All inclusive hotels

[newcastle]

All Inclusive packages are blamed for service quality decline

Karim Mohsen, the head of the Egyptian Tourism Federation (ETF), blamed the all-inclusive packages for the decline of service quality in Egypt recently. He said that the all-inclusive package has been first started in the Mediterranean, Europe, and Turkey, before being implemented in Egypt ten years ago. But it has been implemented randomly since then.

In an interview with Daily News Egypt, Mohsen demanded applying certain criteria on hotels that offer these packages, such as lowering their rating from five stars to four.

There is a committee formed by the Ministry of Tourism to develop a price guide of tourism services in Egypt. What is your take on this?

It is better to leave the issue of prices to the market’s supply and demand. No agency should intervene in imposing prices. This intervention was the reason behind the lack of stability in the tourism market in the past period.

Regarding the quality of service provided at tourism facilities and hotels, I believe that the government should rather put forward strong rules and oversee their implementation.

Another solution is to lower the ratings of hotels that offer all-inclusive packages. This will raise the prices of accommodation in Egypt and improve the quality of service provided, especially with the presence of controls and supervision over the quality.

People have to know that all-inclusive packages are the main reason behind the lack of development in tourism areas in the past 10 years.

Tourists who can have all three meals and drinks at hotels will not walk out of their rooms. This harms taxi drivers and other tourism facility providers. That means that the packages harm the national Egyptian economy in the end. Tourism is an economic activity that provides job opportunities and develops local community.

Did you take part in the committee that developed the indicative prices?

The Egyptian Tourism Federation did not partake in this committee. It was formed from the Egyptian Chamber of Hotels and its public assembly. This is my point of view: I believe that having a price guide in a free market will not fix the problem that the sector has been suffering from over the past few years.

There was a dispute between the Egyptian Tax Authority and the ETF regarding taxes on incentives provided for charter flights. What is the situation in that regard now?

There was a meeting with the Egyptian Tax Authority over the past few days. We agreed to leave the court to rule. I believe that the judiciary will rule in favour of the ETF.

The ETF did not receive any money from these incentives that the charter companies received. The ETF was simply a link to deliver the money to these companies, but our budget did not see one pound of these funds.

We agreed with the Egyptian Tax Authority to separate taxes from the wages of the ETF employees and the taxes related to the charter incentives, which the Egyptian Tax Authority is demanding.

In your opinion, how much are these taxes?

I stress that the ETF did not take one pound of this money, but only delivered them to the charter flights companies. According to the Egyptian Tax Authority, these funds have amounted to EGP 120m since 2010.

We are waiting for the court ruling in this regard. In the past period, based on the Central Auditing Organization’s recommendations, payment of these incentives to foreign and local charter flight companies was decided to be done by the Egyptian Tourism Authority.

Moreover, these dues are paid to the Egyptian airports and are deducted from the cost of landing and takeoff that the companies pay. This was better than the first method.

Since 1 November 2016, the file was handed over to the Egyptian Tourism Authority. The ETF does not have anything to do with that issue now.

During the recent period, the parliament passed a value-added tax law. How do you think it will impact the sector?

We agreed with the Ministry of Finance to exempt the sector from payment of the value-added tax for one season. I believe this indicates that the state supports the tourism sector.

How do you see Egyptian hotel occupancies during the recent period?

From October 2016 until the end of March, occupancy rates have increased in Luxor, Aswan, and Cairo, reaching as high as 100%. This is tangible improvement, compared to the same period last year. This contradicts the modest rates in Hurghada and Sharm El-Sheikh, which remain low due to the continued suspension of British and Russian flights.

If Russian flights to Egypt are not resumed this year, Egypt will only reach a 30% growth in tourism inflows compared to 2016, when the number of tourists reached 5.3 million.

The growth in occupancy rates was not confined to traditional hotels, but also included the floating hotels.

I believe that Egypt is able to attract tourists to its different destinations. We have various products to offer, including beach tourism, archaeological tourism, and safari trips.

Pope Francis is set to visit Egypt next week. How can that be used to promote Egyptian tourism?

The pope’s visit to Egypt is an important event that provides good marketing by itself. The Egyptian Tourism Authority is the best agency to make promote and market Egyptian tourism, supported by its potential and financial resources, as opposed to companies and tour operators whose only pursuit is their private interest.

[newcastle]

The problems caused by all-inclusive resorts is not unique to Egypt.

The Dutch Caribbean island, located 20 miles the north of Venezuela, has become one of the first places in the world to limit all-inclusive deals, which bundle accommodation, food, drinks and entertainment into one price. Regulations that came into effect in August cap all-inclusives at 40 percent of hotel rooms on the island. They currently make up about a third of the country’s 5,500 rooms.

Popularized by chains such as Sandals and Club Med, all-inclusives are one of the fastest-growing segments of the $550 billion hotel industry, and revolutionized tourism in developing countries from Jamaica to Thailand. Tourists gravitate toward such vacations because they’re budget friendly and easy for families reluctant to stray far from beach-side snack bars. Now, Aruba wants tourists to look beyond their resorts, said Otmar Oduber, the nation’s minister of Tourism.

Aruba’s new regulations may help local businesses, but they also pose risks, said Bloomberg Intelligence analyst Margaret Huang in an e-mail.

“With a growing competitive market in parts of Mexico and with the threats of the cruise industry, which is essentially an all-inclusive experience, Aruba may lose its appeal as a competitive tourist destination,” Huang said.

The Caribbean Hotel and Tourism Association, a Florida-based organization that represents hotel owners, said it recommended Aruba take other approaches to enticing tourists to spend their money outside the resorts.

“Several all-inclusive developers, which were considering investments in Aruba, indicated to us that restrictions on the amount of all-inclusive offerings they would be permitted to provide would force them to reconsider their investments,” spokeswoman Adriana Serna said in an e-mail. “Today’s consumers want choices.

[Horus]

Horses for courses I suppose, some people will not venture out of a hotel if they can help it while others enjoy sampling the local ambience. Some destinations are not really very safe for tourists to go wandering around alone and that is why you find many AI hotels in places like Mexico, other places just like to have a captive audience like the Spanish Costa’s. Another factor is how much alternative choice is there for the tourist outside of the hotels to make them want to visit those places and I have to say that some of the best holidays I have had in Egypt is on Nile cruises which by necessity are AI, at least where the food is concerned and some even include your drinks. I have never been disappointed by the food on offer which is more than can be said for many eateries in Egypt and the local booze is similar choose where you drink it.

[MARIO]

I remember when WP went all inclusive. It was a disaster. Maybe work in some lower price hotels. If you were not all incl. at WP and paying so much more it was bound to cause probs.

[Hafiz]

Given where the north coast and Red Sea resorts are maybe there is little choice. Build your tourist developments in the middle of nowhere then I guess you have to provide everything.

Go onto Google maps for five minutes and there seem to be hundreds of k's of strip development - much more than I thought. Spread thin with little in the land behind other than the occasional worker/slave compound.

However its a great way to make sure that the tourist money ends up in few pockets.

As an aside there must be no country on earth where so much public beachside has been transferred to private interests for their exclusive use. Wonder what the developers paid for these private beaches - and to whom?

[newcastle]

Given where the north coast and Red Sea resorts are maybe there is little choice. Build your tourist developments in the middle of nowhere then I guess you have to provide everything.

Go onto Google maps for five minutes and there seem to be hundreds of k's of strip development - much more than I thought. Spread thin with little in the land behind other than the occasional worker/slave compound.

However its a great way to make sure that the tourist money ends up in few pockets.

As an aside there must be no country on earth where so much public beachside has been transferred to private interests for their exclusive use. Wonder what the developers paid for these private beaches - and to whom?

I don't know much about the North Coast but the Hurghada Area and Sharm are replete with bars and restaurants who must struggle in the face of all-inclusive resorts.

As you say...the resorts have also grabbed most of the coast line and what little is left is usually let to private operators who (certainly in the case of Hurghada) charge handsomely for access to a grubby beach, over-priced & inedible food and filthy toilets.

[Bombay]

All Inclusive is not a product led by the hotels its led by the tour companies like TUI,Thomas Cook etc its a product they want to sell as its very popular especially with families.