Egyptian Sharm el-Sheikh reeling from Ukrainian and Russian exodus

  • Russian visitors have almost dried up since March
  • Last blow of war after COVID-19, security challenges
  • Daily flights from Russia expected to resume in July
  • Tourism, the main source of foreign currency for Egypt

SHARM EL-SHEIKH, Egypt, June 21 (Reuters) – Many sun loungers lie empty on the sandy beaches of Sharm el-Sheikh. On a central promenade packed with shops, cafes and nightclubs, crowds are thinner than usual.

The seaside resort on the southern tip of Egypt’s Sinai Peninsula is reeling from the war in Ukraine, which has seen Ukrainians and Russians – previously among the town’s main visitors – all but disappear, according to workers in the area. tourism.

Their absence has caused the latest in a series of shocks to a sector that accounts for up to 15% of gross domestic product and generates badly needed foreign currency.

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“Months ago we were catching our breath after the coronavirus hit and business was starting to pick up, but we got out of the frying pan into the fire,” said the owner of a small gift shop on the main Naama promenade in Sharm el-Sheikh. Bay who was called Ashraf, adding that he had lost about two-thirds of his business.

Egyptian tourism revenues have fallen sharply during the COVID-19 pandemic, rising to nearly $12 billion in 2021, central bank data shows.

The sector received a boost when Russia resumed direct flights to Sharm el-Sheikh and Hurghada, another Red Sea resort, in August 2021, six years after a passenger plane crash transporting Russian tourists had resulted in their suspension.

Although no updated data is available for this year, a cabinet briefing last month warned of a major hit to foreign currency earnings from tourism.

The government, which is also grappling with rising wheat and oil import bills, recently revised its growth forecast for the fiscal year ending this month to 5.5% and for 2022-23 to 4.5%.

Egypt’s tourism ministry did not respond to requests for comment.

SIGNS IN RUSSIAN

In Sharm el-Sheikh, which will host the COP27 climate conference in November, signs are written in Russian and English, and some hotel staff are trained in both languages.

This is an indication of the size of the market – Russian and Ukrainian visitors accounted for 31% of the number of tourists to Egypt last year, according to the government, many of them coming on organized trips to Sharm el-Sheikh and Hurghada.

In the last six months of last year, more than 1.1 million Russians and around 794,000 Ukrainians visited Egypt, according to government data.

Since Russia invaded Ukraine on February 24, Russian visits to Sharm el-Sheikh have dropped to a fraction of their previous levels, two tour operators and two city guides said. Almost all of the 20,000 Ukrainians from Egyptian resorts at the start of the war were evacuated by air. Read more

“We lost about 70% of the occupation after the war,” said the manager of a major hotel who declined to be named because he was not authorized to speak to the media.

“There is a slight increase in numbers from Armenia and Romania, but none of these numbers can be compared to those from Ukraine and Russia before the war.”

Only 1,500 to 2,000 Russians arrive each week, said Adel Hosny, head of South Sinai contracts for Russian tour operator Pegas Touristik.

Demand plummeted as Western sanctions increased travel times and costs from Russia by forcing carriers to change routes, and MasterCard and Visa credit cards issued in Russia stopped working abroad.

Daily flights are expected to resume from Russia from early July.

BRIDGING THE GAP ?

Spending by Russians still coming to Sharm el-Sheikh has gone down because they had limited access to dollars, said Ahmed Akrab, a tour guide.

The introduction of Mir, a Russian payment system created after a previous round of Western sanctions in 2015, which Egyptian media said is in the works, could help encourage a rebound, he said.

Egypt has also been trying to attract more tourists from Western Europe and the Gulf through marketing campaigns since the start of the war in Ukraine, and neighboring Israel recently launched direct flights to Sharm el- Sheikh after lowering his security warning for South Sinai.

But while tourism from Western Europe and other markets is seasonal, with fewer visitors in the warmer summer months, Russians and Ukrainians came for cheap beach vacations all year round. year, said Hosny, who like other tourism workers was not optimistic. fill the void left in the market.

“I consider it very unlikely that a market will replace the Russian and Ukrainian markets in the near future,” he said, adding that around 90% of his staff were inactive.

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Reporting by Mahmoud Salama; Editing by Aidan Lewis and Alex Richardson

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