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CIR

Egypt and Tunisia set for a reboot as travellers return

After a period in the wilderness, both Egypt and Tunisia are expected to gain back some of their lost tourist traffic in the coming six months according to exclusive analysis from Business Lounge from Counter Intelligence Retail.

Looking at the latest PAX data for Q3 2017, Egypt in particular achieved strong growth (+13.4%), spurred by +20.1% growth in August, with its top four airports handling an additional 810,000 passengers over the three-month period versus 2016.

While total PAX slipped slightly at Cairo (-0.5%) – Africa’s second busiest airport after Johannesburg OR Tambo – and Alexandria (-6.0%), from a duty free and travel retail perspective, tourism has made a welcome return elsewhere. The airports at the resort towns of Hurghada and Sharm el-Sheikh saw strong YOY increases at +84.6% and +55.0% respectively.

Garry Stasiulevicuis, Founder and President of CiR, comments: “While these bounces look big, they obviously come on the back of a very weak period for air traffic. Nevertheless, they show that tourists are returning to the Red Sea which is good news for duty free operators at both airport as well as the entire resort industry.”  

A rosy six months ahead

The outlook for Egypt, as well as Tunisia – another major holiday destination for Europeans – remains positive says CiR. Seats into Egypt are forecast to be up +8.0% in the next six months (November 2017-April 2018), with capacity from Europe currently at +29.1%, Asia Pacific +8.2% and Americas +27.0%.

The biggest improvements in capacity to Egypt is from Germany (+39.7%), UK (+20.9%), and Italy (+20.9%). “Also, very good news for duty free operators is that seats from China – typically safety-conscious travellers – are also back up at +2.2% based on our Business Lounge data,” says Stasiulevicuis. Seats from China make up two-thirds of inbound capacity from APAC (although only 1% of the global total) to Egypt and is therefore a significant segment.

The market is flatter for intra-regional seats from the Middle East & Africa to Egypt (+0.5%), However, much of that is due to a lack of flights to and from Doha versus the same period last year while Qatar remains closed off from many states in the region, including Egypt, as a result of an ongoing boycott by certain Arab states.

Meanwhile, international seats into Tunisia are forecast to be up +9.0% in six months from November 2017-March 2018, driven by +12.9% growth at the country’s top international airport, Tunis Carthage. Capacity growth into Tunisia from Europe is particularly promising at +10.4%, with key Western European markets such as France up +14.6% and Germany up +34.1%.

North African outlook

“North Africa is the lifeblood of the African aviation industry, accounting for almost half of the international seats departing the continent in 2017,” comments Stasiulevicuis. “The region has struggled in recent years as a result well-publicised terrorist activity, such as the 2015 Sousse beach attack in Tunisia and the bombing of a Russian passenger plane travelling from Saint Petersburg to Sharm el-Sheikh in the same year.

“But as reported earlier this year, conditions in the affected countries have been improving and safety fears appear to be subsiding offering a lifeline for the beleaguered tourism and duty free businesses across the region.”

However, Stasiulevicuis cautions that the outlook – for Egypt in particular – might change. “The recent massacre at the Sufi mosque in northern Sinai could affect the recovery,” he says. “Even though this brutal attack was far away from any tourist areas, it may impact traveller sentiment and we will be updating our Business Lounge forecasts as we receive new data.”

For North Africa as a whole, annual capacity on flights departing the region’s airports is currently up +5% for 2017, with a further +8% increase expected in the first four months of 2018.

For further information, please contact Simon Best, Business Lounge Director: Simon@counterintelligenceretail.com