), and manages to mitigate prejudices of their privately held beliefs for the greater prosperity of the nation, the second big dilemma is where does the funding come from? The global economy is in a downturn, though the IMF and the U.S. continues to pump billions into the country, private investments are unlikely to return to Egypt until the aforementioned issues are dealt with (Coghill).

Indeed even if Egypt manages to balance its religious values with its hunger for peace and prosperity, it is likely they’ll still have to accept a return to western control via neo-colonialism. It may be a quite difficult sacrifice to make, but allowing foreign investors autonomy and control over the landmarks in exchange for a term of development is the only bargain likely to draw enough interest and capital to facilitate the necessary changes. Though I realize for an Egyptian this evokes the former sale of the Suez Canal to the U.K., the irony once swallowed and not liked, may be the one thing that  prevents the bitter taste of war and unrest for the Egyptian people. It’s literally a trade of pride for prosperity (and perhaps survival) for Egypt. Not to forget that there is considerable debate among Muslims over the Egyptian iconography, and how some wish for those tourist icons to be destroyed as not to distract from Islam. Ironically one of the first iconoclasms occurred in Egypt in 1334 B.C. when Akhenaten died after attempting to redefine polytheism into monotheism. History it would seem,  is far too often ignored in Egypt, as is learning from their mistakes (Akhenaten).

“If you want to move people, you look for a point of sensitivity, and in Egypt nothing moves people as much as religion.”
-Naguib Mahfouz

The only answer for Egypt is to continue to be the conduit that connects the east and the west. Just as it has politically in the past, the answer for Egypt is finding the center between its religious values, and western business. By compromise, and choosing a central position, the country can become the center of east-west relations, education, and a bridge of the cultural divide.

“The international tourism industry is a product of metropolitan capitalist enterprise.”
-Stephen G. Britton (Britton)

One only need to heed the tales of swamp land in Florida becoming million dollar real-estate due to the tourism boom around Disney, or tiny Hog Island which once renamed Atlantis by Resort Investments, turned a $300 million dollar profit the first year (Paradise Island). Today’s baby-boomer generation exemplifies their expectations of travel with their adoration of cruise boats that provide access to adventure with constant access to their western amenities. While some see this as travel with training wheels, one cannot contest the profitability in catering to tourist needs, even if they’re a direct result of their fear of immersive travel. While I actually enjoy learning Arabic, and ordering Kushari from a native street vendor, the vast majority of wealthy travelers don’t wish to submit themselves to the culture conflict. The result is the thirty billion dollar cruise industry which provides more than simply just transportation to distant holiday locations, but caters to all the supporting needs of the passengers. I’m reminded by author Helen  Haniff in her 1970 book called 84 Charing Cross Road, where she recounts the actions of most Americans who arrive in London, and lock themselves into their rooms with a bottle of bourbon. Both her and I, find such travel behavior peculiar, but none-the-less, it is important to understand that if this culture shock persists with so many who travel to English speaking London, what phobias must persist for the majority of westerners arriving into the Middle-East? More importantly, as a tourist destination, it is important to ask: “how much money can we make from this fear?” The answer is a lot.

 The lesson for Egypt is, despite the huge investment of the infrastructure (in this case about 1 billion per boat in the case of the cruising industry.), the payoff can be huge. Indeed, expanding on previous examples, Euro Disney was in a very similar situation to Egypt as far as tourism is concerned. Even anti-American sentiment among the French contributed to nearly bankrupting Disney in 1993, and parallels the distrust for western influence in the Arab world (Shenot). Yet evolving the Disney experience into something distinctly French turned the disaster into profit. Indeed a uniquely middle-eastern Egypt brand of western amenities could prove to be the answer for an Egypt without a complete capitulation to western ideals. This careful approach to designed growth must carefully be implemented for benefit rather than the negative aspects of the tourism industries such as prostitution and crime, which is generally both objectionable to the tourist, and those who oppose tourism due to moral or ethical beliefs.

“Denial ain't just a river in Egypt. “
-Mark Twain

The other aforementioned example: Malaysia, pumped 86% of its budget into tourism infrastructure and marketing, vastly improving its roads, airports, and ferries from a dust covered remote port to first class accommodations for travelers (Jusoh).  Malaysia shares a similar history to Egypt as a former colony of Britain, but has become the benchmark for successful tourism. Short term goals include tripling tourism revenue, and 2.7 million new jobs by 2015 (Tamimi). In contrast, especially considering the weather of Egypt:  hot (a record of 48 centigrade), one might be surprised and shocked to find most buildings do not have air-conditioning. While the Metro and certain classes of the rail network have climatization, third and fourth classes do not, nor do the main corridors of the main museum: the Egyptian Antiquities Museum (Jones).

The Economics
Since tourism, unlike goods in a traditional export economy, consists primarily of the consumption of non-traded goods, the price and value of those goods are directly related to the demand within the local market. Thus as the economy grows we can expect the values of goods and services to increase, thus growing the economy proportionately to the demand without having to balance the position of the Egypt economy against competitive countries (Balaguer, Cantavella-Jorda 3).

If the main goal of Egyptian tourism is to improve the lives of the people of Egypt, then this stagnated model of tourism with unstructured ad-hoc planning and its current model of marketing, does little to improve the lives of citizens (Heredge). While past performance of the tourism industry may have made money for the government, few jobs were created, and much of the revenue earned was funneled directly into repaying past loans to the infrastructure previously mentioned in this paper, and designed around foreign interests rather than public good.

Indeed it is important to identify the rift between the direct tourism flow of income and jobs, and the indirect tourism industry which has never truly been built up around the direct tourism. While there exists a small hotel industry and  several airports connecting the Egypt to the world, its hubris appears to be the lack of jobs and income created by supporting infrastructure, including construction, transportation, and western amenities. Despite the past highly profitable tourism numbers, few Egyptians are employed by the industry, and the competition for a tourism job is highly competitive. This lack of inward investment prevents the quality of life from improving, thus the third layer of economic gain, induction: where Egyptian employees spend within their own community fails to take place. This stage is often the catalyst for encouraging future growth outside of the tourism sector, but until more Egyptians are put to work under the tourism sector, the benefits cannot be realized (Bobrica 35).

The Tourism-Led Growth Theory suggests that there is a direct connection between job growth and increase in G.D.P. as a result of tourism (Balager 2). It goes as far to suggest the “goal post” that countries should aim for, to measure their success, is somewhere around 21% of G.D.P. by tourism receipts. Clearly Egypt has a long way to go even if current trends prove to be short term (Adamos 13).

In essence current and previous growth of Egypt’s tourism has been based on the Money Generation Model; taking in account simplistic averages of visitor spending and converting that into income and jobs, and tax benefits against local tax rates. Theoretical increases in numbers of visitors, thus improve overall tourism revenue (Stynes 10). Except this simplistic approach fails to recognize that in the case of Egypt, the model is dependent on the number of service or product outlets available to tourists to purchase from. Remember, there is no gift shop at the Great Pyramid, there is no Metro station, and there are no vending machines. Those businesses that do support the travel industry have no fixed prices, often operate without accurate accounting for tax purposes, and as mentioned beforehand, may choose to discriminate against some whom they serve based on religious, or cultural reasons.

In essence the basic model for determining economic gain through tourism can be defined as:
Economic Impact = Number of Tourists * Average Spending * Multiplier (Stynes)

This equation however tends to, because of its simplicity, suggest economic impact is a direct result of tourists, and that spending is a fixed rate. This of course results in countries like Egypt concentrating mostly on improving traffic rather than improving average spending, which can be done by not only improving quality of the attractions, but providing more opportunities, or outlets for spending to occur. This infrastructure based model would be better represented by a formula similar to this:

Economic Impact = Tourists * (Average Spending per Opportunity * Opportunities for Spending) * Multiplier
For instance, plugging 2000-2008 numbers into the equation yields (without multiplier):
11.6 billion [impact]  = 12.8 million [tourists] * (X)
X (as ASPO*OFS) = $906.25

This $906.25 represents the average amount of spent by each visitor to Egypt. The number of outlets visited is the unknown factor.

Opportunity Revenue = $906.25 / OFS  (OFS as number of outlets visited)

For the purposes of demonstration we will assume the following outlets were used by the tourist: hotel, taxi, restaurant, museum, gift shop, and ten other outlets for OFS (in this case OFS=15), we arrive at:

Opportunity Revenue = $906.25 / OFS  = $60.41 (per each visit.)

Now let’s assume due to infrastructure providing accessibility, a visitor adds five additional opportunities (OFS=20)
O.R. = $60.41 * 20 = $1208

Plugging this into our original formula, if Egypt were to promote just five more points of sale to visitors, they’d increase the economic impact of tourism from 11.6 billion to:  15.4 billion. Clearly, while the overall equation is the same, the emphasis is changed from one which requires a greater input, to that which improves the efficiency of absorption of revenue from that same input. As this scales up, the outcome is a prosperous state of success for Egypt, and a self-sustaining model of economic growth that befits both the tourist and the citizens of Egypt.

“I firmly believe that the next great breakthrough in bioscience could come from a 15-year-old who downloads the human genome in Egypt. “
-Thomas Friedman

Build it and they will come.
Like those who have built greatness in the past, like the Pharaohs who did not hesitate, the new Egyptian government must not hesitate; it must proceed immediately to serve its own interest by embarking on infrastructure improvements to tourist attractions, transportation, and the quality of its cities. Improving factors like walkability, building codes, and encouraging small business growth in vacant or abandoned outlets in exchange for improvement. Primary concerns should surround main landmarks initially, removing corruption, and encouraging legitimate enterprise with the support of the Egyptian government.

The secondary goal should be to attract the foreign investment in these sectors to facilitate an expansion of these initial goals, and to bring in outside tourism knowledge. This may be done through long-term contracts offering economic benefits without taxation, or a partial stakeholdership in partnership with the Egyptian people.

The third and last goal should be the future of Egypt. It’s not enough to just save Egypt from destruction, not enough to reduce unemployment and bring peace. Egypt has the opportunity to fulfill a destiny, a legacy set in place during the first civilizations of mankind. Cairo was, and is, the city of the Gods, and finding that unique balance of marketing the mythology alongside the current belief systems of the people should be their goal. The capacity of change has always lurked within the shadows of the great monuments of the country, and those same monuments stand as proof to what happens when a vision of the future is manifested by the collective will of the people for the betterment of all. In fact, the pyramids themselves can be seen as the original infrastructure of Egypt, and proof that if you build it- they will come.

Egypt is not a country we live in but a country that lives within us.
-Pope Shenouda III 

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