Assessment 1 – group assignment country egypt EXAMINE THE CHANGES FOR 5 MAIN SECTORS IN TOURISM

The National Museum of Egyptian Civilization After suffering the 2020 tourist arrivals decline, thousands of Egyptian and foreign visitors visited the National Museum of Egyptian Civiliz

Assessment 1 – Group Assignment

Country: Egypt

Course Name Economics for Tourism and Hospitality

Student Name/

Student ID

Nguyen Ngoc Diep – s3836416 Truong Buu Doanh – s3818121Christina Leong Ru Suen – s3878345Huynh Duong Phi – s3817778Nguyen Lan Phuong – s3726725

“I declare that in submitting all work for this assessment I have read, understood and agreed to the content and

expectations of the Assessment Declaration”.

Table of Contents

A EXAMINE THE CHANGES FOR 5 MAIN SECTORS IN TOURISM 3

I A TTRACTIONS 3

1 NATURAL ATTRACTIONS 3

2 PRIMARY MAN MADE STRUCTURES- 3

3 PURPOSE BUILT ATTRACTIONS 4

II A CCOMMODATIONS 4

III T RANSPORTATION 5

IV T RAVEL ORGANIZER INTERMEDIATE / 5

V D ESTINATION ORGANIZATION SECTOR 5

B DEMAND DETERMINANTS 6

D ETERMINANT 1: P EOPLE NCOME I 6

ATTRACTION 7

ACCOMMODATION 7

D ETERMINANT 2: P EOPLE PREFERENCES 8

TRANSPORTATION 8

TRAVEL ORGANIZATION 9

DESTINATION ORGANIZATION 9

C SUPPLY DETERMINANTS 9

ATTRACTION 10

ACCOMMODATIONS 10

TRANSPORTATION 10

D DIAGRAM 11

I A TTRACTIONS 11

1 NATURAL ATTRACTIONS 11

2 PRIMARY MAN MADE STRUCTURES- 12

3 PURPOSE BUILT ATTRACTIONS 13

II A CCOMMODATION 14

III T RANSPORTATION 15

IV T RAVEL ORGANIZER 16

V D ESTINATION ORGANIZER 17

E C ALCULATIONS 18

A USING INFORMATION FOR NATIONAL CARRIER FLAG CALCULATE, PRICE ELASTICITY OF DEMAND OF A IR TRAVEL IN EGYPT 18

B INCOME ELASTICITY OF DEMAND OF OUTBOUND TRAVEL IN EGYPT 19

REFERENCES 20

A Examine the changes for 5 main sectors in tourism

Al Nayzak Beach

In comparison to 2019, international tourist arrivals (overnight tourists) fell by 72 percent in January-October 2020 (UNWTO 2020) Accordingly, the number of tourists visiting the beach has also heavily decreased

2 Primary man-made structures

3 Purpose built attractions

Luxor museum

During the covid-19 outbreak period, tourist activities continued as normal in Luxor in 2020, thousands of visitors flocked to its various archaeological sites such as Luxor and Karnak Temples, the Valley of the Kings and Queens on the West Bank of Luxor as well as its museums(Egypt Today 2020) This circumstance is different from other tourism places at the same time

The National Museum of Egyptian Civilization

After suffering the 2020 tourist arrivals decline, thousands of Egyptian and foreign visitors visited the National Museum of Egyptian Civilization in Fustat on April 9, 10 in 2021, to see the Central Exhibition Hall, which was unveiled during the welcome of the Pharaohs' Golden Parade

on April 3 (Egypt Today 2021) According to Ahmed Ghoneim, CEO of the Museum Authority, thenumber of museum entry tickets sold on April 9 and 10 totaled 10,000 tickets, with a total of 25,000 visitors (ibid.)

II Accommodations

It reports that there were 138,997.000 hotel rooms in Egypt in 2018 (Ceicdata 2018) Egypt's overall number of overnight stays reached 42.97 million in 2020 (Saifaddin 2021) This was a significant decrease from the previous year, when there were 136.28 million overnight stays (ibid.) This decrease can be ascribed to a decrease in visitor numbers as a result of travel restrictions imposed to combat the coronavirus (COVID-19) epidemic (ibid.) With about 21.9 million nights spent, European tourists had the biggest number of overnight stays (ibid.)

III Transportation

In 2020, 336 thousand visitors came to Egypt via land, up from 1.5 million in 2019 The number

of tourists arriving by land peaked in 2019, and hit its lowest in 2020 (Saifaddin 2021) The

second transport market is airplanes, with around 3.3 million tourists arrived in Egypt by airplane(Saifaddin 2021)

IV Travel organizer/intermediate

To have a gradual recovery from covid epidemic, Tourism and Antiquities Minister Khaled Enani told AFP they would prioritize workers in the tourism industry, which is essential to the Egyptian economy (Rédaction 2021) In addition, travel organizers in Egypt tourism opens moreopportunities for tourists to encourage them to travel as well as regaining their main contribution

al-to the economy For example, Central Holidays is an international travel brand offering three special specials on three of its most popular Egypt packages, with savings of up to $150 per person for travel through the end of 2021 (MOONACHIE 2021)

V Destination organization sector

The contribution of Egypt's travel and tourism sector to the country's GDP plummeted from $32 billion (8.8%) in 2019 to $14.4 billion (3.8%) in 2020, just 12 months later According to the chairman of Egypt's Tourism Promotion Authority (TPA), the Egyptian tourism sector has recovered by 40% in 2021 as a result of COVID-19 prevention, and is expected to recover further than other countries when removing lockdowns and travel bans (Mahmoud 2021) The TPA sponsors international art and cultural events in Egypt as one of its tourism marketing tactics during the COVID-19 crisis, in addition to initiating marketing efforts around the world (Mahmoud 2021)

B Demand determinants

The factors that lead to fluctuations in the demand for a specific product or service can be defined as the determinants of demand and some of the determinants of demand are

population, income, change in preferences and price expectations (Prateek 2021) These changes will affect the demand curve which results in the change of price and quantity

demanded (Prateek 2021)

Determinant 1: People Income

Figure 1 Average Household Income 2005 - 2018

Despite developing a healthy economic growth in 2020, there are still an adequate amount of people living in poverty in Egypt (AFP 2020) During the range of 2005 to 2018 which is before the pandemic COVID-19, the average household income of Egypt citizens increase rapidly by around 15 million EGP compared to the previous years (CEIC n.d., figure 1) According to data from the World Bank around April to June 2020 after the pandemic has started, roughly 2.7 million jobs were lost mainly in the tourism and transport sectors and therefore results in an increase of 9.6% in unemployment (AFP 2020)

Attraction

Since the government of Egypt has been trying to maintain healthy economic growth, the total revenue of tourism in 2018 had reached 174.1 billion EGP and the tourism sector is considered

one of the largest employers in Egypt (OECD 2020) Specifically, in 2018 before COVID-19, it

was recorded around 9.8 million international tourists arrived in Egypt (OECD 2020) However,

the number of tourists started to decrease after the pandemic started due to the high rate of

unemployment and the decrease in income caused by the ineffective preventive measures to

cope with the pandemic (Mourad 2020)

Accommodation

Within the tourism industry, Airbnb is known as one of the most popular forms of

accommodations besides hotels and it is also becoming the substitution threat due to its

popularity among tourists and the convenience that it brings (Dori 2020) Despite having moderntechnology and offering convenience to tourists, prices of Airbnb in Egypt ranks from $24 to $80 per night which is a more affordable price considering the household income of Egypt citizens

(figure 2)

Figure 2 Airbnb prices in Dahab, Egypt

Determinant 2: People preferences

Although there was an upward trend in inbound tourism since 2017, a few people, especially Eroupeantravellers still do not prefer travelling to Egypt as the country’s tourism industry had suffered

from two tough events in the past (Egypt Independent 2021) Moreover, Egypt is also low in seasonality because it is a year-round destination as well as the preferences of tourists for uniqueness and

exclusive experiences when travelling, therefore results in negative tourism image for tourists from other countries (Egypt Independent 2021, figure 3)

Figure 3 EU tourist number of nights by nation

Transportation

Developing and investing in the transportation sector is important to Egyptian citizens due to the

growing population, increase productivity in the tourism industry as well as connecting with the

international market (World Bank n.d.) After the start of COVID-19, its citizens prefer to stay at

home and practice social distancing instead of going out or traveling As a result, the demand

for transportation began to have a downward trend

Travel Organization

The MoT is one of the main stakeholders that are responsible for organizing and advertising

new forms of transportation within Egypt (World Bank n.d.) Moreover, the MoT along with the

Cairo Transport Authority operated and provide fundings to successful BRT systems for both

citizens and international tourists (World Bank n.d.) It is estimated that after the pandemic in around 2025, high-speed rail will be developed in order to meet the demand of international tourists as well as the daily usage of local citizens

C Supply determinants

Egypt Economic Report from 2020 to 2021 and also predicts the future of economic

development in Egypt in 2022-23 Fortunately, Egypt is one of the Arab countries predicted to grow despite for the appearance of Covid pandemic According to Oxford Business Group, the economic growth was estimated at 4.5% to 3.5%, before dropping this figure to 2% in May

2020 However, this is still a respectable number during this pandemic and keep Egypt from recession due to the positive number of GDP In fact, the tourism industry in Egypt is hardest hit due to low tourism revenue, the country's current income is in deficit due to the absence of visitors The government has taken solutions to lockdown, however, they have invested and developed other industries such as oil, local industry, local manufacturing in the hope of

replacing imported goods in the future (Yousef S and Malaika T, 2021) Because this disruption has caused supply to decrease, the government is also supporting domestic businesses with industries to hope to turn the situation into a proactive one in the future

Attraction

The potential for tourism development in Egypt is high, so the government is paying great attention to the development of ecotourism According to Frommer's, a travel agency in Egypt, Egypt is in fact implementing a plan to develop green tourism in this country They are

establishing a total of 21 protected areas near the Red Sea, they are raising capital from many domestic and foreign donors, including the participation of the EU Among them are the Ras Mohamed National Park next to the Gulf of Suez, which is home to a very popular snorkeling and reef site, or the St Catherine reserve in South Sinai, which preserves cultural heritage and wildlife (Oxford Business Group, 2021)

Accommodations

According to Daily News, hotel supply in Egypt will fluctuate over 83 thousand rooms and will reach over 90,000 rooms in 2021-2022 Before Covid, famous cities in Egypt always accounted for a high percentage of hotel supply (Cairo, Alexandria and Hurghada) This rate fell by an average of 27% in Cairo and Hurghada For Alexandria, it is only 1% down because it is a new destination on the Mediterranean coast, attracting a lot of domestic tourists It can be said that Alexandria has saved the hotel supply in Egypt Besides, Egyp has also improved modern hotels instead of old traditional hotels, as well as allowing individuals to own rooms or propertiesfor tourists (Oxford Business Group, 2021)

D Diagram

I Attractions

1 Natural attractions

Natural attractions (Sahara el Bayda and Al Nayak Beach)

From a theoretical perspective, the low demand and upward supply will create a significant change in equilibrium Specifically, the COVID-19 affects the tourism industry, resulting in the loss of more than 70 percent of the number of foreign tourists arrivals due to travel ban (Nadal, 2021) In addition, COVID-19 is also considered an excellent moment for recovering natural resources including wildlife and the environment (Dr Anna, 2021) It results in a 20% discount

on entrance fees of historical museums and sites to attract more tourists (Oxford Business Group, 2020)

2 Primary man-made structures

Man-made Location ( Pyramids of Giza and Mosque of Ibn Tulun)

The demand of visitors to visit these attractions will decline due to the lesser number of tourist arrivals to both Pyramids of Giza and Mosque of Ibn Tulun during the epidemic period In theory,the decrease of demand and supply leads to the reduction of price and quantity demanded However, in reality, the ticket entrance price at Pyramid of Giza increases steadily from

approximately 5 dollars (2018) to 9 (2021) dollars (Norman, 2018) (Egypt Tailor Made, 2021)

3 Purpose built attractions

Purpose built attractions (Abu Simbel and The National Museum of Egyptian Civilization)

Regarding two purpose built attractions, The National Museum of Egyptian Civilization and Abu Simbel, both of these attractions undoubtedly affected by the Covid-19 pandemic Therefore, both demand and supply decrease significantly because of the drop of foreign tourists leading tothe reduction in price However, in reality, the entrance fee of Abu Simbel does not decrease, and it increases from 9 dollars (2018) to approximately 17 dollars (2021) (The World Travel Guy,2019) (Julie, 2021)

II Accommodation

Accommodation

Both demand and supply of accommodation also suffer a huge decrease since the lesser of foreign tourists as well as the cost of production In addition, numerous hotels have to lay off and owe their employees’ salaries Thereby, they provide many attractive offers through Egypt private tour packages during Coronavirus with cheaper price (Cleopatra Egypt Tour, n.d)

III Transportation

Aviation industry

Due to the spread of Covid-19, customers' demand decreases since they want to put theirsafety as the top priority by applying social distancing, so the number of guests decreases.Moreover, the price of fuel decreases, leading to an increase of supply, but the price is stilldecreasing (Ahram Online, 2021) In reality, to attract more customers, the government providesnumerous policies by discounting the price for guests who use Egypt Air and Airco (OxfordBusiness Group, 2020)

IV Travel organizer

Travel organizer

The Covid pandemic influences seriously to the tourism industry by limiting the number of tourists, and numerous travel organizers provide various engaging offers through Egypt private tour packages during Coronavirus with cheaper price to compete with the other competitors (Cleopatra Egypt Tours, n.d) Therefore, the demand of customers declined during Covid-19, butthere is an increase in supply It results in lower price and lower equilibrium

V Destination organizer

Destination organizer

In 2018 and 2019, the Egyptian Tourism Authority promoted inbound and domestic tourism through managing the development and diversification of the tourism product (OECD, 2020) Nevertheless, the COVID-19 pandemic has reduced the demand of customers to consume products It illustrates that there is a decrease in demand and an increase in supply, and the equilibrium point and price has changed