Calm May Have Returned to Egypt, but Not American Tourists


Egypt's pyramids and antiquities museums have reopened after weeks of violent protests in Cairo. A trickle of intrepid European tourists is even flowing into beach resorts like Sharm el-Sheik and Taba. But so far, most Americans are giving Egypt a miss.

"Business is down sharply," says Ahmed Elemam, CEO of Tour Egypt, a Lubbock, Texas-based tour operator that arranges group visits for Americans. "We had to cancel hundreds of thousands of dollars worth of travel."

Stability Equals Nile Cruises

Abercrombie & Kent, a luxury tour company based in Downers Grove, Ill., says it canceled all its Egyptian tours through the end of March. But Pamela Lassers, a spokeswoman for the firm, says its luxurious Nile cruises will resume as of April 1.

"We're very hopeful the situation will resolve itself," she says.

Amr Badr, managing director for Abercrombie in Egypt and the Middle East, reports the situation is stabilizing in Egypt, now that President Hosni Mubarak has stepped down.

"There have been some tangible moves back to normal such as the reopening of the Egyptian Museum," Badr says. "All major tourist sites throughout Egypt are now open and functioning normally." He says his firm has already sent visitors to Cairo locations, and the feedback was very favorable.

Warnings, Uncertainty Hurt Local Economy

Egypt earns upwards of $13 billion a year from its tourism industry -- an integral part of the nation's struggling economy.

But Masood Ahmed, director of the International Monetary Fund's Middle East and Central Asia Department, told a press conference last week the decline in tourism was likely to seriously hurt Egypt.

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"The recent popular protests in Egypt will definitely have a short-term economic cost," Ahmed said. "We will see tourism and investment going down, and certainly the 5.5% growth rate that we saw in the last two quarters of 2010 will likely be considerably lower in the next six months."

And that decline in tourism isn't likely to change anytime soon. The U.S. State Department is still warning Americans to stay away from Egypt for "non-essential travel."

"Due to continuing uncertainties regarding the restructuring of Egyptian government institutions, the security situation remains unresolved," the department said in a travel warning posted on its website. "Until the redeployment of Egyptian civilian police is fully restored, police response to emergency requests for assistance or reports of crime may be delayed."

The U.S. government has also ordered the departure of all nonemergency personnel from Egypt. Cairo is one of the largest duty stations in the world, with thousands of U.S. employees administering economic and military aid.

But British Prime Minister David Cameron visited Egypt this week -- and his government is allowing British tourists to return to Sharm el-Sheik and the Red Sea resorts. So has Germany's government.

Other Regional Business Is Stable

Pamela Lassers says there has been no fall off in visits booked by Abercrombie & Kent to other Middle Eastern countries because those tours are usually booked months in advance. For those who canceled vacations in Egypt, she says, the "overwhelming majority" rescheduled for the autumn or took other tours to Morocco or Tanzania.

June Farrell, a spokeswoman for Marriott International (MAR) -- which manages 29 hotels in the region -- says while its Egyptian business was severely affected by the recent violence, most other parts of the Mideast have seen no disruption. That includes the company's two hotels in Bahrain, which haven't been affected by the violence there.

"Travel to the Middle East by long-haul travelers is down, but not local business," Farrell says. "Obviously, those areas that have experienced political unrest certainly have been negatively impacted. Travel to Cairo and the Red Sea has not gone back yet -- that's going to take a while."

Bad Timing in Libya

But Farrell says Marriott's business in places Like Qatar, Dubai and Saudi Arabia has remained "pretty much normal." Most of that business is intraregional, with visitors from Dubai visiting Saudi Arabia and vice versa. "It's too early to say what the impact of the violence is going to be long term," she says. "It depends on how all this plays out."

Marriott had the misfortune last week to open a five-star JW Marriott branded-hotel in Tripoli, Libya, complete with oceanfront rooms and a ballroom. That business came to a quick end with the violent uprising against Libya's leader, Moammar Gadhafi.

"There were guests, but I think most of them have departed," Farrell says. "We're not accepting any new reservations at the moment." It may be a while before that happens.

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