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Q2 2013 www.businessmonitor.com EGYPT TOURISM REPORT INCLUDES 5-YEAR FORECASTS TO 2017 ISSN 1747-888X Published by:Business Monitor International
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Business Monitor report in 2013

Transcript of Tourism in Egypt

  • Q2 2013www.businessmonitor.com

    EGYPTTOURISM REPORTINCLUDES 5-YEAR FORECASTS TO 2017

    ISSN 1747-888XPublished by:Business Monitor International

  • Egypt Tourism Report Q2 2013INCLUDES 5-YEAR FORECASTS TO 2017

    Part of BMIs Industry Report & Forecasts Series

    Published by: Business Monitor International

    Copy deadline: March 2013

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  • CONTENTS

    BMI Industry View ............................................................................................................... 7

    SWOT .................................................................................................................................... 9

    Political ................................................................................................................................................. 10Economic ............................................................................................................................................... 11Business Environment .............................................................................................................................. 13

    Industry Forecast .............................................................................................................. 14Inbound Tourism .................................................................................................................................... 15

    Table: Egypt Inbound Tourism, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Table: Egypt Inbound Tourism, Top 10 Markets By Arrivals, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

    Outbound Tourism ................................................................................................................................. 17Table: Egypt Outbound Tourism, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Table: Egypt Outbound Tourism, Top 10 Destinations By Departures, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

    Travel .................................................................................................................................................. 19Table: Egypt International Tourism Receipts for Transport and Travel, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Table: Egypt Breakdown of Methods of Tourist Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

    Hotels .................................................................................................................................................. 21Table: Egypt Hotel Accommodation, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Table: Egypt Hotels and Restaurants Industry Value, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

    Industry Risk Reward Ratings .......................................................................................... 24Tourism Risk Rewards Ratings ................................................................................................................. 24

    Table: Middle East and Africa Risk Rewards Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Security Risk Reward Ratings ................................................................................................................... 25

    Table: Middle East And Africa Defence & Security Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

    Market Overview ............................................................................................................... 27Table: Top 10 Global Hotel Group Presence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Table: Egypt Transport Infrastructure Projects - Airports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

    Company Profile ................................................................................................................ 31Egyptian General Company for Tourism & Hotels ......................................................................................... 31Travco ................................................................................................................................................... 32

    Global Industry Overview .................................................................................................. 34Table: Global Tourism Indicators, International Tourist Arrivals, 2009-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Table: global tourism indicators, hotel and establishment units, 2009-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35Table: Global Sporting Calendar, 2013-2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

    Global Assumptions .......................................................................................................... 40Table: Global Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Table: Global & Regional Real GDP Growth, % chg y-o-y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42Table: Developed States - Real GDP Growth Forecasts, % . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

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  • Table: Emerging Markets - Real GDP Growth Forecasts, % . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

    Demographic Forecast ..................................................................................................... 47Table: Egypt's Population By Age Group, 1990-2020 ('000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Table: Egypt's Population By Age Group, 1990-2020 (% of total) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Table: Egypt's Key Population Ratios, 1990-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Table: Egypt's Rural And Urban Population, 1990-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

    Methodology ...................................................................................................................... 51How We Generate Our Industry Forecasts ................................................................................................... 51Tourism Industry .................................................................................................................................... 51Tourism Ratings - Methodology ................................................................................................................ 52

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  • BMI Industry View

    This quarter BMI has revised and restructured its tourism reports, incorporating a greater range of data and

    focusing on the hotel industry, the value of the tourism industry itself, and the impact of macroeconomic

    factors.

    The report also analyses the investment potential which Egypt offers to large tourist industries - particularly

    global hotel groups - as they seek to maximise the growth opportunities being offered by the local market at

    the present time.

    BMI is relatively upbeat on the outlook for Egyptian tourism in 2013, predicting a 9% increase in tourist

    arrivals, to reach 13.2mn. However, we do not envisage a return to 2010's level of tourist arrivals until at

    least 2014.

    Political uncertainty remains a major impediment to Egypt's tourism industry recovering over the shortterm, with the late February 2013 air balloon crash in Luxor - which reportedly killed at least 19 tourists -

    also reviving fears as to the safety record of some local tour operators.

    Before the balloon accident, there had been some signs that tourism demand was recovering. However, this

    crash, coupled with ongoing political uprisings and other demonstrations across the country, continues to

    remind tourists of the dangers associated with travel to the country.

    An overview of Egypt's top ten inbound tourism markets highlights the fact that its tourism source markets

    are fairly well diversified around the globe. Although the top 6 markets all lie in Europe, and are inevitably

    showing some signs of slowing down, given the ongoing economic uncertainty the number one market,

    Russia, should continue to show strong growth in outbound tourism demand. This is due to its own rising

    prosperity, despite the economic difficulties elsewhere in the European continent.

    Below the Top 6, there is then good diversification in the Top 10 markets, with Saudi Arabia (Middle East),Libya (Africa) and the USA (North America) taking seventh to ninth positions, before the Netherlands(Europe) rounds out the Top 10. BMI believes that the strong diversification presented by these varioussource markets could bode well for future tourism development over the forecast period.

    Overall, BMI remains optimistic about the outlook for the Egyptian tourism industry, provided tourist areas

    remain free of the demonstrations and other political risk factors that have plagued other cities across the

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  • country. A weak outlook for the Egyptian pound could also see it favoured by tourists from the US and

    Europe.

    Among new hotel openings scheduled for 2013 and 2014 are several properties reportedly beingdeveloped by InterContinental Hotels Group (ICHG), such as the 300-room Holiday Inn AlexandriaWest, the 418-room Crowne Plaza Sharm El Sheikh Citystars and the 256-room InterContinental Sharmel Sheikh.

    Marriott Hotels' independently-operated Ritz-Carlton division is also undertaking extensive renovationworks ahead of its assumption of management for the former Nile Hilton, owned by local partner MisrHotels. The new 331-room Nile Ritz-Carlton, Cairo is scheduled to open in 2014 and will mark Ritz -Carlton's debut in the Egyptian capital.

    Carlson Rezidor is also reportedly due to open the 991-room Radisson Blu Sharm El Sheikh Lagoonlater in 2013, according to media reports.

    Outbound air traffic looks set for good growth over our forecast period to 2017, rising from 5.89mn in2013, to 6.38mn in 2017.

    This quarter, BMI has given Egypt an overall Industry Risk Rewards Rating of 49.64, putting it inseventh position for the MEA region, behind Jordan and ahead of South Africa.

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  • SWOT

    SWOT Analysis

    Strengths The sector is benefiting from a growing trend among Arab tourists to travel closer to

    home rather than take long-haul flights.

    Well-diversified source markets across Europe, Africa, Middle East and North

    America.

    Weaknesses Tourist numbers remain below those recorded before the overthrow of Hosni

    Mubarak in 2011.

    Hot air balloon crash of February 2013 has revived fears about the safety record of

    some local tour operators.

    Many Western governments retain travel advisories against travel to certain parts of

    the country.

    Opportunities Hotel groups are still investing in local construction.

    Future hotel privatisation plans could offer significant opportunities for foreign hotel

    management companies to partner with local companies.

    Possibility to develop conference and medical tourism.

    Threats Any political violence or unrest targeting tourist areas would be devastating for the

    local tourism industry.

    Any ban on alcohol or same-sex beaches imposed by Islamist hardliners would hit

    inbound tourism flows from European market.

    Escalating violence between religious groups also poses another threat.

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  • Political

    SWOT Analysis

    Strengths Egypt has no serious disputes with neighbouring states, although its relations with

    Syria and Iran are relatively tense.

    Weaknesses There is considerable domestic opposition to the government's relations with the US

    and Israel, and, increasingly, to recent economic reforms.

    Tension exists between the military and Islamist groups, including the popular Muslim

    Brotherhood.

    The transition away from authoritarian rule and the creation of necessary democratic

    institutions will be a protracted process, and there is no certainty that the end result

    will be a fully consolidated representative regime going forward.

    Opportunities The country is a major player in the Arab-Israeli peace process.

    Any success for Barack Obama's plans to re-engage with Syria and Iran would

    benefit Egypt.

    Threats Although the level of militant attacks, particularly on tourists and Western targets,

    appears to have fallen in recent years, sporadic incidents should not be ruled out.

    Demands for the military to quicken the transition process away from authoritarian

    rule may not be met, which could increase the risk of large-scale unrest.

    The reported presence of Hizbullah operatives in Sinai, apparently planning to attack

    tourist sites in Egypt, has highlighted the lack of effective policing in the region and

    added to security risks in the area.

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  • Economic

    SWOT Analysis

    Strengths Exposure to the liquidity story in the Gulf should insulate Egypt against external

    shocks to some degree and keep growth positive, assuming a relatively quick

    recovery for the region from the current turmoil.

    Low wages in global terms are advantages for foreign investors, particularly for those

    wishing to use Egypt as a base for export-oriented manufacturing.

    With a population of 84 million, Egypt is the largest market in the Arab world.

    Weaknesses Unemployment is high, which subdues demand.

    Egypt has a widening fiscal deficit owing to a surging subsidies bill and rising public

    wage costs.

    There are relatively high levels of corruption and bureaucracy.

    Opportunities The formation of a more representative government that is democratically elected

    could help reduce graft.

    Future tenders will most likely be more transparent, helping those firms not politically

    connected with the government secure lucrative contracts.

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  • SWOT Analysis - Continued

    Threats The widening fiscal deficit is adding to the costs of servicing debt, most of which is

    held domestically.

    High unemployment may lead to political resistance to privatisation plans.

    Militant attacks on tourist sites pose a downside risk to revenues from the key tourist

    sector, although increased security spending appears to have been successful in this

    regard.

    Piracy in the Gulf of Aden has resulted in large numbers of shipping companies opting

    for alternative routes that do not use the Suez canal. If the situation is not resolved,

    this key geo-strategic advantage will be lost.

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  • Business Environment

    SWOT Analysis

    Strengths The country's geographical location is good for trade as Egypt has access to both the

    Mediterranean and the Red Sea, not to mention the key Suez canal route, which

    connects Europe and Asia.

    The legal system has issued adjudications in favour of foreign firms, although there

    are frequent procedural delays.

    Weaknesses Egypt ranks 112th out of 180 states surveyed in Transparency International's

    Corruption Perceptions Index 2011, comparing unfavourably with regional peers.

    The labour market is relatively inflexible, with Egypt performing markedly worse than

    the Organisation for Economic Co-operation and Development average, and also

    inferior to the regional average on the World Bank's Hiring and Firing Workers index.

    Opportunities Efforts towards banking-sector consolidation should bring down the cost of private-

    sector credit and fuel small business growth over the long term.

    Threats Patronage networks impede attempts at fighting corruption and cutting bureaucracy.

    Although levels of education are relatively high, there is a considerable mismatch

    between the skills taught in schools and those required by most employers.

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  • Industry Forecast

    Egypt's tourism industry has been badly affected by

    the recent years of political turmoil and instability

    following the overthrow of President Hosni Mubarak

    in February 2011. According to official figures,

    tourist arrivals fell dramatically over 2011, with a

    return to 2010's level of tourist arrivals not expected

    by BMI until 2014 or 2015.

    Political uncertainty remains a major impediment toEgypt's tourism industry recovering over the short

    term, with the late February 2013 air balloon crash

    in Luxor - which reportedly killed at least 19 tourists

    - also reviving fears concerning the safety of some

    local tour operators.

    Before this balloon crash, there had been signs that

    tourism demand was recovering. However, this latest

    crash, coupled with continued political and other

    demonstrations across the country, continues to

    remind tourists of the dangers associated with travel to the country.

    The UK Foreign and Commonwealth Office currently advises against all travel to the Governatorate of

    North Sinai and advises against all but essential travel to the Governorate of South Sinai, with the exception

    of: the Red Sea Resorts including those in the entire region of Sharm el Sheikh, Taba, Nuweiba and Dahab;

    road travel between these resorts; and transfers between the resorts and the airports of Taba and Sharm el

    Sheikh.According to the FCO, 'the security situation outside the resort areas in the Governorate of South

    Sinai has deteriorated since early 2012 and there have been a number of hijacks, robberies and kidnaps inthe interior of the Governorate'. However, its advice adds that 'major tourist resorts remain stable and calm'.

    Either way, it is clear that Egypt's tourist industry will continue to face significant challenges over 2013.

    More Tourists, More Money

    Total Arrivals ('000), Tourism ReceiptsBreakdown (US$bn), 2000-2017f

    International tourism, receipts~ US$bn (LHS)International tourism, receipts for transport services~ US$bn (LHS)International tourism, receipts for travel items~ US$bn (LHS)Total arrivals, '000 (RHS)

    2000

    2001

    2002

    2003

    2004

    2005

    2006

    2007

    2008

    2009

    2010

    2011

    2012

    e20

    13f

    2014

    f20

    15f

    2016

    f20

    17f0

    10

    20

    30

    5,000

    10,000

    15,000

    20,000

    0

    Source: World Bank/Ministry of Tourism, Egypt/CAPMAS/

    BMI

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  • On a longer-term basis, it remains to be seen if the increasing presence of Islamist hardliners in local

    politics will lead to a ban on alcohol and same-sex beaches, both of which would be devastating to inbound

    tourism flows.

    The chart shows the strong correlation between arrivals and overall tourism receipts. It also reveals that

    travel items tourism receipts form by far the largest share of the overall receipt value, only a fraction of

    which is derived from transport receipts.

    Inbound Tourism

    Looking at inbound tourism flows by region, Europe is the largest source market for Egypt, accounting for

    69% of the total forecast for 2013, a figure we see remaining largely constant for the overall forecast for

    2017.

    Egypt is also reportedly taking steps to boost the number of tourists from the Middle East and other Arab

    nations. According to a February 2013 report in the UK's Daily Telegraph newspaper, the Egyptian tourism

    minister recently visited Tehran to encourage greater flows of medical tourists between the two nations.

    Moreover, if a crackdown on alcohol and different-sex beaches was to be enacted in future, then BMI

    would expect a sharp drop in European inbound tourism, which could partially be offset by higher numbers

    of Middle Eastern arrivals.

    As a result of initiatives such as medical tourism, BMI forecasts arrivals from the Middle East to increase

    by 31.2% between 2013 and 2017, to reach over 3mn tourists.

    Table: Egypt Inbound Tourism, 2010-2017

    2010 2011 2012e 2013f 2014f 2015f 2016f 2017f

    Total Arrivals, '000 14,731.00 9,845.07 12,109.43 13,219.63 14,261.35 15,254.17 16,364.36 17,567.14

    Total Arrivals, '000, %change y-o-y

    17.51 -33.17 23.00 9.17 7.88 6.96 7.28 7.35

    In-bound, arrivals byregion, Africa, '000

    411.27 379.61 519.74 579.49 623.04 651.08 688.72 739.14

    In-bound, arrivals byregion, Africa, % chg y-o-y

    1.71 -7.70 36.92 11.50 7.51 4.50 5.78 7.32

    In-bound, arrivals byregion, North America,'000

    388.39 365.89 401.33 538.13 561.39 594.81 641.41 676.97

    In-bound, arrivals byregion, North America,% chg y-o-y

    -5.24 -5.79 9.69 34.09 4.32 5.95 7.83 5.54

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  • Egypt Inbound Tourism, 2010-2017 - Continued

    2010 2011 2012e 2013f 2014f 2015f 2016f 2017f

    In-bound, arrivals byregion, Asia Pacific,'000

    441.99 399.93 513.70 523.61 557.00 602.90 665.62 727.07

    In-bound, arrivals byregion, Asia Pacific, %chg y-o-y

    17.77 -9.51 28.45 1.93 6.38 8.24 10.40 9.23

    In-bound, arrivals byregion, Europe, '000

    7,904.08 6,938.00 8,372.63 9,142.17 9,854.86 10,617.31 11,403.85 12,235.24

    In-bound, arrivals byregion, Europe, % chgy-o-y

    -8.74 -12.22 20.68 9.19 7.80 7.74 7.41 7.29

    In-bound, arrivals byregion, Middle East,'000

    1,855.85 1,613.34 2,216.79 2,343.89 2,573.15 2,693.47 2,863.18 3,076.05

    In-bound, arrivals byregion, Middle East, %chg y-o-y

    8.37 -13.07 37.40 5.73 9.78 4.68 6.30 7.44

    f = BMI forecast. Source: Ministry of Tourism Egypt, CAPMAS, BMI Calculation

    In terms of the Top 10 most important source markets for Egypt, Russia is the largest provider of tourist

    arrivals. Indeed, our forecasts call for Russian arrivals to increase by some 57.8% over the coming five

    years, as greater disposable incomes and desire for outbound tourism fuel demand. In second place, behind

    Russia, is Germany, followed by the UK, Italy, France and Poland; all of which lie in Europe.

    However, encouragingly for the longer-term development of the local tourism industry, there is then some

    diversification in the Top 10 markets, with Saudi Arabia (Middle East), Libya (Africa) and the US (NorthAmerica) taking seventh to ninth position, before the Netherlands (Europe) rounds out the Top 10. BMIbelieves that the strong diversification presented by these various source markets could bode well for future

    tourism development over the forecast period.

    Table: Egypt Inbound Tourism, Top 10 Markets By Arrivals, 2010-2017

    2010 2011 2012e 2013f 2014f 2015f 2016f 2017f

    Russia 1,976.17 1,907.79 2,589.95 2,986.38 3,343.16 3,740.66 4,215.65 4,714.04

    Germany 1,139.82 1,037.03 1,222.88 1,218.92 1,190.73 1,192.98 1,216.45 1,263.96

    UK 845.34 737.21 780.98 871.67 959.46 1,059.98 1,151.90 1,190.91

    Italy 979.96 549.56 636.68 742.72 868.96 922.59 992.21 1,012.56

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  • Egypt Inbound Tourism, Top 10 Markets By Arrivals, 2010-2017 - Continued

    2010 2011 2012e 2013f 2014f 2015f 2016f 2017f

    France 519.83 457.56 499.21 563.27 623.34 622.53 632.40 654.07

    Poland 474.05 456.85 568.15 652.73 775.39 932.24 1,009.07 1,102.50

    Saudi Arabia 434.36 338.80 426.20 391.88 429.68 435.62 452.54 477.17

    Libya 366.80 285.02 485.15 596.66 690.34 732.52 786.87 855.27

    USA 293.07 277.96 291.48 427.93 460.20 496.67 540.84 571.81

    Netherlands 244.56 220.11 254.79 263.32 257.27 262.96 274.90 293.54

    f = BMI forecast. Source: Ministry of Tourism Egypt, CAPMAS, BMI Calculation

    Outbound Tourism

    Despite its many domestic political and economic challenges, outbound tourism from Egypt is growing

    strongly and should continue to do so over BMI's forecast period to 2017. Indeed, we forecast a 34%

    expansion in outbound travel on the part of Egyptian citizens over the coming five years.

    The majority of outbound travel is to other Middle Eastern destinations, with Europe coming in secondplace. This reflects longstanding cultural and business ties that Oman has around the Mediterranean and

    beyond. Very few Egyptians travel to Africa or Latin America at the present time. Looking forward,

    although BMI is forecasting a doubling in the number of Egyptians travelling to other African destinations

    over the forecast period to 2017, this will still only amount to 15,380 departures.

    Table: Egypt Outbound Tourism, 2010-2017

    2010 2011 2012e 2013f 2014f 2015f 2016f 2017f

    Total Out-bound, touristdepartures, '000

    1,298.23 1,749.09 1,679.93 1,814.64 1,988.16 2,121.37 2,255.16 2,431.22

    Out-bound, tourist departures, %chg y-o-y

    22.51 34.73 -3.95 8.02 9.56 6.70 6.31 7.81

    Average Tourist Departure per1000 of the population

    0.02 0.02 0.02 0.02 0.02 0.02 0.03 0.03

    Out-bound, resident departuresby destination, Africa, '000

    5.97 6.25 6.41 7.70 9.49 11.15 13.00 15.38

    Out-bound, resident departuresby destination, Africa, % changey-o-y

    19.36 4.76 2.54 20.08 23.28 17.53 16.60 18.31

    Out-bound, resident departuresby destination, North America,'000

    57.44 61.72 59.46 65.98 74.61 81.53 88.55 97.47

    Egypt Tourism Report Q2 2013

    Business Monitor International Page 17

  • Egypt Outbound Tourism, 2010-2017 - Continued

    2010 2011 2012e 2013f 2014f 2015f 2016f 2017f

    Out-bound, resident departuresby destination, North America, %chg y-o-y

    15.26 7.44 -3.66 10.96 13.08 9.28 8.61 10.07

    Out-bound, resident departuresby destination, Latin America,'000

    1.24 1.56 1.35 1.62 1.96 2.21 2.47 2.80

    Out-bound, resident departuresby destination, Latin America, %chg y-o-y

    54.79 25.26 -13.10 19.36 21.61 12.68 11.66 13.35

    Out-bound, resident departuresby destination, Asia Pacific, '000

    41.65 39.14 42.80 50.68 60.27 67.27 73.90 82.49

    Out-bound, resident departuresby destination, Asia Pacific, %chg y-o-y

    17.95 -6.03 9.36 18.42 18.91 11.62 9.86 11.61

    Out-bound, resident departuresby destination, Europe, '000

    213.54 235.64 237.56 266.85 301.80 325.55 349.48 386.17

    Out-bound, resident departuresby destination, Europe, % chg y-o-y

    -2.74 10.35 0.82 12.33 13.09 7.87 7.35 10.50

    Out-bound, resident departuresby destination, Middle East, '000

    978.39 1,404.79 1,332.34 1,421.81 1,540.04 1,633.66 1,727.75 1,846.91

    Out-bound, resident departuresby destination, Middle East, %chg y-o-y

    30.60 43.58 -5.16 6.72 8.31 6.08 5.76 6.90

    f = BMI forecast. Source: National Sources, BMI Calculation

    The most visited destination by Egyptian tourists is Saudi Arabia. Many of these travellers are visiting holy

    cities or participating in Muslim pilgrimages such as Hajj. The second-most visited destination is the UK,which has a relatively large ex-pat population.

    In third place is the UAE. A portion of these departures could well include not only holidaymakers, but also

    numbers of Egyptian workers heading to jobs in the UAE. That said, there is clearly growing demand foroutbound travel on the part of Egyptian citizens to all parts of the globe.

    Table: Egypt Outbound Tourism, Top 10 Destinations By Departures, 2010-2017

    2010 2011 2012e 2013f 2014f 2015f 2016f 2017f

    Saudi Arabia 763.90 1,157.81 1,089.48 1,146.12 1,221.11 1,281.25 1,342.25 1,419.75

    UK 42.31 40.70 44.14 46.32 49.00 51.06 52.46 56.83

    UAE 150.56 164.04 161.51 181.81 208.70 230.25 252.12 279.90

    Egypt Tourism Report Q2 2013

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  • Egypt Outbound Tourism, Top 10 Destinations By Departures, 2010-2017 - Continued

    2010 2011 2012e 2013f 2014f 2015f 2016f 2017f

    Turkey 61.56 79.67 78.35 92.09 108.59 118.57 129.31 147.35

    USA 57.44 61.72 59.46 65.98 74.61 81.53 88.55 97.47

    Italy 56.00 71.00 70.17 78.00 87.43 94.25 100.70 108.40

    Oman 28.27 29.27 28.31 34.00 41.52 47.56 53.68 61.46

    Jordan 35.66 53.67 53.03 59.89 68.71 74.59 79.70 85.80

    Hong Kong 11.78 10.76 12.22 13.80 15.93 17.66 19.43 21.88

    f = BMI forecast. Source: National Sources, BMI Calculation

    Travel

    BMI estimates that receipts for transport services during 2013 will increase by some 16% in US dollar

    terms, to US$1.4bn, in line with higher visitor numbers entering the country. Transport items cover costs bytourists on all tourist transportation within Egypt, fares on buses, railways, airplanes and boat trips where

    the company operating is domestic, carrier charges and fees, excess baggage fees, car transportation costs,

    package holiday trips within that country excluding cruises, possibly car hire within that country, food and

    drink costs the transport in question.

    Table: Egypt International Tourism Receipts for Transport and Travel, 2010-2017

    2010 2011 2012e 2013f 2014f 2015f 2016f 2017f

    International tourism, receipts fortransport services, US$bn

    1.26 0.91 1.20 1.40 1.63 1.88 2.19 2.53

    International tourism, receipts fortransport services, US$bn, % changey-o-y

    25.53 -27.90 32.88 15.79 16.66 15.62 16.10 15.73

    International tourism, receipts fortransport services, EGPbn

    7.09 5.39 7.32 9.21 9.77 11.10 12.67 14.62

    International tourism, receipts fortransport services, EGPbn, % changey-o-y

    27.45 -23.94 35.72 25.88 6.06 13.69 14.14 15.33

    International tourism, receipts fortransport services, EURbn

    0.95 0.65 0.95 1.12 1.36 1.57 1.82 2.11

    International tourism, receipts fortransport services, EURbn, % changey-o-y

    32.48 -31.20 45.44 17.65 21.53 15.62 16.10 15.73

    International tourism, receipts for travelitems, US$bn

    13.78 10.06 12.40 13.89 15.72 17.71 20.09 22.79

    International tourism, receipts for travelitems, US$bn, % change y-o-y

    28.14 -27.00 23.25 12.04 13.13 12.69 13.42 13.43

    Egypt Tourism Report Q2 2013

    Business Monitor International Page 19

  • Egypt International Tourism Receipts for Transport and Travel, 2010-2017 - Continued

    2010 2011 2012e 2013f 2014f 2015f 2016f 2017f

    International tourism, receipts for travelitems, EGPbn

    77.65 59.80 75.28 91.69 94.30 104.49 116.51 131.70

    International tourism, receipts for travelitems, EGPbn, growth y-o-y

    30.10 -22.99 25.89 21.80 2.85 10.81 11.50 13.03

    International tourism, receipts for travelitems, EURbn

    10.39 7.24 9.76 11.11 13.10 14.76 16.74 18.99

    International tourism, receipts for travelitems, EURbn, % change y-o-y

    35.24 -30.33 34.90 13.83 17.84 12.69 13.42 13.43

    f = BMI forecast. Source: World Bank, UN, BMI Calculation

    However, it is the receipts for travel items which are account for the largest share of the money pie, forecast

    by BMI to reach US$13.89bn in 2013 (up 12% y-o-y in US dollar terms) and then to rise to US$22.79bn by2017. International tourism receipts for travel items are expenditures by international inbound visitors in the

    reporting economy. These receipts include any prepayment made for goods or services received in the

    destination country. They also may include receipts from same-day visitors, except in cases where these are

    so important as to justify a separate classification. Travel items can include such things as sun cream andother common travel accessories, travel luggage bought in Egypt, tickets to get into national parks, cruise

    excursions and so on.

    The breakdown of tourist travel into specific sectors shows that Egypt is massively weighted towards air

    travel in the tourist sector, both in domestic tourism and outbound tourism. Outbound air traffic looks set for

    good growth over our forecast period to 2017, rising from 5.89mn in 2013, to 6.38mn in 2017.

    Moving forward, however, BMI believes that cruise ship tourism will also play an ever-increasing role in

    Egypt's overall tourism industry over our forecast period to 2017, especially if there is a return of political

    stability.

    Egypt Tourism Report Q2 2013

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  • Table: Egypt Breakdown of Methods of Tourist Travel

    2010 2011 2012e 2013f 2014f 2015f 2016f 2017f

    Air transport passengers carried, mn,out-bound

    5.47 5.83 5.78 5.89 6.02 6.13 6.24 6.38

    Air transport passengers carried, mn,out-bound, % change y-o-y

    -11.94 6.58 -0.95 1.86 2.35 1.77 1.74 2.25

    Air transport, registered airlinedomestic and non-domestic takeoffs,'000

    49.51 52.00 51.62 52.36 53.32 54.05 54.79 55.76

    Air transport, registered airlinedomestic and non-domestic takeoffs,'000, % change y-o-y

    -12.24 5.03 -0.73 1.44 1.83 1.38 1.37 1.77

    f = BMI forecast. Source: World Bank, UN, BMI Calculation

    Hotels

    Egypt's hotel industry has been severely hit by the recent years of political upheaval. Openings in recent

    years have been scarce, but have included Accor's first Ibis Styles hotel in Egypt, at Dahab Lagoon.

    Given the continued uncertainty over the domestic political and economic outlook, BMI is cautious on the

    outlook for the local hotel industry, forecasting virtually no growth in the number of hotels and

    accommodation establishments over the forecast period to 2017. Clearly, if there is an improvement in the

    local political situation, then we would look to make some upward predictions to our currently downbeat

    forecasts. We also predict a slight drop in total overnight stays and occupancy rates across the forecast

    period.

    Table: Egypt Hotel Accommodation, 2010-2017

    2010 2011 2012e 2013f 2014f 2015f 2016f 2017f

    Number of Hotels andestablishments '000

    1.24 1.26 1.27 1.27 1.28 1.28 1.28 1.29

    Number of Hotels andestablishments '000% change y-o-y

    -3.43 1.61 0.64 0.32 0.31 0.31 0.23 0.23

    Total overnight stays'000

    51,800.00 53,803.35 52,874.90 52,419.70 51,992.57 51,585.49 51,130.29 50,637.12

    Total overnight stays'000, % change y-o-y

    -1.71 3.87 -1.73 -0.86 -0.81 -0.78 -0.88 -0.96

    Average length ofstay, nights

    3.64 3.64 3.64 3.64 3.64 3.64 3.64 3.64

    Egypt Tourism Report Q2 2013

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  • Egypt Hotel Accommodation, 2010-2017 - Continued

    2010 2011 2012e 2013f 2014f 2015f 2016f 2017f

    Average length ofstay, nights, %change y-o-y

    0.74 - - - - - - -

    Hotel rooms '000 141.19 139.78 138.38 138.65 138.93 139.28 139.56 139.84

    Hotel rooms '000, %change y-o-y

    -4.90 -1.00 -1.00 0.20 0.20 0.25 0.20 0.20

    Occupancy rate % 55.00 55.10 55.49 55.41 55.33 55.24 55.16 55.08

    f = BMI forecast. Source: N/A. Occupancy Rate = Room occupancy rate

    Lastly, BMI believes that the overall value of Egypt's hotel and restaurant industry will climb from US

    $4.29bn in 2013, to US$5.03bn by end-2017, representing growth of 17.2%.In GDP terms, the contributionof the hotels and restaurants industry to overall GDP will fall slightly from 1.59%, to 0.95%.

    Table: Egypt Hotels and Restaurants Industry Value, 2010-2017

    2010 2011 2012e 2013f 2014f 2015f 2016f 2017f

    Domestic Hotels andRestaurants Industry ValueEGPbn

    33.76 28.30 28.06 28.30 28.50 28.74 28.88 29.07

    Domestic Hotels andRestaurants Industry ValueEGPbn, % change y-o-y

    9.49 -16.15 -0.88 0.88 0.71 0.83 0.51 0.63

    Domestic Hotels andRestaurants Industry Value, US$bn

    5.99 4.76 4.62 4.29 4.75 4.87 4.98 5.03

    Domestic Hotels andRestaurants Industry Value, US$bn, % change y-o-y

    7.84 -20.52 -2.95 -7.21 10.78 2.54 2.24 0.98

    Domestic Hotels andRestaurants Industry Value,EURbn

    4.52 3.43 3.64 3.43 3.96 4.06 4.15 4.19

    Domestic Hotels andRestaurants Industry Value,EURbn, % change y-o-y

    13.82 -24.15 6.21 -5.72 15.39 2.54 2.24 0.98

    Domestic Hotels andRestaurants Industry Value, %of GDP

    2.65 1.99 1.78 1.59 1.38 1.21 1.06 0.95

    Domestic Hotels andRestaurants Industry Value, US$per capita

    73.85 57.69 55.04 50.23 54.73 55.24 55.61 55.32

    Egypt Tourism Report Q2 2013

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  • Egypt Hotels and Restaurants Industry Value, 2010-2017 - Continued

    2010 2011 2012e 2013f 2014f 2015f 2016f 2017f

    Domestic Hotels andRestaurants Industry Value, US$per capita, % change y-o-y

    5.98 -21.88 -4.60 -8.75 8.98 0.92 0.68 -0.52

    Domestic Hotels andRestaurants Industry Value peremployee, US$

    12,876.07 9,834.96 9,185.92 8,215.44 8,782.94 8,701.70 8,606.28 8,690.32

    Domestic Hotels andRestaurants Industry Value peremployee, US$, % change y-o-y

    3.46 -23.62 -6.60 -10.56 6.91 -0.92 -1.10 0.98

    f = BMI forecast. Source: UN, ILO

    Egypt Tourism Report Q2 2013

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  • Industry Risk Reward Ratings

    Tourism Risk Rewards Ratings

    Table: Middle East and Africa Risk Rewards Ratings

    Rewards Risks

    Limits ofpotentialreturns

    TourismMarket

    CountryStructure

    Risks to realisationof potential returns

    Marketrisks

    CountryRisk

    TourismRating

    Rank

    UAE 65.31 66.67 63.28 62.42 77.53 50.06 64.44 1

    Qatar 61.15 63.33 57.88 64.65 75.08 56.11 62.20 2

    Israel 62.00 53.33 75.00 61.61 62.69 60.74 61.88 3

    Bahrain 59.55 66.67 48.86 66.86 68.00 65.93 61.74 4

    Kuwait 58.13 66.67 45.33 61.55 65.19 58.58 59.16 5

    Jordan 53.22 61.67 40.54 61.06 62.37 59.99 55.57 6

    Egypt 48.69 52.50 42.96 51.87 60.84 44.52 49.64 7

    SouthAfrica

    42.66 41.67 44.15 61.94 60.51 63.10 48.44 8

    Oman 43.37 50.00 33.43 56.36 75.53 40.67 47.27 8

    SaudiArabia

    38.12 38.33 37.79 60.95 74.70 49.70 44.97 8

    Kenya 39.21 35.00 45.51 40.09 48.85 32.93 39.47 8

    Morocco 32.07 36.67 25.16 53.82 57.95 50.44 38.59 9

    Source: BMI

    Limits Of Potential Returns

    This is an evaluation of the sector's size and growth potential in each state, along with broader industry and

    state characteristics that may inhibit its development. The reward ratings for tourism take into account the

    numbers and percentage growth of tourist arrivals over the past year and our forecasts for future growth

    over 2013.

    BMI expects tourist arrivals figures to see a steady rise in Egypt over the coming years, despite domestic

    political uncertainty. As such, we believe Egypt will continue to see good growth in annual tourism arrivals

    and tourism revenues. This gives Egypt a Tourism Market figure of 52.50 this quarter.

    Egypt Tourism Report Q2 2013

    Business Monitor International Page 24

  • Indeed, the major Red Sea tourist resorts have been largely unaffected by demonstrations against thegovernment. However, we would have to revise Egypt's score significantly were tourists to become

    involved in any violent political unrest.

    The Country Structure score takes into account labour costs and infrastructure. Egypt is fortunate in that it

    already has quite well developed tourism infrastructure and fairly low labour costs. Egypt's Country

    Structure score is consequently 42.96 this quarter.

    Risks To Realisation Of Returns

    This offers an evaluation of industry-specific dangers and those emanating from the state's political and

    economic profile that call into question the likelihood of anticipated returns being realised over the assessed

    time period. The market risks score takes into account short term political stability and regional stability and

    also takes into account vulnerability to external factors. Egypt has an overall market risks score of just 60.84this quarter, the fourth-lowest in the region, reflecting continued uncertainty as to its future political

    direction.

    Lastly, BMI's proprietary country risk scores cover aspects such as legal framework, bureaucracy, market

    openness and security risks. Egypt scores fairly poorly for all of these and has achieved a score of 44.52 this

    quarter, again placing it towards the bottom of this metric on a regional basis.

    Taking all of the risks and rewards together, Egypt obtains an overall Rating of 49.64 this quarter, putting it

    in seventh position for the MEA region, behind Jordan and ahead of South Africa.

    Security Risk Reward Ratings

    BMI sees the growing possibility of a military coup in Egypt, if violence continues unabated. The defence

    minister, General Abdel Fattah El-Sissi, warned on January 29 that the country faced the risk of 'collapse'

    that could 'threaten future generations'. His comments followed days of violence across Egypt, in which

    dozens of people were killed. On January 28, President Mohamed Morsi declared emergency rule in the

    cities of Port Said, Suez, and Ismaila, all of which are along the vital Suez Canal. In addition, Egypt has

    seen clashes between pro-Morsi Islamists and secularists opposed to the president coinciding with the

    second anniversary of the overthrow of former president Hosni Mubarak.

    Morsi's assumption of ever greater powers following his election as the country's first democratic and

    Islamist president in June 2012 have fuelled fears of creeping Islamist authoritarianism, as opposed to the

    liberal democracy that many demanded when Mubarak was deposed. There is also widespread

    Egypt Tourism Report Q2 2013

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  • disappointment that the post-Mubarak era has been so unstable and that the economy has deteriorated over

    the past two years, as evidenced by the Egyptian pound falling to record lows in January 2013.

    Against an overall backdrop of deteriorating stability, BMI sees growing risks of a military coup. That said,

    a coup would be enormously risky for the military. An outright seizure of power would mean that the

    military would have to take responsibility for the economy as well as public order. The experience of

    comparable countries that have experienced coups in recent years, such as Pakistan (1999), Thailand (2006),and Bangladesh (2007), has shown that while coups were initially welcomed by the public as a means ofrestoring stability, the armed forces lost support within six to twelve months, leading to calls for new

    elections.

    Table: Middle East And Africa Defence & Security Ratings

    Inter-state Terrorism CriminalComposite

    domestic risk RankComposite

    security risk Rank

    UAE 84 83 78 81 1 82 1

    Kuwait 88 76 79 77 2= 81 2

    Jordan 85 71 77 74 4= 78 3

    Saudi Arabia 80 68 81 74 4= 76 4=

    South Africa 92 88 49 69 7 76 4=

    Israel 62 61 79 70 6 67 6=

    Turkey 76 60 65 63 8 67 6=

    Uganda 64 66 55 61 9 62 8

    Iran 28 79 74 77 2= 60 9

    Egypt 64 58 39 49 10 54 10

    Iraq 64 40 27 33 13 43 11

    Syria 21 52 40 46 11 38 12=

    Sudan 36 49 31 40 12 38 12=

    Libya 39 35 30 33 13= 35 14

    Yemen 37 33 29 31 15 33 15

    Scores out of 100, with 100 the highest. The 'Composite Security Risk' is the principal rating. It comprises 'Interstate' risk- the risk of becoming a primary party to an inter-state conflict that threatens significant damage to homeland; 'Terrorism'risk - the risk of terrorist groups (domestic or international) being able to launch a major attack/sustained campaign; and'Criminal' risk - the risk of (politically motivated) violence against expatriate workers. Each of the three risks is given equalweighting. The 'Composite domestic risk' rating comprises 'Terrorism' and 'Criminal' risk, each of which is given equalweighting. Each rating (State, Terrorism, Criminal) is assessed subjectively by our analysts within a clearly definedmethodology, incorporating a minimum of six conceptually distinct elements. Source: BMI

    Egypt Tourism Report Q2 2013

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  • Market Overview

    Egypt's hotel industry is slowly recovering from the

    impact of the Arab Spring in 2011 and a concomitant

    drop in inbound tourism demand. Recent research

    from hotel consultancy firm HVS Global would

    indicate that 2012 saw a strong rebound in national

    occupancy rates; however this was at the expense of

    average room rates, which reportedly dropped by

    just over 10%.

    According to recent information from the Hotelier

    Middle East website, there are some 16 major newhotel projects under construction within Egypt at thepresent time, which could add over 4,500 rooms to

    the national supply when completed.

    These include several properties being developed by

    InterContinental Hotels Group (ICHG), such asthe 300-room Holiday Inn Alexandria West, the

    418-room Crown Plaza Sharm El Sheikh Citystars and the 256-room InterContinental Sharm el Sheikh.

    Marriott Hotels is also undertaking extensive renovation of the former Cairo Hilton, which is scheduled to

    open in 2014 as the 331room Nile Ritz-Carlton Cairo, marking its debut in the Egyptian capital. Carlson

    Rezidor is also reportedly due to open the 991-room Radisson Blu Sharm El Sheikh Lagoon later in 2013.

    All of which indicates that sentiment towards the Egyptian hotel industry from the world's major hotelchains remains positive, despite the risk of continued short-term political uncertainty. Many of the foreign

    hotel chains are looking to partner with smaller, domestic firms for the development of their hospitality

    operations in Egypt.

    Visible Decline Due to PoliticalUpheaval

    Number of Hotels ('000) and Hotel IndustryValue (US$bn), 2000-2017

    Number of hotels and establishments, '000 (LHS)Hotels and restaurants industry value, US$bn (RHS)

    2000

    2001

    2002

    2003

    2004

    2005

    2006

    2007

    2008

    2009

    2010

    2011

    e20

    12e

    2013

    f20

    14f

    2015

    f20

    16f

    2017

    f0

    0.5

    1

    1.5

    0

    2.5

    5

    7.5

    Source: CAPMAS/BMI/UN

    Egypt Tourism Report Q2 2013

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  • Table: Top 10 Global Hotel Group Presence

    Global Hotel Group Presence in Egypt Hotel Brands present in Egypt

    Accor Hotels Operates 17 hotels (3,935 rooms) across the country as ofJune 2012.

    Mercure, Novotel, Sofitel

    Best Western Operates one four-star resort at Marsa Alam. Best Western

    Carlson Rezidor HotelGroup

    Operates one Park Inn by Radisson resort at Sharm ElSheikh, as well as four Radisson properties (hotels andresorts) in Alexandria, Cairo, El Quseir and Sharm ElSheikh.

    Park Inn by Radisson, RadissonBlu

    Choice Hotels International No Presence not present

    Hilton Operates five hotels in Cairo and Alexandria, plus 12resorts throughout the country, from Sharm el Sheikh toHurghada.

    Hilton Hotels and Resorts

    Hyatt Operates one Hyatt Regency Resort in Sharm El Sheikhand one Hyatt Regency hotel in Taba.

    Hyatt Regency

    Intercontinental HotelsGroup

    Operates six hotels and resorts across Egypt. Crowne Plaza, InterContinentalHotels and Resorts

    Marriott Operates eight hotels across four brands in Egypt. JW Marriott, Marriott Hotels &Resorts, Renaissance Hotels,Ritz-Carlton

    Starwood Operates 11 hotels and resorts across Egypt. Le Meridien, Sheraton, St. Regis

    Wyndham No Presence not present

    Source: BMI

    Underlining the well-developed nature of the Egyptian hotel sector, eight out of the Top 10 global hotel

    chains identified by BMI currently have a presence of at least one property in Egypt.

    Of the Top 10, Accor and Hilton are the best represented hotel chains in country, both operating some 17

    hotels and resorts. Starwood Hotels and Resorts is also a key player operating some 11 hotels and resorts

    across the country, with Marriott Hotels operating eight hotels. ICHG operates six hotels and resorts across

    Egypt, under its Crowne Plaza and InterContinental Hotels and Resorts brands.

    Egypt Tourism Report Q2 2013

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  • Carlson Rezidor operates five properties across its

    Park Inn by Radisson and Radisson Blu brands,

    with Hyatt operating two Hyatt Regency properties

    and Best Western just one resort at Marsa Alam.

    Travco is Egypt's largest leisure group and is

    engaged in a number of activities across the tourism

    sector, including the operation of hotels, cruise liners

    and travel agencies. Travco's hospitality

    management company, Jaz Hotels, Resorts &Cruises, owns and manages more than 73 hotels and

    resorts across Egypt and the Middle East. The

    company's brands include Jaz, Iberotel, Sol Y MarHotels & Resorts, and Travcotels.

    The state-owned Egyptian General Company for

    Tourism and Hotels (EGOTH) oversees 14 hotels,including the Cairo Marriott, the Palestine Hotel

    (Alexandria) and the Mena House Oberoi, and oneNile cruiser, as of August 2012. The company is

    owned by HOTAC.

    Given ongoing political uncertainty, it is little surprise that the authorities are not prioritising extensive

    amounts of expenditure on Egyptian aviation infrastructure at the present time. The below table shows that

    current and proposed airport infrastructure projects currently total just over US$1bn in Egypt, a smaller totalthan in many of its regional peers.

    Increasing Arrivals EncourageIncrease in InfrastructureConstruction Investment

    Total Arrivals ('000) and Total Investment (US$bn), 2000-2017

    TOTAL ARRIVALS: Total arrivals, '000 (LHS)INVESTMENT: Total capital investment, US$bn (RHS)

    2000

    2001

    2002

    2003

    2004

    2005

    2006

    2007

    2008

    2009

    2010

    2011

    2012

    2013

    f20

    14f

    2015

    f20

    16f

    2017

    f

    5,000

    10,000

    15,000

    20,000

    0 0

    25

    50

    75

    100

    Source: Ministry of Tourism, Egypt/CAPMAS/BMI/Central

    Bank of Egypt

    Egypt Tourism Report Q2 2013

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  • Table: Egypt Transport Infrastructure Projects - Airports

    ProjectName

    Sector Value (US$mn)

    Capacity/ Length Companies Timeframe Status

    HurghadaInternationalAirport -constructionof newpassengerterminal

    Airports 295 7.5 mn passengers Saudi Bin LadinGroup

    na Contractawarded (Jan2010)

    Cairo AirportT3 upgrade

    Airports 387 7.5 mn passengers Limak 2011- Contractawarded(March 2011)

    CairoInternationalAirport T2upgrade

    Airports 400 8.5 mn passengers na Constructionscheduled forcompletion in2013

    Bidding phase

    Source: BMI Key Projects Database

    Egypt is, however, making more of an effort to develop its domestic rail infrastructure. Although the

    primary purpose of this is to improve the carriage of local residents and cargo across the country, improved

    rail infrastructure could also have the side-effect of boosting tourism flows around the country. Certainly,

    the proposed Cairo-Alexandria high speed railway could potentially see an increase in two-centre holidays

    embracing both cities.

    There are rail infrastructure projects presently totalling some US$7.7bn across Oman at the present time,according to BMI's Key Projects Database.

    Egypt Tourism Report Q2 2013

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  • Company ProfileEgyptian General Company for Tourism & Hotels

    Company Overview EGOTH belongs to the Egyptian government through 100% ownership by the Holding

    Company for Tourism, Hotels & Cinema (HOTAC). Among the company's hotel

    business are branded international establishments such as Marriott, Oberoi Hotels,

    Sofitel and Mercure. In Q312, EGOTH property included 14 hotels throughout the

    country (Luxor, Cairo, Giza, Alexandria and the Red Sea) and one Nile cruiser. The

    group's hotel capacity amounts to approximately 3,750 rooms. The company shares in

    18 joint ventures operating in the fields of tourism, hotels and tourist development.

    EGOTH also owns plots of land at prime locations in Cairo, Luxor and Hurghada,

    allocated for hotel and tourism development projects.

    In November 2005, the former government announced plans to partially privatise five

    hotels owned by EGOTH, following EGP407mn worth of upgrade and renovation work

    to make them more attractive to potential investors. The sale of stakes in the Marriott

    Cairo, Mena House Oberoi, Sofitel Cataract Aswan, Winter Palace Luxor and Helnan

    Palestine Alexandria will not affect management contracts for the hotels.

    Operational Data Key Statistics

    No. of employees: 2,164 (FY2009/10) No. of rooms: approximately 3,750 (August 2012) Established: 1976

    Company Details EGOTH

    4 Latin America StreetGarden City

    Cairo

    Egypt

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  • Travco

    Company Overview Travco is Egypt's largest leisure group and is engaged in a number of activities across

    the tourism sector, including the operation of hotels and travel agencies. Since 1995,

    Travco has been 50% owned by German leisure conglomerate TUI. Travco's hospitality

    management company, Jaz Hotels, Resorts & Cruises, owns and manages more than

    73 hotels and resorts across Egypt and the Middle East under the following brands:

    Jaz, Iberotel, Sol Y Mar Hotels & Resorts, and Travcotels. By mid-2012, Jaz Hotels,

    Resorts & Cruises managed Egypt's largest chain of hotels (52) and a fleet of 20 cruise

    liners, which provide regular services along the Nile.

    In conjunction with the operators Alpitour Group Egypt and Touring International,

    which are both Travco subsidiaries, Travco Travel also organises travel packages to

    Egypt.

    The Iberotel Hotels and Resorts subsidiary operated a chain of 20 hotels and resorts in

    Egypt in mid-2012, and one hotel in Fujairah in the UAE.

    In September 2009, Travco Group and UAE-based Air Arabia signed a joint venture

    agreement to launch a new low-cost carrier based in Egypt. Air Arabic Egypt will serve

    Europe, Africa and the Middle East markets and will represent Air Arabia's third hub

    after UAE and Morocco.

    In October 2009, as part of a plan to expand its international operations, Travco Group

    acquired Frankfurt-based Steigenberger Hotels after three months of negotiation.

    Steigenberger Hotels has over 6,500 employees and operates 79 hotels in Germany,

    Austria, Switzerland, Italy, the Netherlands and Egypt. It operates two brands:

    Steigenberger Hotels and Resorts, with four and five-star hotels; and InterCityHotel,

    which has hotels in the upper mid-range. In 2008, Steigenberger generated revenues of

    EUR494.9mn. The acquisition makes Travco Group one of the largest operators of

    hotels in Europe and the Middle East with about 150 hotels and resorts.

    From Q412, Steigenberger will start operating three luxury cruise ships on the Nile and

    Lake Nasser in Egypt that were previously managed by Jaz Hotels, Resorts & Cruises.

    Operational Data Key Statistics

    No. of hotels (Egypt): 52 (mid-2012) No. of cruise ships: 20 (mid-2012) No. of employees: 11,000 (2007) Established: 1979

    Company Details Travco

    26th July CorridorSheikh Zayed

    Egypt Tourism Report Q2 2013

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  • 6th of October City

    12588

    Egypt

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  • Global Industry Overview

    BMI View: The global tourist accommodation sector will greatly benefit from the rise in international

    tourist arrivals forecasted from 2013-2017. The growing number of outbound and domestic-based tourists

    from Asia and Latin America has provided great incentives for the tourist accommodation sector to increase

    the number of hotels and rooms on offer across these regions. Even though underlying economic risk

    remains, over the next five years we estimate annual growth in total hotel units to be within 3-5% from

    2013 to 2017.

    Despite the difficult global economic picture, international tourist arrivals are expected to grow across 2013.

    Historically the number of tourists has been rising year on year in eight out of the ten years from

    2002-2012, the only fall being in 2009 due to the global economic crisis. In 2012, International tourist

    arrivals grew by 4.3% in 2012, we saw positive growth stemming from a number of factors including

    tourists taking advantage of a weaker euro to travel to eurozone states, as well as a growing middle class in

    Asia who have an increasing inclination to travel abroad. We expect this trend to continue. BMI estimates

    that international tourist arrivals will report growth of 4.1% at the end of 2013, an increase of 38.6 million

    tourists to 971.1 million from 2012 across BMI's tourism universe. We forecast that annual growth in

    international tourists arrivals will remain between 4-5% for the next five years from 2013 to 2017.

    Table: Global Tourism Indicators, International Tourist Arrivals, 2009-2017

    2009 2010 2011 2012e 2013f 2014f 2015f 2016f 2017f

    WORLD: Total Arrivals mn* 783.1 840.9 894.3 932.5 971.1 1019.1 1068.7 1121.1 1170.5

    WOLRD: Total Arrivals mn,% change y-o-y -4.9 7.4 6.3 4.3 4.1 4.9 4.9 4.9 4.4

    BMI

    Growing tourist arrivals driving tourist accommodation

    With international tourist arrivals set to grow from 2013-2017, the global tourist accommodation sector will

    look to support the increase in number of tourists through the construction of new hotel units. Across the

    world the tourist accommodation sector is likely to face stiff competition, and competitors look set to

    enhance market share through pricing, aesthetics by introducing wide scale renovations and, mass branding

    and marketing initiatives in the emerging markets. Over the last few years financial markets have seen an

    inflow of capital and the tourist accommodation sector has taken advantage of this by taking the opportunity

    Egypt Tourism Report Q2 2013

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  • to use leverage to initiate wide-ranging hotel renovations and construct new accommodation. Historically

    the level of total hotel units globally has been volatile, 2010 posted an increase of 3.7%, in 2011 total units

    slowed down to 0.9% and in 2012 total units increased again by 1.7%. Internationally we see the tourist

    accommodation sector increasing the number of hotel units across 2013 by 2.2% to 1.099 million units in

    total by the end of the year. From 2014-2017, BMI forecasts that annual growth in total hotel units to be

    between 2-2.5%.

    Table: global tourism indicators, hotel and establishment units, 2009-2017

    2009 2010 2011 2012e 2013f 2014f 2015f 2016f 2017f

    WORLD: Number of hotels

    and establishments, '000* 1011.1 1048.8 1058.6 1076.5 1099.8 1124.0 1149.2 1176.6 1205.9

    WORLD: Number of hotels

    and establishments, '000,% change y-o-y 4.9 3.7 0.9 1.7 2.2 2.2 2.2 2.4 2.5

    BMI

    Regionally, Latin America is set to perform the best, with forecasted growth in total hotel units to be 4.32%

    in 2013 and 4.35% in 2014. High numbers of growth are dominated by the growing trend in inbound

    arrivals within the region, and the rise of domestic tourism in countries such as Brazil. Over the same

    forecast period Brazil will see a surge in new hotel developments in preparation for the 2014 FIFA World

    Cup to be staged in twelve cities across the country and 2016 Olympics to take place in Rio de Janeiro.

    Over the last few years in the Asia-Pacific region there have been many large scale hotel development

    projects. With rising middle classes in parts of Asia such as China and India, people are more likely thanever to travel for leisure. The tourist accommodation sector in the region is likely to capitalize on the greater

    number of outbound travellers from these countries and provide a greater number of hotels and facilities to

    offer guests. In 2012, total hotel units increased by 153,358 or 3.8% from 2011. Over the next five years

    from 2013 to 2017, BMI forecasts the region to grow over 4% annually. In isolation, total hotel units in

    China and India have grown by an annual average of 12.87% and 18.36% respectively over the last five

    years from 2012. This is on the back of strong rising levels of domestic tourists and international arrivals

    that are now attracted by the better infrastructure and facilities on offer at hotels. For 2013 we forecast

    annual growth of 9% for China and 13% for India. International hotel chains Marriot International,

    Starwood Hotels & Resorts and Hilton Worldwide have outlined expansion plans in China. Starwood Hotels

    & Resorts Worldwide, now have 100 hotels in the country and are another 100 have been outlined. Marriot

    is looking to double its share of hotels within the country by 2014.

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  • Elsewhere, BMI estimates that total European hotel units will show annual growth of 0.5% for 2012. This

    lower pace of growth is largely generated by a 0.1% fall in total hotel units across Western Europe for the

    same period. Falls in domestic income have led to a decrease in domestic hotel demand and a shorter length

    of stay by international guests have fallen under 4 nights in 2012 for the first time in ten years. Across the

    region, many unprofitable hotel units have been closed and others have been relocated. Over the next five

    years from 2013, we expect this trend to continue, and estimate total hotel units will grow in the range of

    0.5-1% annually. In the Middle East, BMI estimates a bounce back in hotel construction in 2013 buoyed by

    a general lift in construction activity within the region, total hotel units will increase by 2.1%.

    Hotel rooms also set to increase

    For 2013, BMI forecasts that the total number of hotels rooms internationally will grow by 3.3%. The

    growth in the total number of rooms will be boosted twofold, firstly by new hotel construction which will

    increase the global stock levels of rooms and secondly by the restructuring and renovation of existing hotel

    units that will provide greater rooms. BMI forecasts strong growth in the total number of hotel rooms in

    Latin-America to be 5-8% annually over the next five years from 2013 to 2017. In other regions Europe will

    grow by 1.5-2%, North America by 1.5-1.6%, Asia by 2-5% and the Middle East by 2-5% over the same

    forecast horizon.

    Room occupancy rates to remain steady

    Hotel room occupancy rates remain traditionally high in city based states and locations due to the lack of

    availability of new land for new hotel construction. Singapore and Hong Kong remain the best with rates of

    86.5% and 82.37% recorded in 2011 and BMI estimates this to be around this level at the end of 2012 and

    going forward into 2013. Regionally higher occupancy rates are seen in Asia, Europe and North America.

    Globally occupancy rates are estimated to remain between 50-60% over the next five years from 2013 to

    2017, where growing room occupation will be counteracted by growth in hotel rooms.

    Overnights stays rising in Asia and Middle East

    At the end of 2011 total overnight stays internationally saw contractions of 1.6% in North America and

    1.9% in Europe from 2010. Africa also noted a contraction of over 6% during the same period with only

    Asia, Middle East and Latin America showing growth. Trends in Europe and North America remain

    subdued with hotels in major western cities a lot pricier than emerging market equivalents. In 2012, averagelength of stay in Western Europe decreased to under 4 nights, the lowest it has been in a decade. We expect

    this trend to continue and forecast average length of stay to remain under 4 nights from 2013 to 2017.

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  • Globally, BMI forecasts total overnight stays to grow at over 3% annually from 2013 to 2017, weakness in

    Western Europe will be more than counteracted by strong growth in overnight stays within the Middle East

    and Asia. Overnight stays in Middle East will grow by 9% in 2013, and by 3.8% in Asia over the same

    period. These regions will benefit from the growing number of tourist arrivals from neighbouring nations.

    Tourist accommodation sector remains sensitive to economic fundamentals

    To take stock, there still remains significant underlying risk to the tourist accommodation sector, any

    impending global economic slowdown that constricts disposable income will lead to a reduction in future

    international tourist arrivals. This in turn will lead to a situation of over capacity in the tourist

    accommodation sector which may result in losses if hotel rooms are left unoccupied. If macroeconomic

    fundamentals are to improve this will translate into an increase in international tourist arrivals and provide

    greater incentive for further tourist accommodation construction.

    Table: Global Sporting Calendar, 2013-2022

    Year Country City/Cities Event Sport

    2013 Russia MoscowIAAF World Championship

    Athletics Mixed

    2013 South AfricaRustenburg, Johannesburg, Nelspruit,

    Durban, Port Elizabeth, Africa Cup of Nations Football

    2013 Brazil

    Unconfirmed but short list is: Fortaleza,Recife, Salvador, Brasilia, Belo Horizonte,

    Rio de Janeiro FIFA Confederations Cup Football

    2013 Myanmar Naypidaw Asia Games Mixed

    2013 Sweden Malmo Eurovision Song Contest Singing

    2013 Czech republic Prague UEFA Super Cup Football

    2013 England LondonUEFA Champions League

    Final Football

    2014 BangladeshDhaka, Chittagong, Narayaganj, Rajshahi,

    Sylhet, Khulna, 2020 World Cup Cricket

    2014 Brazil

    Manaus, Fortaleza, Natal, Recife,Salvador, Brasilia, Cuiba, Belo Horizonte,Sao Paolo, Rio de Janeiro, Curitiba, Porto

    Alegre FIFA World Cup Football

    2014 Wales Cardiff UEFA Super Cup Football

    2014 Scotland Auchterarder, Gleneagles Ryder Cup Golf

    2014 Russia Sochi, Krasnaya Polyana Winter Olympics Mixed

    2014 Scotland Glasgow Commonwealth Games Mixed

    2014 China Nanjing Youth games (Summer) Mixed

    2014 South Korea Incheon Asian Games Mixed

    Egypt Tourism Report Q2 2013

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  • Global Sporting Calendar, 2013-2022 - Continued

    Year Country City/Cities Event Sport

    2014 Portugal LisbonUEFA Champions League

    Final

    2015Australia andNew Zealand Not Decided Cricket World Cup Cricket

    2015 England

    Cardiff, London, Birmingham, Brighton,Bristol, Coventry, Derbyy, Gloucester,Leeds, Leicester, Manchester, Milton

    Keynes, New Castle, Southampton,Sunderland Rugby World Cup Rugby

    2015 CanadaVancouver, Edmonton, Winnipeg, Ottawa,

    Montreal, and Moncton FIFA Women's World Cup Football

    2015 Canada Toronto Pan American Games Mixed

    2015 MoroccoCasablanca, Rabat, Fes, Marrakesh,

    Tangier, Agadir Africa Cup of Nations Football

    2015 Georgia Tibilisi UEFA Super Cup Football

    2015 Singapore Not Decided Asian Games Mixed

    2015 Australia Melbourne, Sydney Brisbane Canberra Asia Cup Football

    2016 FranceLens, Lille, Paris, Bourdeaux, Lyon,

    Marseille, Nice, Toulouse, St-Etienne UEFA Euro Football

    2016 Brazil Rio de Janeiro Olympics Mixed

    2016 India Not Decided 2020 World Cup Cricket

    2016 USA Chaska Ryder Cup Golf

    2016 Norway Lillehammer Youth Games (Winter) Mixed

    2017 Libya Not Decided Africa Cup of Nations Football

    2017 England LondonIAAF World Championship

    Athletics Mixed

    2017 Russia Moscow, Kazhan, Sochi, St Petersburg FIFA Confederations Cup Football

    2018 Russia

    Kaliningrad, Kazan, Krasnodar, Moscow,Nizhny Novgorod, Rostov-on-Don, Saint

    Petersburg, Samara, Saransk, Sochi,Volgograd, Yaroslavl, Yekaterinburg FIFA World Cup Football

    2018 South Korea Pyeongchang Winter Olympics Mixed

    2018 Australia Gold Coast City Commonwealth Games Mixed

    2018 France Paris Ryder Cup Golf

    2019England &

    Wales Not Decided Cricket World Cup Cricket

    2019 JapanTokyo, Sapporo, Yokohama, Osaka,

    Toyota, Kobe, Fukuoka, Sendai Rugby World Cup Rugby

    2020 USA Sheboygan Ryder Cup Golf

    2021 Qatar Not Decided FIFA Confederations Cup Football

    Egypt Tourism Report Q2 2013

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  • Global Sporting Calendar, 2013-2022 - Continued

    Year Country City/Cities Event Sport

    2022 QatarAl-Khor, Doha, Ash-Shamal, Al Wakrah,

    Umm Salar, Al Rayyan FIFA World Cup Football

    Source: BMI Key Projects Database

    Egypt Tourism Report Q2 2013

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  • Global Assumptions

    Our global aggregate real GDP growth forecast for 2012 remains 2.6%, though it has dipped slightly for

    2013 to 3.0% from 3.1% previously. Our overall outlook on the global economy remains unchanged. Most

    of our high-frequency global indicators suggest that output growth is slowing and global trade is stagnant at

    best, while demand and confidence are at cyclically low levels. Inflation continues to trend down as well.

    Since mid-2010, we have argued that the global economy is on the cusp of recession but that it would

    probably take a major policy error to tip it over the edge. The potential for recession still looms large, withChina facing a hard landing amid a major economic transition, the eurozone contracting and the US facing afiscal emergency in the new year.

    Table: Global Assumptions

    2011 2012f 2013f 2014f 2015f 2016f 2017f

    Real GDP Growth (%)

    US 1.7 2.0 2.1 2.5 2.5 2.3 2.4

    Eurozone 1.6 -0.6 0.6 1.4 1.7 1.9 1.9

    Japan -0.7 1.5 1.2 1.2 1.2 1.2 1.3

    China 9.1 7.5 7.1 6.0 6.0 6.1 6.0

    World 3.1 2.6 3.0 3.3 3.5 3.5 3.5

    Consumer Inflation (ave)

    US 3.0 2.1 2.0 2.0 2.2 2.2 2.3

    Eurozone 2.6 2.0 1.7 1.8 1.9 2.1 2.2

    Japan -0.2 0.1 0.4 0.8 1.3 1.8 2.3

    China 5.6 3.0 3.0 2.9 2.8 2.7 2.7

    World 4.1 3.4 3.3 3.2 3.2 3.2 3.3

    Interest Rates (eop)

    Fed Funds Rate 0.00 0.00 0.00 0.00 0.00 1.00 2.25

    ECB Refinancing Rate 1.00 0.50 0.50 0.50 0.50 1.00 1.50

    Japan Overnight Call Rate 0.10 0.10 0.10 0.10 0.10 0.25 0.50

    Egypt Tourism Report Q2 2013

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  • Global Assumptions - Continued

    2011 2012f 2013f 2014f 2015f 2016f 2017f

    Exchange Rates (ave)

    US$/EUR 1.39 1.27 1.22 1.20 1.20 1.20 1.20

    JPY/US$ 79.74 78.00 75.00 78.00 82.25 84.75 85.25

    CNY/US$ 6.46 6.35 6.45 6.55 6.60 6.60 6.60

    Oil Prices (ave)

    OPEC Basket (US$/bbl) 107.52 107.05 99.10 96.15 95.20 93.25 93.30

    Brent Crude (US$/bbl) 111.05 110.00 102.00 99.00 98.00 96.00 96.00

    Source: BMI

    Stimulatory policy looks to be confined to the monetary rather than fiscal side for the foreseeable future. In

    line with our long-standing view, the latter part of 2012 has seen an impressive degree of monetary

    stimulus, with the European Central Bank (ECB), the US Federal Reserve (Fed) and the Bank of Japan(BoJ) all announcing newly accommodative policies in September. The Fed took the biggest step with'QE3': it will commence open-ended purchases of mortgage-backed securities of US$40bn a month until'after' the economy improves, and indicated that the Fed funds rate would be anchored at 0-0.25% until at

    least mid-2015. The BoJ also decided to expand its government bond buying programme. The ECB,

    meanwhile, has revealed a framework allowing unlimited sterilised government bond purchases focused at

    the short end of the yield curve, dependent on a sovereign issuer committing to a formal macroeconomic

    adjustment programme. In addition, there will be no explicit cap on bond yields, the central bank willsurrender its preferred creditor status and the Securities Market Program will expire. We have pushed back

    our expectations for central bank tightening accordingly, with the first Fed funds and ECB refi rate hikes

    only in 2016, as opposed to 2014 in our previous set of forecasts. While these measures will not solve the

    many problems plaguing the global economy - and in fact may cause a few of their own - they are a step in

    the right direction given the inaction on the fiscal front.

    Most major emerging market central banks have also joined the monetary easing. However, they will bemore concerned about inflation, particularly as their populaces would be harder hit by higher food and

    energy commodity prices in the wake of monetary stimulus in the developed world. Emerging market

    central bankers face a tough set of choices, as they may have to decide whether to prioritise currency

    competitiveness or domestic price stability.

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  • Table: Global & Regional Real GDP Growth, % chg y-o-y

    2011 2012f 2013f 2014f

    World 3.1 2.6 3.0 3.3

    Developed States 1.4 1.0 1.5 2.0

    Emerging Markets 5.6 4.9 5.0 5.0

    Asia Ex-Japan 7.2 6.0 6.2 5.8

    Latin America 4.1 3.1 3.5 3.5

    Emerging Europe 4.8 2.8 3.5 4.1

    Sub-Saharan Africa 3.9 5.1 5.7 6.0

    Middle East & North Africa 3.2 5.6 4.0 4.3

    Table: Developed Market Exchange Rates

    2011 2012f 2013f 2014f

    Eurozone US$/EUR, ave 1.39 1.27 1.22 1.20

    Japan JPY/US$, ave 79.74 78.00 75.00 78.00

    Switzerland CHF/US$, ave 0.89 0.94 1.03 1.07

    UK US$/GBP, ave 1.61 1.57 1.58 1.60

    Table: Emerging Market Exchange Rates

    2011 2012f 2013f 2014f

    China CNY/US$, ave 6.46 6.35 6.45 6.55

    South Korea KRW/US$, ave 1,107.84 1,175.00 1,150.00 1,100.00

    India INR/US$, ave 46.67 53.50 50.00 47.50

    Brazil BRL/US$, ave 1.68 2.00 2.15 2.28

    Mexico MXN/US$, ave 12.44 13.05 12.80 12.60

    Russia RUB/US$, ave 29.41 31.72 33.00 32.75

    Turkey TRY/US$, ave 1.68 1.81 1.77 1.72

    South Africa ZAR/US$, ave 7.26 8.20 8.00 8.00

    Source: BMI

    Egypt Tourism Report Q2 2013

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  • Developed States

    Our developed state aggregate growth estimate for 2012 has ticked down to 1.0% from 1.1%, while

    remaining steady at 1.5% for 2013. Our eurozone projection for 2013 is down to 0.6% (compared with 0.7%previously). Notably, we have revised our real GDP growth forecasts for France and Italy down for 2013,and now see no Italian growth in 2013. The announcement of a framework for the ECB to purchase

    government bonds, a constructive ruling from Germany's constitutional court and a victory for pro-euro

    centrist parties in the Netherlands have been broadly supportive of efforts by policymakers to contain the

    eurozone crisis. However, with the exception perhaps of the Dutch election, these policy events have met -

    rather than exceeded - expectations, and the crisis is still far from over. Meanwhile, we have bumped up our

    Swedish growth expectation to 1.1% for 2012 from 0.5% owing to stronger-than-expected first-half growth

    figures, though we have lowered our 2013 forecast to 2.0% from 2.3%.

    Table: Developed States - Real GDP Growth Forecasts, %

    2011 2012f 2013f 2014f

    Developed States Aggregate Growth 1.4 1.0 1.5 2.0

    G7 1.4 1.3 1.6 2.1

    Eurozone 1.6 -0.6 0.6 1.4

    EU-27 1.7 -0.3 0.9 1.7

    Selected Developed States

    Australia 2.1 2.1 0.9 2.3

    Austria 2.7 0.6 1.2 1.5

    Belgium 1.8 0.5 1.1 1.6

    Canada 2.5 2.0 2.1 2.7

    Denmark 1.0 0.5 1.2 1.7

    Finland 2.8 0.1 1.6 1.9

    France 1.8 -0.2 0.6 1.4

    Germany 3.0 0.7 1.5 1.9

    Ireland 1.4 -0.5 0.3 1.4

    Italy 0.5 -2.3 0.0 1.1

    Japan -0.7 1.5 1.2 1.2

    Egypt Tourism Report Q2 2013

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  • Developed States - Real GDP Growth Forecasts, % - Continued

    2011 2012f 2013f 2014f

    Netherlands 1.2 -0.6 0.6 0.9

    Norway 1.6 1.4 0.8 0.6

    Portugal -1.6 -3.4 -1.7 0.1

    Spain 0.8 -2.1 -0.5 0.5

    Sweden 3.9 1.1 2.0 3.8

    Switzerland 2.1 0.7 1.5 1.8

    UK 1.0 0.2 1.7 2.3

    US 1.7 2.0 2.1 2.5

    Source: BMI

    Emerging Markets

    Emerging markets are set to grow by 4.9% in real terms in 2012, remaining relatively steady in 2013 at

    5.0%. The latter represents a decline from our previous forecast of 5.2%, however, as our aggregate

    forecasts have fallen for each region in 2013. The biggest downward revision among individual countries

    since our last monthly update is Argentina, which we see experiencing major economic difficulty and asignificant currency devaluation in 2013. Its growth forecast for that year has been reduced accordingly, to

    0.9% from 3.7%. Other major downward revisions are in Indonesia, South Korea and Hungary, all of whichwill face both domestic and external headwinds to growth in 2013.

    Table: Emerging Markets - Real GDP Growth Forecasts, %

    2011 2012f 2013f 2014f

    Emerging Markets Aggregate Growth 5.6 4.9 5.0 5.0

    Latin America 4.1 3.1 3.5 3.5

    Argentina 8.9 3.0 0.9 2.6

    Brazil 2.7 1.8 3.7 3.7

    Mexico 3.9 3.8 3.4 3.0

    Middle East 3.2 5.6 4.0 4.3

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  • Emerging Markets - Real GDP Growth Forecasts, % - Continued

    2011 2012f 2013f 2014f

    Sub-Saharan Africa 3.9 5.1 5.7 6.0

    South Africa 3.1 2.5 3.3 3.9

    Nigeria 7.4 7.1 7.3 7.2

    Saudi Arabia 7.1 5.2 4.5 3.5

    UAE 4.2 2.9 3.5 4.5

    Egypt 1.8 2.3 3.1 5.3

    Emerging Asia 7.2 6.0 6.2 5.8

    China 9.1 7.5 7.1 6.0

    Hong Kong 5.0 1.8 3.5 3.6

    India 6.5 5.9 7.2 6.6

    Indonesia 6.5 6.0 5.6 6.5

    Malaysia 5.1 3.8 4.6 4.3

    Singapore 4.9 2.6 3.6 3.4

    South Korea 3.7 1.9 3.0 4.6

    Taiwan 4.0 1.6 4.2 5.0

    Thailand 0.1 4.0 4.4 4.4

    Emerging Europe 4.8 2.8 3.5 4.1

    Russia 4.3 3.4 3.6 3.7

    Turkey 8.5 3.0 4.7 5.2

    Czech Republic 1.7 -0.7 0.8 1.9

    Hungary 1.7 -1.2 1.2 2.3

    Poland 4.3 2.5 2.7 3.6

    Source: BMI

    We are below consensus on growth in 2012 for the US, the eurozone, China, Japan, Russia and Brazil,

    according to the Bloomberg survey of analysts. For 2013, we are significantly below consensus on China

    and Brazil.

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  • Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS (%)

    US Eurozone Japan Brazil China Russia India

    2012 Bloomberg Consensus 2.2 -0.5 2.3 1.9 7.7 3.9 n/a

    BMI 2.0 -0.6 1.5 1.8 7.5 3.4 5.9

    2013 Bloomberg Consensus 2.1 0.4 1.2 4.1 8.0 3.7 6.0

    BMI 2.1 0.6 1.2 3.7 7.1 3.6 7.2

    Source: BMI, Bloomberg

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  • Demographic Forecast

    Demographic analysis is a key pillar of BMI's macroeconomic and industry forecasting model. Not only is

    the total population of a country a key variable in consumer demand, but an understanding of the

    demographic profile is key to understanding issues ranging from future population trends to productivity

    growth and government spending requirements.

    The accompanying charts detail Egypt's population pyramid for 2011, the change in the structure of the

    population between 2011 and 2050 and the total population between 1990 and 2050, as well as life

    expectancy. The tables show key data points from all of these charts, in addition to important metrics

    including the dependency ratio and the urban/rural split.

    Source: World Bank, UN, BMI

    Egypt Tourism Report Q2 2013

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  • Table: Egypt's Population By Age Group, 1990-2020 ('000)

    1990 1995 2000 2005 2010 2012 2015f 2020f

    Total 56,843 62,064 67,648 74,203 81,121 83,958 88,179 94,810

    0-4 years 8,507 7,989 8,172 8,552 9,008 9,149 9,212 9,063

    5-9 years 7,823 8,334 7,908 8,098 8,499 8,693 8,974 9,182

    10-14 years 6,971 7,762 8,300 7,883 8,074 8,221 8,480 8,957

    15-19 years 5,855 6,717 7,678 8,262 7,851 7,837 8,044 8,451

    20-24 years 4,902 5,341 6,308 7,538 8,158 8,028 7,737 7,930

    25-29 years 4,220 4,488 4,876 6,030 7,347 7,746 7,990 7,569

    30-34 years 3,705 4,110 4,353 4,787 5,901 6,476 7,255 7,891

    35-39 years 3,148 3,725 4,101 4,429 4,782 5,145 5,892 7,235

    40-44 years 2,848 3,136 3,706 4,094 4,437 4,537 4,796 5,894

    45-49 years 2,061 2,809 3,093 3,676 4,068 4,214 4,432 4,786

    50-54 years 1,835 1,989 2,719 3,016 3,597 3,773 4,005 4,365

    55-59 years 1,553 1,716 1,877 2,590 2,890 3,100 3,469 3,871

    60-64 years 1,289 1,411 1,577 1,745 2,429 2,559 2,728 3,289

    65-69 years 944 1,113 1,238 1,407 1,575 1,814 2,215 2,503

    70-74 years 621 746 900 1,025 1,186 1,212 1,348 1,913

    75+ years 561 677 843 1,071 1,319 1,453 1,603 1,910

    f = BMI forecast. Source: World Bank, UN, BMI

    Egypt Tourism Report Q2 2013

    Business Monitor International Page 48

  • Table: Egypt's Population By Age Group, 1990-2020 (% of total)

    1990 1995 2000 2005 2010 2012 2015f 2020f

    0-4 years 14.97 12.87 12.08 11.53 11.10 10.90 10.45 9.56

    5-9 years 13.76 13.43 11.69 10.91 10.48 10.35 10.18 9.69

    10-14 years 12.26 12.51 12.27 10.62 9.95 9.79 9.62 9.45

    15-19 years 10.30 10.82 11.35 11.13 9.68 9.33 9.12 8.91

    20-24 years 8.62 8.61 9.33 10.16 10.06 9.56 8.77 8.36

    25-29 years 7.42 7.23 7.21 8.13 9.06 9.23 9.06 7.98

    30-34 years 6.52 6.62 6.44 6.45 7.27 7.71 8.23 8.32

    35-39 years 5.54 6.00 6.06 5.97 5.90 6.13 6.68 7.63

    40-44 years 5.01 5.05 5.48 5.52 5.47 5.40 5.44 6.22

    45-49 years 3.63 4.53 4.57 4.95 5.01 5.02 5.03 5.05

    50-54 years 3.23 3.21 4.02 4.06 4.43 4.49 4.54 4.60

    55-59 years 2.73 2.77 2.78 3.49 3.56 3.69 3.93 4.08

    60-64 years 2.27 2.27 2.33 2.35 2.99 3.05 3.09 3.47

    65-69 ye