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European tourism set to rocket at Red Sea resorts this summer

Forecast international seat capacities from Europe to Egypt in the six months from June to November are set to ramp up significantly – offering new hope for beleaguered tourism and duty free businesses in resort areas in particular.

According to travel retail analyst, research and category expert, Counter Intelligence Retail, scheduled international seat capacities from June to November (versus the same period in 2016) will rise by +7.9% on average – but in some locations the growth will be over +200%.

While traffic from Middle Eastern markets such as Saudi Arabia, UAE and Kuwait will continue to drive the biggest volumes, European tourists are expected to flock back to Red Sea resorts, with airports such as Hurghada (HRG), Sharm el-Sheikh (SSH), and Marsa Alam (RMF) seeing big gains and contributing to a +39% growth in capacity from the region (see table below).

Based on the Route Dashboard of CiR’s modelling tool, Business Lounge, in the six-month period from June seats to HRG are forecast be up by +80.9%, to SSH by +70.7%, and to RMF by a huge +206% (see table below).

“After a period of declining traffic due to a combination of political unrest and terrorist activities, European numbers look like they will pick up strongly this summer which will help the tourism and duty free markets in their recovery,” says Garry Stasiulevicuis, President of Counter Intelligence Retail. “Over 500,000 additional seats are set to be available from key European markets in the six months from June.”

He adds: “Among Egypt’s top 10 European markets, only Italy is not likely to record double-digit growth in seat capacity. The biggest European market, Germany, is expected to show +81% growth, while the UK should be up by +26%, closing in on the number two market of Turkey.”

Among European markets, the best year-on-year growth is expected from the Czech Republic where seat capacity will more than triple this summer – a rise of +240%. It will overtake markets like Greece, Switzerland and Austria. 

Resort airports make the biggest gains

The resumption of flights to resorts like Sharm el-Sheikh and Hurghada has been key to the increase in international capacity. However these increases still have some way to go before returning to 2015 levels; capacities are currently lower by -69% and -16% respectively for the two airports for example.

From a countrywide airports perspective, the summer gains are strongest in Egypt’s resorts. By contrast, the biggest cities of Cairo and Alexandria are showing flat or marginal declines in seat capacities.   

While the overall traffic news is good for the coming summer months, there is still some way to go before Egypt’s tourism economy gets to its former level. According to the World Travel and Tourism Council, Egypt’s forecast travel and tourism direct contribution to GDP for 2017 will rise slightly to about 3.3% of GDP (versus about 3.2% in 2016).

However, this is well below the 9% share travel and tourism had in 2007 – and even in its 10-year outlook the WTTC believes that this sector will contribute only about 3.9% by 2017. 

Note: Following geopolitical disputes between Russia and Egypt dating back to 2015, there is currently no scheduled traffic from Russia. Russian inspectors are monitoring upgrades to Egyptian airport security and once approved, flights could recommence – though no timeline has been announced.