Russia lost 224 people but Egypt stands to lose billions in Russian tourism dollars as deserting holiday makers leave Egyptian resorts abandoned
Originally appeared at Forbes
Sharm el-Sheikh is Russia’s Caribbean. But after the Oct. 31 downing of MetroJet, a domestic carrier that exploded over the Sinai Peninsula, Russia has banned flights in and out of the country and the tourist industry that drives that part of Egypt is in big trouble. This is the time of year when Russians want to escape the cold. They won’t be going to Sinai anytime soon.
British Airways also halted flights in and out of el-Sheikh because of the mysterious explosion that occurred within 29 minutes of the MetroJet’s return flight to St. Petersburgh.
International media in Egypt have been reporting on the tourist hot spot, saying thousands have been put on leave in the last two weeks. Roughly 80,000 people in the area work in the travel and tourism industry, which is equal to the city’s entire population.
“I have been told not to come from tomorrow,” one luxury hotel employee named Ahmed told Agence France-Presse. “I’ll be called if the situation improves. Nothing is clear.”
“On a normal basis we would be 90% full right now, everyone would be working and everyone would be happy,” Amr Darwish, an owner of the Terrazzina beach club, told the BBC.
According to the South Sinai chamber of tourism, roughly 50% of the industry’s labor force could be laid off within the next two months unless the Russians return. Flight embargoes are reportedly costing Egypt approximately $280 million a month.Egypt’s tourism industry has been battling civil unrest at least until the 1990s, when ancient tomb site Deir el-Bahari in Luxor was attacked by Islamic terrorists.
The service sector accounts for more than half of Egypt’s economy. That attack cut Egypt’s tourist revenue in half to around $4 billion in 1997.
The Arab Spring and coup’s have also hurt Egypt, a country which is home to some of the most attractive global tourist real estate around. Last year’s tourist numbers, based on visitors, dropped by nearly 30% from 2013, a year that saw the biggest drop in percentage terms because of political violence. Only 9.5 million tourists traveled to Egypt, down fro 11.4 million in 2012 and 14 million in 2010, according to government statistics from Central Agency for Public Mobilization and Statistics.
Western media have blamed ISIS for the MetroJet explosion, citing their own country’s intelligence agencies. Egyptian investigators have not said what caused the crash. The flight blew up before reaching cruising altitude, killing 217 passengers and seven crew members.