The tourism sector might be the most business sector that has been heavily affected by Covid 19 crisis. MEO, reporter Amira Elhamy, had the pleasure to interview, Nannys Samy Hwaidak, Managing Partner of Jasmine Palace resort in Hurghada, to discuss the impact of Covid 19 crisis over the tourism sector, and the recovery plan implemented by the government and the private sector to set the Egyptian tourism sector back on track!
- Being in the tourism sector, please tell us how Covid 19, affected your business?
Well, there is no doubt that this worldwide critical crisis has greatly affected the tourism sector, whether in Egypt, or in various countries around the world. All hotels, around the world has been asked to close down to minimize the risk of Covid 19 infection! And this is actually what the Egyptian government asked us to do; we had to close down and abide by a 14 days of quarantine for all employees and workers inside the hotel, after the departure of the last tourist!. This for sure was not an easy step to do.
2. Please tell us how your hotel business survived the pandemic crisis?
To survive the crisis, we had to strictly follow an emergency plan. First of all, any hotel, has its ongoing expenses, whether you have occupancy in the hotel or not! For instance, we pay water expenses, electricity expenses, pools maintenance, gardens maintenance, food expenses for the employees during the quarantine and much more! Those expenses had to be maintained during the quarantine and the closing down, for sure this was a big challenge, but we successfully overcame it.
As well, we had to do an inventory, for all the hotel items, including all hotel assets and machinery, to minimize any risk of losing any assets and following the closing down phase we had to do another inventory to make sure that all items were well kept. Paying the salaries of the hotel employees was sure another challenge during the closing down. As well, the salaries of the employees include the basic salary and the service charge; the service charge part fluctuate according to hotel occupancy and hotel revenues, and this was actually affected during the closing down. We did stick to paying the basic salaries, however we had to minimize the service charge, in order to survive the closing down period.
As well, we followed a contingency plan, in order to help us minimizing hotel costs, and one of the hotel departments that usually take a big bulk is the food court! So we also had to minimize the cost of the food court during the quarantine phase and the closing down.
3- To what extent your business was affected by Covid 19 pandemic?
Well the hotel business, is actually selling a luxurious service, it is not actually a basic service ! It is an additional luxurious one, so these kind of services tend to be the first and the most affected during a crisis or force majeure. So I can say that it was greatly affected. Another important point to mention is that during the Covid pandemic, your tourism business actually is depending not only on the situation of your country, but on the situation of other countries as well; so if Egypt has low infection rate, but other European countries, who usually come for vacation, whether in the red sea or Cairo, has high infection rate, the tourism sector, would still suffer many loses, which make the situation more complicated, comparing other business sectors; in other words, for the sector to flourish following the pandemic, you need to have a recovered local market as well as a recovered international market.
4. Please tell us about your recent experience following the opening up of the hotel business, as well do you see that the internal tourism did help to flourish the tourism sector following the 4 months closing down?
Well, let me clarify first that usually hosting locals tourists, get higher revenues comparing to international ones! So for sure internal tourism is important, and with the charter fights not getting back yet to the red sea, the local/internal tourism market, did help to freshen up the situation within the sector.
As well, we were lucky with the timing, when the government allowed the hotels to receive guests, schools were over and Egyptians were ready to go off for their yearly vacation!
As well, usually the hotels set high rates for Egyptians comparing to international tourists, but let me explain it more.
With Egyptian or local tourists, the hotel pays more maintenance due to the damage caused by local tourists; they heavily uses the hotel facilities, sometimes in a really bad way! so automatically the bulk of money allocated for maintenance raises! As well food waste, is higher with local tourists! Unfortunately, the rate of depreciation of the hotel rises up during the presence of local tourists! As well the consumption of local/Egyptian tourists is really high!
Another important point to keep it in mind related to the rate of international tourists, the hotel is not actually in full control in setting the rate for international tourists; the hotel actually signs many contracts with various tour operators to get large groups of international tourists and raise the hotel occupancy all year round. So the hotel is not actually in full control in setting the rate for international guests! and with the high competition between the hotels in the red sea, the situation is even tougher.
5. How would you evaluate, the safety measures implemented by the Egyptian government to get the tourism sector back on track?!
In fact, the Egyptian government did a great job during this crisis; first the government did a tax exemption for the hotels, and this was actually a significant step to be taken as it did facilitate really for the business owner to pay his other financial obligations during the close down.
As well, the government facilitated for us the monthly payment of electricity expenses which helped us a lot!
Also, the government allocated a good sum of money, given on installments, from the emergency fund to each hotel to help business owners in paying the employees’ salaries, as we were prohibited from laying off employees during the close down.
As well prior to opening up, the government gave each hotel, a protocol to follow to ensure containment of Covid 19, whether with local tourists or international ones; a comprehensive protocol that explains how to deal with the guest, since he enters the hotels until he departs, to maximize safety health measures, As well, a committee from the health minister and the tourism minster did visit the hotel to ensure a strict implementation of the protocol as well as ensuring the allocation a good space for quarantine in case Covid 19 cases was detected.
6. Please tell us your forecasts regarding the upcoming tourism seasons? Well it is difficult to predict a forecast; sure it all depends on the number of infections, whether in Egypt or in countries, we receive tourists from. However, we have this have this piece of info, exclusively to MEO, starting September, hotels will be hosting British tourists; and already Ukrainian, and Swiss tourists are back. Polish tourists and German are excepted soon! Sure this all depends on our Egyptian government decisions. In other words, if our government requires a PCR test for tourists to submit this might slightly lessen the number of tourists coming, as some might want to avoid the hassle of medical tests.
