Burning accommodation prices in hotels adversely affect Egypt’s reputation abroad: Chairman tourism Committee at EBA

24 Jan 2018

According to the chairman of the Tourism Committee at the Egyptian Businessmen Association (EBA) Ahmed Balbaa, there are direct and indirect serious damage to the state, investors ,and workers because of the spread of the phenomenon of burning prices of hotel services during the recent period.

Balbaa demanded the protection of competition and the prevention of monopolistic practices to reconsider this phenomenon to avoid future problems if it happens at these current prices.

He pointed out that there is damage to the state due to the low flow of foreign currency, as well as the weak return of the investment of the state on the implementation of tourist cities and facilities and lower tax revenues.

Balbaa says that the collapse of the hotel service affects Egypt’s tourism reputation, as well as dispensing with many of the workers to reduce expenses and thus increase unemployment from the other side.

The burning of prices for hotel services to increase problems and issues with the sovereigns and other parties dealing with projects for the inability to pay in light of the decline in prices and income, according to the Chairman of the Tourism Committee of the EBA.

He pointed out that the phenomenon leads to the destruction of fixed assets of tourism projects and resorts to the inability to renew and maintenance necessary.

He believes that Egypt, due to attracting a modest tourist spending, it caused damages to the handicraft industries.

“Because we attract the tourist with a low expenditure to Egypt as a result of low prices and the absence of tourists with moderate and high spending,” said Balbaa.

He explains that no one buys these products and thus the collapse of the handicrafts that are famous for Egypt and the increase in unemployment of those workers and sellers bazaars from the other side.

He cautioningly warns that the failure to deal with the phenomenon led to a decrease in income for workers as a result of the low rate of 12% for service.

He warned that there is a complete collapse of the 3-star hotels as prices for 5-star hotels are up to $20 and then four stars to $14 per day.

He said that it is up to $7-8 for hotels in the category of three stars and with the calculation of the cost of operation and a discount of 13% sales tax and 12% service ratio and 1% insurance and other operating costs, this leads to a loss that leads to the collapse of this level of hotels.

In the letter sent to Daily News Egypt it is mentioned that the damage does not stop only in the handicraft industries or in the hotels, but will extend to all sectors of industries, agriculture, and sectors that depend on tourists in their income from, and more than 72 types such as food, textile, wood, and metal industries.

He added that hotels suffer from the difficulty in repaying bank debt for projects borrowed by foreign currency of the Egyptian pound float with the low income from foreign currencies to reduce the movement of tourism.

He pointed out that these loans, despite the conditions experienced by the sector has become burdened with high interest rates close to 20% and do not achieve revenues and profits generated by operating to lower prices and total income of projects.

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