Egypt wants to roughly double its tourism earnings to as much as 40 billion dollars a year. That cannot come from crowds alone, because it means winning the world’s highest spending travelers while Saudi Arabia courts the same guests. Dr. Mohamed Kaoud, Founder and CEO of Egyliere, shares what he saw on a recent visit to Japan and why Saudi Arabia is both a competitor and a partner for Egypt. He also gives a candid view on whether the target is credible, how the regional conflict is changing travel plans, and what is holding back the premium market today.
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Can Egypt Win the Luxury Traveler and Double Its Tourism Earnings
You were recently in Osaka meeting Japanese travel partners. Is Asia's luxury traveler a real revenue line for Egypt in the next two years, or still a promise?
After my visit, I would say the market has very high potential. China can provide big volume, and Japan in general could be a very high quality level of traveler. The visit came after the minister's visit, and before that we had the Ramses Exhibition in Tokyo, which brought a lot of attention to culture and heritage. They adore it and they are keen to grow travel in the heritage segment. The minister is opening doors, and then it is the private sector's role to work through them with the right product, to build trust with this traveler and meet their needs. We have a lot to do in terms of product and gaining the trust of the agent market to come to this region.
Your company operates in both Egypt and Saudi Arabia, and Riyadh is pouring billions into destinations aimed at the same clients. Is Saudi Egypt's biggest competitor or its best partner for a two country trip?
Both. Saudi is a competitor on the beach side, and at the same time a strong partner when you are selling culture and heritage. When you sell the pilgrimage in Saudi together with Islamic Cairo for the Malaysian and Indonesian markets, there is very high potential. You combine Umrah and places in Saudi with Luxor and Aswan in Egypt, and you see synergies. The bond between Egypt and Saudi is very strong, and for some years Saudi used to be the number one market for arrivals to Egypt. When you look at ultra high net worth individuals, they do not think about borders. They do not see Saudi and Egypt, they see a trip to the region. Whoever manages to make seamless packages and create different experiences at the high end will win the deal. That is why we expanded into both. We are selling the region, not the country, and I see very high potential from different international markets, including the US, Europe and Southeast Asia.
Some clients are dropping Jordan or Saudi from multi country trips because of the regional conflict but keeping Egypt. Are you seeing that, and is it a lasting edge?
It is very challenging at the moment, and our region has definitely been affected, though at different levels. Egypt has been the least affected compared with Jordan and Saudi, but all of them have been affected, and the UAE as well. We need a different strategy for the time being to absorb the shocks. As the private sector, we are extending the client's stay, selling Egypt as a destination in a different way and encouraging them to stay longer with more experiences in the itinerary. A day or two more is better for the company and for the country, and it will generate billions of dollars. I do not think the conflict will last long, because it is not only affecting the Middle East. It has a direct effect in Europe, and now it is being extended to China. I believe that in the next weeks to few months there will be a strategy to absorb and contain this conflict or make it end.
The tourism authority targets up to 40 billion dollars a year, roughly double today. Arrivals will not double. How much of the gap can premium travel close, and is the target credible?
The premium traveler will close a large part of it. Between the upscale and the upper upscale segments, which are the vast majority of the hotels in the pipeline, together with the complementary services, that is where the biggest gap will be closed. But Egypt has achieved around 18 billion dollars in revenue, probably 18 to 19 billion by the end of the year, so doubling is very optimistic. Egypt is trying to build around 200,000 rooms and aims for 40 million visitors, which means an average of 130 to 140 dollars per room per night, quite a bit higher than the current 110 to 112. That is a 20% increase in average daily rate in dollar terms, which for me is quite high. And to get there, visitor spending has to rise by almost 40%, which is a very optimistic target. We can definitely close the gap, but probably to the early 30s billions rather than 40. To do that, length of stay must increase, we need scarcity of experience, the right product at the right price and more experiences.
You have long argued for opening up aviation beyond Cairo. What is the one bottleneck costing Egypt the most premium business today?
There is a primary bottleneck and secondary ones. The primary one at the moment is seats. Most of the other primary bottlenecks, in infrastructure and the number of hotel rooms and serviced apartments, are being handled, apart from seats. We need to look deeply at connecting directly from our different airports to multiple destinations, whether regular or new markets Egypt is penetrating. The secondary bottlenecks are capitalising on talent, on openness in air slots, and on the level of service, creating experiences, and being flexible in granting licences so people can come and invest easily in Egypt.