Egypt's Eid El-Fitr and Tourism: A Celebration Amid Economic Turbulence
Beyond Eid El-Fitr cultural significance, this festive season greatly impacts the Egyptian economy, particularly tourism. The extended public holiday triggers a surge in travel to popular local destinations. However, economic challenges and the devaluation of the Egyptian pound are reshaping domestic travel in Egypt.
Yet, Egypt's tourism sector is adapting to these dynamics through targeted campaigns and the country’s appeal to regional and international tourists. This evolving landscape underscores the interplay between economic conditions and tourism trends, highlighting both challenges and opportunities for Egypt during this festive season.
Impact on Domestic Tourism
The Eid El-Fitr holiday has traditionally been a peak season for domestic travel in Egypt, with families traveling for leisure and reunions. However, economic headwinds have noticeably impacted Egyptian families’ engagement in domestic tourism in recent years.
Ibrahim Hamdy Sheta, holder of PhD in Applied Economics from Western Michigan University, USA and Assistant Professor of Economics at Faculty of Commerce, Mansoura University, and College of Business Administration, Taibah University in Saudi Arabia, explains: "The continuous devaluation of the Egyptian pound against the US dollar since November 2016 has resulted in a persistent inflation and high unemployment (stagflation), leading tohigher poverty rate and eroding the middle class.”
“Rising costs of essentials such as food, healthcare, education, transportation, housing, etc. have left little room for leisure spending. As a result, domestic tourism, especially to middle-class destinations like Ras El Bar, Damietta, Port Said, and Alexandria, has declined during national and religious holidays such as Eid El-Fitr, Eid El-Adha, and Sham El-Nessim,” Sheta notes.
This highlights a crucial link between macroeconomic factors and household spending patterns. Inflationary pressures and currency fluctuations have prioritized essential expenditures, leaving less disposable income for discretionary activities like domestic travel during Eid.
Sheta further points out that in previous years, remittances by Egyptians working abroad used to partially compensate for this decrease in spending on domestic tourism. However, now, the Central Bank of Egypt (CBE) is actually applying the managed floating exchange rate policy, which sets the dollar at around EGP 50, while the inflation rate continues to rise.
“Therefore, Egyptians working abroad have been struggling with inflation, just like those at home. Given all of these analytical facts and results, this has led to a significant decrease in spending on domestic tourism, not just during holidays, but throughout the year,” he says.
"As remittances lose their ability to cushion economic hardship, the tourism sector faces further strain, especially in key holiday seasons like Eid El-Fitr. Consequently, while some segments of the population may still partake in Eid travel, the overall volume and spending on domestic tourism during this time are likely to be considerably lower than in pre-economic turbulence eras,” Sheta adds.