Tunisia, Kenya And Egypt On The Right Track In Bid To Reignite Tourism

By Kurt Davis Jr. AFKI Original Published: August 18, 2017, 5:02 am
Reignite tourism - Tourism was affected in Tunisia after terrorist attacks. Photo - Travel + LeisureTourism was affected in Tunisia after terrorist attacks. Photo - Travel + Leisure

Terrorism and political turmoil have slashed tourism revenue in some North African countries, with governments and businesses desperate to reignite interest following the reputational damage and dwindling numbers.

Three countries, in particular, manifest the grave penalties paid for the outbreak of violence at home and the battle to overcome bad reputations.

Having said that, Tunisia, Kenya, and Egypt may be the three most likely candidates to educate other countries on the ills of conflict, the financial repercussions and the efforts necessary to regain one’s footing in the international marketplace for tourists.

Tunisia

The lovely country at the top-tip of Africa was a tourism favorite until two ISIS attacks in 2015 – the first at the Bardo National Museum in Tunis and the second on a beach in the resort city of Sousse – undercut its appeal to tourists.

As 2015 closed out, European tour and cruise companies shut down operations and proceeded to wait until times (and tourist sentiment) changed. Visitors to Tunisia dipped about 25 percent to 5.4 million in 2015 and revenues plummeted 35 percent to $1.1 billion.

The drop was particularly tough for the country as tourism was rising in 2013 and 2014. The 4.5 million visitors in 2016, compared to a peak year of 6.9 million in 2010, points to a sector in turmoil.

But things are looking up with tour operators Thomas Cook and TUI Group already reporting a boost in bookings from France and Germany, traditionally Tunisia’s biggest source countries for European visitors.

Still, the revenue rebound is trailing visitor growth. For example, in 2016, the number of visitors increased but total revenue for tourism dropped. Operators in Tunisia hope that the remaining months of 2017 could be the launching pad for 2018, with August 2017 already looking moderately better compared to last year.

Yet any shock in the tourism market (i.e., any terrorist attack) will thwart the recovery. The security plastered around Tunis and throughout the country suggests the government is quite aware of this issue.

Kenya

Kenya is awaiting the return of tourists. Fighting bad election press in 2017 and 2013, and the massive explosion of post-election violence in 2007 – where more than 275 people were killed – represent the uphill battle for the East African economic star. The country is home to 60 national parks and reserves, and a wide offering of cultural and historic attractions. It is also host to miles and miles of beautiful coastline, including Malindi and Mombasa.

Mombasa – best known as a melting pot of cultures from all sides of the Indian Ocean – is the manifestation of the Kenyan tourism challenge as relates to terrorism. An attack by Al Shabaab, a jihadist fundamentalist group that has previously carried out attacks in Kenya, in June 2014 killed nearly 50 people when a group of its militants stormed the Kenyan coastal town of Mpeketoni and launched a major assault on a police station, hotels, and government offices.

The attack cemented travel advisory warnings for the coastal regions, enclosing Mombasa and other coastal towns into the incessant advisory warnings from Europe and the United States, especially since it followed a deadly terror attack on the Westgate Shopping Centre in 2013 that killed nearly 70 people.

These realities had remained in the minds of tourists as the decline in tourists from the U.K. and the U.S. were about 16 percent and 11 percent in 2015, and those numbers have not recovered to date. The earnings from the sector also dropped 3 percent in 2015 despite growth from countries within Africa, such as South Africa and Nigeria.

The reality remains that the government knows more must be done to change the outlook, thus the $160 million set aside for marketing in 2016. A similar figure is in the budget from 2017-2018 but the true number will better be known after election-spending is accounted for – ironically the latest election being another event stalling tourism growth.

But like Tunisia, there is optimism as the nation is thwarting major outbreaks of violence in the country. Perceptions will sadly change at a slower pace but more peaceful elections and less bad press (which some Kenyans argue is hard to avoid) is a good start to a rebound in the sector.

Egypt

Egypt, like its northern African neighbor Tunisia, endured a major blow to its tourism industry in recent years. The Arab spring in 2011 hit the country harder than Tunisia and then multiple terrorist attacks in the last few years only reminded potential tourists of the challenges in the country.

Most notably, a plane crash in 2015 by a Russian commercial aircraft flying from Sharm el Sheikh to St. Petersburg went down, with many investigators believing it was a result of a bomb. Then, in January 2016, there was a knife attack at the Bella Vista Hotel and, on Palm Sunday this year, two bombs went off during church services, killing 45 Coptic Christians.

The terrorist incidents have effectively been spread out to the point that they efficiently thwart any tourism recovery as soon as it gains momentum in the country. The reality of the situation is that the country is attracting a little more than one-third of the nearly 15 million tourists visiting Egypt before the 2011 uprising.

In other words, only 5.3 million, according to the chairman of Egyptian Tourism Authority, made the trek to the country that hosts the pyramids, the Dead Sea and numerous other historical sites.

Tour operator Thomas Cook is reporting that the booking numbers suggest a return of tourists for the region. But the government knows this bump is also fragile and continues its aggressive marketing campaigns, even targeting new markets such as Central Europe, North Africa, the Balkans and Turkey.

Previous years do not show many tourists from these regions compared to the U.S. and Western Europe, but Egypt is betting on these travelers to be first movers in the return to growth in the tourism sector. But, as the Egyptian Tourism Authority has already acknowledged, the return of Western tourists is imperative to growing earnings in the sector.

Thus keeping the peace and maintaining a high presence of security remains a priority. Yet, as one tourist suggested to me, the massive presence of security can almost have the opposite effect as travelers return home and translate the security presence as insecurity. That concern will have to be addressed.

 

Kurt Davis Jr. is an investment banker focusing on the natural resources and energy sectors, with private equity experience in emerging economies. He earned a law degree in tax and commercial law at the University of Virginia’s School of Law and a master’s of business administration in finance, entrepreneurship and operations from the University of Chicago. He can be reached at kurt.davis.jr@gmail.com.

Sign up for the AFKInsider newsletter — the most compelling business news you need to know from Africa and the African diaspora, delivered straight to your inbox.

Tags: , , , , , , ,