Investments In Vital German Market After Sharm Exit

Egypt is set to invest substantially in the German market to compensate for fewer tourists from Russia and the UK and after German tour operators also pulled out of Sharm el-Sheikh.

The German market has become even more important for Egypt after Russia banned all flights to the country and the UK issued a travel warning for Sharm el-Sheikh in response to the recent Russian jet crash in the Sinai Peninsula, which killed 224 people.

German tour operators have now also pulled out of Sharm el-Sheikh after the German transport ministry ordered all passenger baggage on return flights to be transported separately on cargo aircraft for security reasons. The foreign ministry has not issued any specific advice for the destination. In response, FTI, the largest German tour operator to Egypt, TUI, Thomas Cook and DER Touristik all announced on Monday (November 16) that they would suspend all holidays in the Egyptian resort.

FTI CEO Dietmar Gunz said the tour operator and flight partner Sun Express “were completely surprised” by the transport ministry’s decision. “We cannot subject our customers to that,” he said. FTI said there would be no departures before next March, and offered all customers free re-bookings to alternative destinations, including Hurghada and Marsa Alam, or free cancellations. However, like with other German tour operators, Sharm el-Sheikh is only a minor destination for FTI, accounting for about 7% of its total customer volumes in Egypt.

TUI, Thomas Cook and DER Touristik cancelled all holidays in the Egyptian resort until January 31, 2016, and are offering customers a free re-booking to an alternative destination or a full refund. Egypt specialist ETI is offering free re-bookings or cancellations for departures up to December 12 but has not yet decided how to handle bookings for the Christmas/New Year holiday period.

The German market had been performing well this year until the Russian plane crash on October 31. Visitor numbers increased by 20% up to the end of September and tour operators had double-digit growth in bookings for the forthcoming winter season. But bookings have reportedly weakened in the last fortnight.

In response to the latest developments, Egypt is planning substantial investments in the German market. Tamer Marzouk, head of the tourist office in Berlin, told fvw that the tourism ministry is reviewing subsidies for selected charter flights to the country and will launch a new marketing campaign. “We are investing massively to support the important and stable German market,” he said. A new advertising campaign will start as planned at the beginning of December to stimulate demand.

In addition, officials are in talks with German tour operators over the charter flight subsidies that were already extended at the end of October for a further six months. The subsidies are paid on condition that the minimum seat occupancy level is reached and that more flights are operated than in the same month of the previous year. The subsidies vary by airport, with minimum load factors of 40% for Assuan, Luxor and Taba, 50% for Marsa Alam, and 60% for Hurghada and Sharm el-Sheikh. But German tour operators are now concerned that they might not achieve these requirements if bookings weaken in the coming weeks.

Marzouk pointed out that Sharm el-Sheikh is only a small destination for German tourists, in contrast to Russian and British holidaymakers. “Sharm el-Sheikh didn’t play a big role with only seven out of 150 weekly flights from Germany,” he said.

The tourism chief still hopes to reach the target of one million German tourists in Egypt this year despite the latest setbacks. Last year, just over 877,000 Germans travelled to the country. “Advance bookings until the end of December are good,” he pointed out. This was confirmed by TUI Germany’s tourism director Oliver Dörschuck who said: “We have a decline for Egypt at present. But for the winter more bookings are coming in again at short notice.”