Value chain analysis for tourism in Egypt

The tourism market in Egypt is dominated by international tour operators and hotel chains, mainly offering stays in Red Sea resorts and cultural tours to Gizeh, Luxor, Aswan, and Cairo. Nile cruises are another relevant element of the current tourism assortment. More than 50% of the overnight stays are generated by European tourists, mainly coming from the three main source markets: Germany, UK, and Italy.

Sustainability does not play a relevant role in the Egyptian tourism sector currently. International chains, of course, run their own corporate social responsibility (CSR) programmes and a growing number of the larger hotels and resorts have been improving their sustainability standards. But it is still rare to find specific products offering sustainable tourism, community-based tourism (CBT) initiatives, niche packages and innovative tours.

On the other hand, a relevant part of the Egyptian Tourism Reform Programme relates to diversification of the sector, aiming at supporting efforts for the development of sustainable tourism. There is also growing demand from European tourists for new and innovative products, and sustainable tourism providers, such as ecolodges, desert camps and community-based tourism in Egypt.

This gap between little supply and rising demand has not been closed until now. The packages European tour operators offer which are dedicated to sustainability are very similar and offer more or less the same itineraries, such as Nile cruises, cultural tours to Gizeh, Luxor, Aswan, and diving packages. Sustainable MSME accommodations are mainly concentrated in the Western Desert and the Aswan and Luxor regions, but can also be found in the Red Sea area. The local and national initiatives to develop more sustainable and innovative tourism products, which had been established earlier in this decade, could not keep up their work after the tourism crisis in 2016.

The Egyptian Tourism Reform Programme aims to support sustainable tourism development and diversify tourism, but the enabling environment for MSMEs lacks a private business-oriented tourism policy. Several regulations, as well as issues with new licences for tour operators and intensified security regulations for touring remote areas hinder the sector and make it difficult for start-ups and small enterprises to create new tourism products.

Nevertheless, there are opportunities for CBI to intervene and foster MSMEs in their efforts to set up new products, become more sustainable and increase their exports to the EU. With the end of the tourism crisis and rising demand from European and other countries, there is a basis for MSMEs to develop new products. In addition, some other players are very motivated to continue their initiatives and efforts, which they were forced to stop in 2016. First, initiatives driven by the private sector to establish BSOs with a sustainable and innovative approach exist and deserve to be supported. The existing BSOs could also be part of a CBI intervention, as knowledge of digitalisation, quality of service, sustainability and education could be improved.

One of the core results of the VCA is a recommendation about possible CBI interventions. The most promising projects are the following.

Business Export Coaching:

1. Awareness raising — demonstrate opportunities for MSMEs offering sustainable tourism
2. Plan for sustainable tourism products and experiences
3. Support the establishment of MSME networks, clusters and alliances
4. MSME entrepreneurship and existing companies’ development programme

Business Support Organisations interventions:

1. Support the institutionalisation of an ecotourism council or NGO
2. Enhance capacities to advocate for and facilitate tourism MSME support
3. Support capacity building of tourism associations to better serve sustainable tourism MSMEs
4. Strengthening tour guides in applying modern and innovative entrepreneurial skills
5. Workforce development driven by market demand

Integrated interventions:

1. Support the Ministry of Tourism (MoT) in the implementation of the sustainable tourism development strategy addressing the needs of MSMEs
2. Facilitate public-private dialogue by establishing working groups on different levels to address barriers and obstacles for MSMEs

1. Product development and eco-friendly certification scheme; Green Star Certification Programme

1. Strengthen MSMEs and government authorities to adopt digitisation and digitalisation to enhance their competitive position