With an act of terrorism still to be confirmed in connection with the sudden disappearance of an Egyptair A320 passenger jet from Paris Charles de Gaulle airport to Cairo yesterday, Egypt is braced for further declines in its already troubled tourism sector.

Flight MS804 had just entered Egyptian airspace before vanishing from radar screens and this morning the Egyptian Ministry of Foreign Affairs has confirmed that wreckage has been found near Karpathos Island. Egyptair has confirmed the plane was carrying 30 Egyptian nationals along with citizens from 11 other countries, including Canada, France, UK, Belgium and Iraq.

If this is another terror outrage, it will add to a string of high-profile events that have destabilised the country. Egypt was subject to a popular uprising in 2011 when President Mubarak was ousted, an effective military coup in 2013 which removed democratically-elected President Mohamed Morsi, and last October, a Russian Metrojet flight crashed [also thought to be a terrorist attack] killing all on board. Other less widely-reported incidents have also taken place in recent times.

Tourism is core to the Egyptian economy which, in its heyday pre-2011, employed 10-12% of the workforce and generated visitor exports of EGP75.3m/$8.3m (source: WTTC).

However while tourist numbers reached almost14.7m in 2010 – greatly boosting the country’s duty free and travel retail business – by 2013 numbers were down to under 10m and climbed to 10.2m in 2014.

FURTHER SECURITY CONCERNS

Kinda Chebib, Senior Analyst at consumer research house Euromonitor International, comments: “The series of terrorist events hitting Egypt since 2015 raises further concerns about security at airports in the country and is very likely to deter tourists to go to this part the world.

“If we analyse tourist’s performance prior to the political unrest in 2011 and recurring attacks by jihadist militants, arrivals from key markets plummeted in 2011 and gradually started to recover until 2015. But those (numbers) never achieved the prior performance.

“Egypt can restore its image when it comes to specific, location-limited events, but when we speak of big security breaches… there is no doubt that it will take a while for Egypt’s tourism and economy to get back on its feet. We can therefore speak of an impact on the mid- to long-term.”

Egypt’s own target of 20m foreign tourist arrivals by 2020 looks somewhat ambitious at this stage, but did so even prior to the event yesterday.

Russia is the biggest source market for Egypt with nearly 3m arrivals recorded in 2014, followed by the UK with 1m arrivals. Prior to the Metrojet crash, Russia was also the fastest-growing source market for Egypt in 2014, registering +18% growth in 2013-2014.

However Chebib warns: “Travellers are likely to remain very hesitant to travel to this part of the Middle East and will opt for destinations like the Gulf countries or, in North Africa, they are likely to choose Morocco, contrasting with more vulnerable destinations like Tunisia and Egypt.” The northern Mediterranean (Spain, Italy and Greece) is also expected to be a beneficiary.