The opportunity for e-commerce in Egypt's tourism sector

It’s no secret that the payment card industry has experienced great strides in innovation in recent years. The advent of mobile banking and growth of e-commerce are just two of the most widely publicized and utilized developments worldwide and Egypt is no exception.

Greater connectivity and internet usage are helping fuel the trend and e-commerce in Egypt is increasingly gaining ground due to the improving internet infrastructures. Based on recent data published by, the Egyptian Ministry of Communications and Information Technology (MCIT), internet penetration in Egypt was over 30 percent of the total population as of January 2011 and is expected to grow by 39.61 percent annually.

Clearly, e-commerce transactions worldwide are becoming more popular as consumers and merchants alike realize the numerous benefits they bring. E-commerce helps merchants increase sales, decrease costs and hence raise their profit margins. Moreover, it helps them expand the size of their market across borders. On the other hand, cardholders can enjoy the safety, convenience and speed while shopping online with their Visa cards and take advantage of a wider range of shopping offers and discounts.

With over 23 million internet users in Egypt, the potential to grow e-commerce is enormous. To highlight the sheer growth of e-commerce, during the peak season last year, e-commerce represented 20 percent of Visa’s payment volume in the US. Globally, year-on-year growth is estimated at nearly 20 percent for the next two years.

One important means to grow e-commerce in Egypt, and by proxy the national economy, is through the travel and tourism industry. According to the Euromonitor International Country Briefing for Egypt 2010, around 12.7 million tourists visited Egypt, spending LE 57.9 billion, which constituted for over 11 percent of the country’s GDP last year.

Annual growth in terms of number of arrivals was initially forecast to reach more than 9 percent over the 2010-2015 period, bringing the total number of arrivals close to 20 million. With the recent events in Egypt, Euromonitor International has revised its forecast down to a 2 percent CAGR, taking total arrivals to 14 million for the same period. The speedy return of growth is likely to resume after 2011, with annual growth nearing 10 percent in the coming five years as demand for regional travel bounces back due to stronger and more solid economies.

Information technology, specifically the internet, has fundamentally re-shaped the way tourism-related information is distributed and, therefore, the way it is accessed, and how people book and pay for it all over the world. A survey conducted in the US showed that in 2009, 79 percent of online travelers (adult internet users who travel regularly) book their travel plans online as compared to 73 percent in 2007. The continued rise in internet savvy consumers will help drive the number of travelers choosing to make their travel arrangements online.