By the Blouin News World staff

Egypt’s tourism woes mount

by in Middle East.

Foreign tourists in the Egyptian Red Sea resort of Sharm el-Sheikh, on January 3, 2012 (AFP/Getty Images, Mohammed Abed)

Foreign tourists in the Egyptian Red Sea resort of Sharm el-Sheikh, on January 3, 2012 (AFP/Getty Images, Mohammed Abed)

Egypt’s tourism industry has a gloomy forecast ahead of it a week after a terror attack targeted tourists on the Sinai peninsula, with warnings piling on from international tourism agencies¬†and several Western governments. Ansar Beit al-Maqdes, the al-Qaeda inspired group behind recent high-profile offensives against Egypt’s state security apparatus, has taken credit for the bombing of a bus carrying Korean sightseers on Sunday. The attack undermines assurances from Cairo that foreigners have little to fear in the embattled country. It is also sure to deal another major blow to an industry that has been battered as a result of political turmoil over the past three years.

Though there was a small glimmer of hope for the industry back in September when many European embassies began relaxing travel warnings to Egypt, Sunday’s attack, which killed two Koreans and an Egyptian, is already having a noticeable effect. In the days following the bombing, European travel agencies have been canceling trips en masse to the country while bookings at Egypt’s Red Sea resorts have dropped sharply. Britain, one of Egypt’s biggest sources of tourists, issued a warning through its embassy on Wednesday advising against all but essential travel to most of Sinai.

This is serious cause for concern as it hits Egypt’s tourism sector at its heart: Sinai’s Red Sea resorts have long been seen as a safe haven away from the tumult sweeping the country. Unlike Cairo, Alexandria, and Luxor, resorts like Sharm el-Sheikh have, for the most part, been shielded from the blows other tourist sites in the country have suffered since the overthrow of Hosni Mubarak in 2011.

VISUAL CONTEXT: Egypt’s tourism

Capital Economics via IBTimes

Capital Economics via IBTimes

 

As much as Egyptian officials have attempted to downplay Ansar Beit al-Maqdis’ warning that all tourists must leave the country or be killed, the chilling directive is clearly being taken as a credible threat. And this is exactly the sort of PR the tourism industry– and the government– does not need at the moment. More than $1 billion has already been lost in tourism revenue since Mohammed Morsi was deposed in July. And, with tourism accounting for 11 percent of Egypt’s GDP, any hit the industry takes has significant ripple effects on the country’s economy.

And this is only the tip of the iceberg when it comes to the economic realities Egypt’s military-backed government will have to face. Egypt’s massive energy crisis may do what a deteriorating security situation has not: threaten army chief and de facto leader Abdel Fattah al-Sisi’s reputation. The unsustainability of Egypt’s energy subsidies is something Sisi’s predecessor grappled with — disastrously. While it may take a lot to sink the now-idolized leader, the historically sensitive economic issue combined with continuing drops in revenue in crucial sectors like tourism and a deteriorating security situation are, at the very least, a recipe for more turmoil.