Despite Shark Attacks, Egypt Tourism Will Grow: Minister

Egypt is on track to meet its tourism growth targets despite a scare following a rare series of shark attacks that affected bookings, the country’s Minister of Tourism, Zoheir Garranah, told CNBC.

Sharm el-Sheikh
Sharm el-Sheikh

Half of the beaches at the popular Red Sea resort of Sharm El-Sheikh are now open again after shark attacks that killed one and injured four had alarmed even the scientific community.

"We're seeing there's a slowdown in bookings, but not a frightening figure. It has to be dealt with," Garranah said in an exclusive interview.

Although the Red Sea has always been home to sharks, Sharm El-Sheikh, widely held to be one of the world's most pristine diving sites, has seen few accidents in previous decades.

With more than 11 percent of Egypt's gross domestic product stemming from tourism, the government quickly flew in top scientists to find an answer as to why the behavior of sharks would change so abruptly.

"It's not normal. There is something that happened", Garranah said.

There is a growing consensus that a collusion of factors explains the recent spate of attacks. Among them is that a cargo ship is said to have illegally dumped animal carcasses into the sea near the beach, offering sharks easy access to food. Add to that the ecologically-disruptive fish and shark feeding, as well as unusually high temperatures in the area and the risks of a possible attack simply surge.

Aside from safe swimming areas in natural lagoons and protectorates, experts have now advised implementing general safeguards such as patrol boats, specially-trained lifeguards, stricter enforcement of feeding bans and standard operating procedures.

Non-Beach Tourism

Despite the recent shock, the government is "definitely on track" to reach its tourism growth targets for 2011, Garranah said. The number of tourists, year-to-date in November, came in 17.5 percent higher than in the same period in 2009.

Garranah expects to close out the year with a tally of 14.7 million -14.8 million tourists, and $12.6 billion to $12.7 billion in revenues.

With some 212,000 rooms under construction, Garranah sees significant growth potential in non-beach tourism, such as wellness, second-home and shopping tourism. By 2020, the government hopes to reach 25 million tourists per year; but it needs to spend some money to achieve it.

"We need to invest more in people", Garranah cited as the main challenge. Continued investments in expanding airports, accounting for 82 percent of arrivals, and highways, offering key accessibility to resorts across the country, are also part of the equation.

The UK is the second-largest source of tourists for Egypt and Garranah was highly critical of the departure tax brackets, also known as the Air Passenger Duty (APD), which taxes air travel according to the distance between the UK and the country of destination.

High Costs

At a time when travelers are more price-conscious, Garranah was concerned that Egypt was not in the same tax category as countries like Turkey, Tunisia and Cyprus.

"I'm not against the departure tax. It's nobody's business to contest countries as to how to implement tax, but I'm with unifying the tax," he said.

There has been considerable debate throughout the year among policy makers, industry executives and vacationers alike about the APD. Many countries are complaining their tourism industry will be hard hit as families may have to pay hundreds of pounds more for holidays.

Germany has followed suit with introducing ADP and other European countries are contemplating similar measures.

"They say it was for environmental reasons, everybody knows it's for the general budget deficit," Garranah said.

The International Air Transport Association (IATA), representing some 230 airlines, also said departure taxes dampen demand and add costs for businesses.