Egypt is seeking investors for the development of upscale tourism projects in untapped areas along the Red Sea as it pushes to revive its vital tourism industry to pre-2011 revolution levels within three years.
In addition to attracting international investments, the home of the pyramids will reform the structure and regulations governing the sector and train staff to handle the expected pick-up in growth, Egypt's tourism minister Rania Al Mashat, told The National in an interview. Already second-quarter bookings look "promising" and 2018 is expected to be "stronger" than last year.
The Egyptian Tourism Development Authority "has allocated land that we can advertise and be able to tap international investors for, this is still in the works and will be announced in due time,” Ms Al Mashat said. “It is going to be a very high-end type of project to bring in high-end tourists."
Ms Al Mashat, who held a top position at the Central Bank before moving to the International Monetary Fund, took over her new role in January as tourist arrivals have recently been climbing after the sector was hit hard by the downing of a Russian jet in 2015 and other violence. Egypt hosted 8.3 million annual visitors last year compared to 5.4 million in 2016. Ultimately the goal is to return to the levels before the 2011 uprising that ousted President Hosni Mubarak when the country hosted more than 14 million visitors.
The country expects to welcome “north” of eight million visitors this year as it seeks to diversify its source markets, encourage longer stays of two weeks from 10 days and boost visitor spending, Ms Al Mashat said. The country is “steadily” moving towards its goal of returning to the pre-revolution tourism levels within the next two to three years and tourism’s contribution to GDP is set increase this year beyond the current level of 15 per cent.
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Its fastest growing markets are in eastern Europe, with increased interest from Ukraine, Czech Republic and Poland, as well as Asia where it has seen a 60 per cent increase in Chinese tourists last year, she said. Arab tourists make up 30 per cent of total visitors, with the “lion’s share” coming from the GCC.
Russia resumed flights between Moscow and Cairo on April 12, lifting a ban on flights more than two years following the downing of a Russian passenger jet after its take-off from the Red Sea resort of Sharm El-Sheikh, killing all 224 on board. The return of Russian tourists, who long favoured Egypt’s sunny coasts, is a boost to the North African country, which had relied long heavily on their influx.
“The numbers are quite strong, even though it has been only a week and its quite promising,” she said. “Hopefully we’ll see their return to Sharm al Sheikh soon.”
Direct flights between Russia and Egypt’s popular Red Sea resorts have yet to resume.
“Visits to the Red Sea have not been interrupted despite the Russians not going to Sharm, we have seen an increase in German tourists to the Red Sea in numbers we have not seen before, so that has been a busy place despite that, we expect that to go up with the resumption of the Russian flights,” she said.
Egypt has sought to improve airport security after the 2015 attack, investing millions of dollars on infrastructure and undergoing inspections by foreign experts.
“The resumption of flights between Moscow and Cairo is testament that our airports are safe,” she said. “The requests we get from other airlines to land in Sharm, Hurghada or Marsa Alam is another testament that things are safe.”
With its new Grand Egyptian Museum, an archaeological center housing 50,000 ancient artifacts, opening in 2019 in Cairo and a redevelopment of the area surrounding the pyramids, Egypt is highlighting its core heritage tourism but also showcasing diverse offerings.
It is talking with Greece and Cyprus about a joint project to bring cruise ships to all three destinations, targeting wellness tourism for medical trips and encouraging “daring” tourists to explore desert destinations such as the Siwa oasis with the aim for longer stays.
“In Egypt, everyone’s taste and budget can be met,” Ms Al Mashat said.
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Wednesday: West Indies v Scotland
Thursday: UAE v Zimbabwe
Friday: Afghanistan v Ireland
Sunday: Final
The biog
Age: 46
Number of Children: Four
Hobby: Reading history books
Loves: Sports
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The biog
Name: Mariam Ketait
Emirate: Dubai
Hobbies: I enjoy travelling, experiencing new things, painting, reading, flying, and the French language
Favourite quote: "Be the change you wish to see" - unknown
Favourite activity: Connecting with different cultures
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What is the FNC?
The Federal National Council is one of five federal authorities established by the UAE constitution. It held its first session on December 2, 1972, a year to the day after Federation.
It has 40 members, eight of whom are women. The members represent the UAE population through each of the emirates. Abu Dhabi and Dubai have eight members each, Sharjah and Ras al Khaimah six, and Ajman, Fujairah and Umm Al Quwain have four.
They bring Emirati issues to the council for debate and put those concerns to ministers summoned for questioning.
The FNC’s main functions include passing, amending or rejecting federal draft laws, discussing international treaties and agreements, and offering recommendations on general subjects raised during sessions.
Federal draft laws must first pass through the FNC for recommendations when members can amend the laws to suit the needs of citizens. The draft laws are then forwarded to the Cabinet for consideration and approval.
Since 2006, half of the members have been elected by UAE citizens to serve four-year terms and the other half are appointed by the Ruler’s Courts of the seven emirates.
In the 2015 elections, 78 of the 252 candidates were women. Women also represented 48 per cent of all voters and 67 per cent of the voters were under the age of 40.
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