When Egyptian tour guides on camel and horseback charged at the crowds in Cairo’s Tahrir Square on 2 February, many believed Mubarak had paid them to do so. The men said that they were just fed up of the protests harming their livelihoods by driving away tourists.

Whatever the reason behind the dramatic scenes, there is no denying the impact the 2011 Arab popular uprisings have had on the tourism industry in Egypt, Tunisia and the wider region. More than 200,000 tourists fled Egypt in the final days of January when the protests first began. According to the state statistics bureau, this cost the country $178m in lost revenue, and, with cancellations of travel plans in February, a further $825m is estimated to have been lost.

Economic contribution from tourism

As in Tunisia, tourism is one of the biggest contributors to the Egyptian economy. International tourism revenues account for 6 per cent of gross domestic product (GDP), and, when considering the sector as a whole, the figure reaches 11 per cent. Tourism receipts are double the amount Egypt earns from the Suez Canal.

…The protests shed light on Egypt like never before and it acted like the most effective media campaign

Amani el-Torgoman, Travco Travel

According to the Madrid-based UN World Tourism Organisation (UNWTO), Egypt received about 14 million international visitors in 2010, generating about $12.5bn. This makes tourism the largest source of revenue for the country after expatriate remittances. The figure for 2011 is likely to be considerably lower, with hospitality industry tracker STR Global reporting hotel occupancy falling below 17 per cent in some Cairo hotels during February.

US and UK Mena travel warnings*

Bahrain Both governments advise against all but essential travel

Egypt The UK has no travel warning for Egypt. The US says defer non-essential travel

Libya Both governments advise against all travel

Tunisia The UK has no travel warning for Tunisia. The US says to defer non-essential travel to the central, western, and southern regions of the country

Yemen Both governments advise against all travel

*=At March 2011. Sources: UK Foreign & Commonwealth Office; US State Department

Despite Upper Egypt largely being unaffected by the uprising, the heart of Ancient Egypt has still been impacted. The Valley of the Kings in Luxor, which usually attracts 10,000 visitors a day, is now all but deserted, after tour companies cancelled trips to the country in line with international travel advisories. The Red Sea resort of Sharm el-Sheikh has also seen a drop-off in business.

In Tunisia, where the wave of angry protests sweeping the region first began, analysts say international arrivals will fall to less than 5 million in 2011, from nearly 7 million in 2010. This is a significant decline in a country where tourism generates $3bn in revenues, or about 10 per cent of GDP. Although official figures have yet to be released, occupancy rates at some hotels in Tunisia have been reported at about 20 per cent for January.

The political turmoil has impacted other key markets in the region, with travellers now more wary of visiting the Middle East and North Africa (Mena) region as a whole. “These uprisings bring a lot of uncertainty and that is never good for organised travel,” says John Kester, manager of the tourism trends and marketing strategies programme at the UNWTO. “There are many other places to visit in the short term and people would rather avoid conflict zones.”

Visitor numbers are reported to have fallen in Oman and Jordan, despite demonstrations in those countries being fairly muted. Jordan’s Petra Development and Tourism Region Authority says the number of visitors to the ancient city dropped 26 per cent year-on-year in February. Elsewhere, a violent crackdown on protestors in Bahrain resulted in the Formula 1 Grand Prix scheduled to be held over the weekend of 11-13 March being postponed the until the end of the racing season in September.

The financial cost of delaying the event has been estimated at $600m. The postponement will have also caused lost revenue for local businesses, such as hotels and restaurants, as well as for the struggling national flag carrier, Gulf Air.

Intraregional travel has also been hit. Saudi Arabia’s National committee for Hajj and Umrah at the Makkah Chamber of Commerce and Industry has said the kingdom has received few Umrah pilgrims from Egypt, Libya and Algeria in recent weeks. Hotel occupancy in Mecca was 100 per cent in the first quarter of 2010, but it is unlikely to exceed 75 per cent this year. Again, this will have a knock-on effect on the retail, transport and accommodation sectors.

Tourism a key employer

The sharp decline in visitor numbers is a concern for the region, not just for the lost revenue travellers bring into the country. The sector is also a major direct and indirect employer in the Mena region. With a lack of jobs one of the key complaints fuelling the protests in the Arab world, any significant and sustained disruption to the tourism industry could have severe consequences. One in eight workers in Egypt depends on the sector for employment.

Across North Africa as a whole, the travel and tourism sector directly supports 3 million jobs, according the London-based World Travel & Tourism Council. In the Middle East, the sector provides 1.8 million jobs.

“The countries realise the stakes are quite high and they need to do everything to confirm to people that it is a safe place to visit,” says Kester. “The people of Egypt understood the importance when they created a human shield around the Egyptian Museum to prevent looters.”

While there have been some obvious losers, other countries in the region are benefiting from the upheaval as tourists divert to those destinations.

Spill-over effect from political unrest

UAE-based holding company Al-Futtaim Group has a significant presence in Cairo and at the height of unrest there it re-accommodated tourists in the UAE. “It was difficult to find places for them to stay, it took us a few weeks since everywhere was occupied in Dubai,” says William Horsely, general manager of Al-Futtaim Group’s travel division.

Dubai, in particular, stands to benefit from the political turmoil elsewhere in the region. The emirate has a well-established tourism sector and a strong international reputation as a luxury destination. As a bastion of calm in an otherwise chaotic region, for those in search of winter sun, it represents a risk-free holiday.

Dubai’s tourism sector has endured a difficult few years in the wake of the global financial crisis, with occupancy rates and revenues coming under intense pressure. Hoteliers have had to slash room rates to win custom in an increasingly oversaturated market. But the spill-over effect from other travel markets in the Middle East could accelerate the recovery in Dubai’s tourism industry.

“We cannot guarantee it is a direct result of the uprisings, but our revenues have increased by 15 per cent this month when compared with last year,” says Sam Eltibi, executive director of Mena and Asia Pacific office of car rental firm US-based Dollar Thrifty Automotive Group. “We have seen very healthy growth, similar to numbers before the financial crisis.”

But scenes of protesters clashing with security forces across the Arab world means other governments wishing to establish their countries as tourism destinations will have to work that much harder on their branding. Fledgling tourism sectors in Qatar and Abu Dhabi will need to undertake high-profile marketing campaigns to disassociate themselves from upheaval in neighbouring Bahrain.

In the longer term, however, the collapse of authoritarian regimes in the region should act as a boost to the tourism industry. If the regimes are replaced by democratic or more liberal governments, they could well loosen visa regulations, enabling greater freedom of movement between the Arab countries and encourage more international and inter-regional tourism.

“We are very optimistic, even though the situation is currently messy,” says Eltibi.

Libya could emerge as a significant tourism destination. With its strict visa regime, the country has long been closed off to most travellers, but its unspoilt deserts, expansive coastline and archaeological sights have much to offer tourists. Some analysts say all the countries that have been at the centre of the popular uprisings could benefit from the increased media exposure.

“We feel the protests shed light on Egypt like never before and it acted like the most effective media campaign,” says Amani el-Torgoman, general manager and director of tourism operations, Travco Travel. Places such as Cairo’s Tahrir Square, Bahrain’s Pearl Roundabout, Sidi Bouzid in Tunisia and Benghazi in Libya have become part of modern-day history and could become tourist destinations in their own right.

In recent years, the Mena region has been one of the most active areas for hotel construction. With a positive long-term outlook for the sector, current unrest is unlikely to affect investment.

The next few months will be challenging for the region’s tourism sector and revenue targets for the year could be missed due to the events of recent weeks. But the region has always been considered a more daring destination for travellers, and, despite suffering many terrorist attacks over the years, has always proven resilient. With travel warnings already being lifted for some of the countries that had uprisings, the recovery could soon be under way.