The Egyptian tourism sector is losing EGP 2.2bn per month due to the Russian plane crash on 31 October, said Minister of Tourism Hisham Zaazou during the Egypt Mega Projects conference in Cairo on Tuesday.
The incident led many countries, including Russia and the UK, to ban flights to Sharm El-Sheikh airport. Zaazou said additional, indirect losses could amount to between EGP 700m and EGP 1bn per month.
A plane with 224 Russian tourists crashed in Sinai, reportedly due to a bomb on board. “Sinai State” militant group claimed responsibility hours after the incident.
Egyptian authorities have not officially confirmed the cause of the crash yet, awaiting the final results of its investigation. However, Russian investigations have confirmed that traces of explosive material were found on the plane’s debris.
The minister said the crash severely impacted tourism across the country. Occupancy rates in the Red Sea area dropped from around 70% to 30%. He expected it would take over three months for the sector to improve.
Regarding new investments in the tourism sector, Zaazou said he targets tourist destinations that lack entertainment, such as restaurants, cinemas and clubs, and is specifically mentioning Luxor and Aswan.
Further, the North Coast requires more investments, said the minister, as it cannot compete with other Mediterranean tourist destinations in its current state.
The Egyptian economy relies heavily on tourism, especially for its foreign currency reserves. Extensive efforts by the government to improve the tourism sector, which had suffered from the political upheaval following the 25 January Revolution, have shown some results.
However, incidents such as the plane crash and the accidental killing of eight Mexican tourists by security forces in the Western Desert in September, have hit the sector hard once again.