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### Viewing cable 10CAIRO262, Tourism is the "driving force" in the Egyptian Economy

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
10CAIRO262 | 2010-02-08 13:01 | 2011-02-16 21:09 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Cairo

`

    VZCZCXYZ0000
    RR RUEHWEB

    DE RUEHEG #0262/01 0391358
    ZNR UUUUU ZZH
    R 081357Z FEB 10
    FM AMEMBASSY CAIRO
    TO RUEHC/SECSTATE WASHDC 0161
    INFO RUEHEG/AMEMBASSY CAIRO

` `

    UNCLAS CAIRO 000262

    SENSITIVE
    SIPDIS
    DEPT FOR NEA/ELA

    E.O. 12958: N/A
    TAGS: ECON EAID PREL EG
    SUBJECT: Tourism is the "driving force" in the Egyptian Economy

    REF: 09 CAIRO 2247

    ¶1. (SBU) Key Points:

    --The Ministry of Tourism (MoT) projects a 5-7% increase in tourism
    revenues and arrivals for 2010 over last year.

    --New growth opportunities are expected in Egypt's Mediterranean
    north shore area and MoT is overseeing plans to increase hotel
    capacity for the region.

    -- MoT plans to pilot a zero emissions resort town in a bid to lure
    foreign tourists interested in environmental issues.

    --Over the last two years, MoT has initiated comprehensive employee
    training programs in order to build a managerial workforce for the
    tourism industry.

    ¶2. (U) On January 27, Econoff met with Senior Assistant Minister
    for Tourism Hisham Zaazou, a former tourism executive who serves as
    a key advisor to Minister Mohamed Zoheir Garana. He also oversees
    new initiatives such as "green tourism" and improved training
    programs.

    ¶3. (U) After a slight decline in 2009 attributed primarily to the
    global financial crisis, both tourism revenues and arrivals - two
    key industry benchmarks - are expected to increase on the order of
    5-7%- for 2010 (Ref A). According to the Ministry of Tourism (MoT),
    Egypt remains on track to reach its long-stated target of 14
    million tourist visits annually by 2011 - a number set out in
    President Mubarak's 2005 presidential campaign platform.  Egypt's
    "national tourism plan" targets an annual level of more than 25
    million tourists by 2020.

    --------------------

    Growth Areas

    --------------------

    ¶4. (SBU) Egypt's Red Sea coastal region should remain the country's
    most popular destination for foreign tourists but Zaazou advised
    that the MoT is looking to the country's Mediterranean north coast
    as a key location for new growth opportunities.  The area
    stretching westward from the city of El Alamein (150 miles
    northwest of Cairo) to the summer resort town of Marsa Matrouh,
    comprises approximately 300 miles of coastline. MoT is working with
    real estate developers to triple the number of available hotel
    rooms in the area, from 7,000 to more than 22,000 in the next 5-10
    years.  The focus, Zaazou stated, will be on luring European
    tourists - who make up more than 70% of Egypt's foreign tourist
    market.  The government is currently upgrading four airports in the
    north shore area (Alexandria, Marsa Matrouh, El-Alamein, and Borg
    El Arab) with an eye towards eventually allowing low-cost European
    airlines to service the area and bypass Cairo.

    ¶5. (SBU) This potential new growth is crucial to MoT's plan to
    generate new jobs in the tourism sector.  Zaazou noted that for
    every 1 million new tourism visitors, Egypt generates 200,000 new
    jobs - listing hotels and tourism companies as the most obvious
    recipients but also pointing out the rise in demand for skilled
    tradesmen such as electricians, plumbers, and carpenters.  He
    explained that government economic plans call for the creation of
    600,000 new jobs annually.  If growth continues as expected,
    tourism could provide one-third of new employment.  "The tourism
    industry should be the main driving force for the economy," Zaazou
    said.

    ---------------------------------------------

    Piloting Zero Emission Tourism

    ---------------------------------------------

    ¶6. (SBU) MoT plans to introduce what it labels "zero emission
    tourism" in highly visited tourist destinations, starting with the
    Sinai city of Sharm el-Sheikh.  Zaazou asserted that MoT will seek
    to lower carbon emission by 90% in Sharm el-Sheikh by 2020 by
    improving water conservation and sanitary systems, increasing
    dependency on renewable energy sources, and upgrading the city's
    public transportation system.  By 2030, MoT predicts that Sharm
    el-Sheikh will become a zero emissions resort area.  Zaazou
    explained Egypt is seeking an advantage over its Mediterranean
    neighbors (notably Turkey) and a future emphasis towards "green

    environment tourism" may provide that edge.  If MoT is successful
    with the Sharm el-Sheikh project, Zaazou indicated that Egypt will
    expand the program to other areas along the Red Sea coastal area
    but did not identify any specific locations.

    -----------------------------------------

    Employee Training is Pivotal

    -----------------------------------------

    ¶7. (SBU) In the last two years, MoT has begun comprehensive
    training for current tourism employees as well as youth seeking
    employment in the industry.  Led by the Ministry-controlled Higher
    Council for Tourism, the program has initially targeted popular
    resort areas along the Red Sea Coastal area and will train rank and
    file employees as well as middle and senior managers - primarily
    for private Egyptian hotels.  MoT is not working with foreign
    hotels since they maintain their own training programs. Zaazou said
    the goal is to build an Egyptian managerial class that currently
    lacks sufficient numbers.  Zaazou also couched the need for
    training as a "social impact force." Egypt has problems with people
    holding "radical Islamist views," he confided.  Employee training
    problems present the opportunity to moderate these views, noting
    that "exposure to new ideas and education" will allow for improved
    social interactions between Egyptians and foreigners. (Note:
    According to press accounts, Minister Garana reaffirmed this
    training commitment at a World Tourism Organization meeting in
    Spain on February 1, 2010 where he pledged to upgrade national
    employee training programs. End Note)

    ¶8. (SBU) Comment: MoT's projections for tourism arrivals, revenues,
    and job creation appear overly optimistic given the difficulties
    faced by the global tourism market.  The intense pace of
    infrastructure development - especially in the country's north
    shore - is a major concern if tourism visits do not increase
    according to MoT's stated 2020 goal.  However, the key element in
    Zaazou's overview of MoT's plans is a newfound commitment to
    training, a surprising yet welcome development. Contacts in nearly
    all of the government's ministries repeatedly discuss Egypt's
    desperate need for a skilled managerial class.  If MoT is to meet
    its ambitious targets, it is critical that it develops a
    well-trained tourism workforce to convince the foreign tourist
    market to regularly return to Egypt.
    SCOBEY

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