Goldman Sachs: The return of Russian tourism adds $ 3 billion to Egypt

Goldman Sachs International, in a report, said that the resumption of direct Russian flights to tourist destinations in the Red Sea is a major boost to the prospects for recovery for the tourism sector in Egypt, which has been affected by the Coronavirus pandemic.

This comes after the Egyptian Presidents Abdel Fattah El-Sisi and the Russian President Vladimir Putin agreed, during a phone call, to resume full air traffic between the two countries’ airports, including Hurghada and Sharm el-Sheikh, according to a statement from the Presidency of the Republic last Friday.

Russia stopped direct flights to Egypt in October 2015 after a Russian airliner fell in the Sinai shortly after it took off from Sharm el-Sheikh airport, which led to the death of 224 people on board.

Goldman Sachs said that at the height of Egypt’s tourism boom in 2014, Russian tourists accounted for a third of all inbound tourists to Egypt, but that number has decreased dramatically since the ban on direct flights was imposed.

It stated that in 2014, the number of Russian tourists arriving in Egypt exceeded 3.1 million, but it has decreased to an average of 100,000 tourists per year, since the Metrojet plane accident in 2015.

Goldman Sachs added that it believes that the return of Russian tourism activity to pre-2015 levels could boost tourism revenues in Egypt by more than $ 3 billion annually (about 0.75% of GDP), and this is likely to happen gradually due to the continuing epidemic. Global.

And during the ten years preceding the Russian plane accident, Russian tourism to Egypt was growing at a rapid pace, and reached its peak in 2014, with the entry of more than 3.1 million Russian tourists, which represented about a third of the total number of tourists coming to Egypt that year.

She explained that in the aftermath of the accident, the number of tourists from Russia has decreased dramatically, and the rates have not recovered since then, and the main reason for this is due to the Russian Federation imposing a ban on all direct flights to Egypt, pending a review and amendment of airport safety procedures.

The Foundation stated that over the past three years, the average income of each tourist in Egypt has exceeded $ 1,000, and therefore, the possibility of Russian tourism returning to pre-2015 levels, which exceeded 3 million tourists annually, means strengthening the current account by about $ 3 billion annually (about 0.75% of GDP).

She said that this return also gives the prospects for GDP growth a good boost, given that the economy is heavily dependent on the tourism industry, which represents one out of every seven jobs in the Egyptian economy, according to data from the State Information Service in Egypt.

But Goldman Sachs indicated that there is relative uncertainty regarding the timing of the resumption of Russian tourism, as it is likely to be related to developments in the global epidemic, including the success of vaccinations and vaccine production in Russia and Egypt.
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