Tourists and Terrorists

Terrorists strike. Tourists change destinations.

That was the story that unfolded following the October 31, 2015 downing of a Russian airplane carrying 224 tourists and crew after it left Sharm el-Sheikh Egypt. At the time of the downing, about 80,000 Russian tourists were in Egypt. Russia banned future flights in and out of Egypt, effectively cutting off a flow of Russian tourists to Egypt that the Associated Press reported totaled three million in 2014, one-third of all visitors to Egypt.

Russia’s statistics bureau Rosstat says that Egypt was the destination of 20 percent of all Russians traveling abroad in the first half of 2015. A week after the downing the Euro News reported that most people due to visit Egypt in the following days had agreed instead to fly to Turkey, a country visited by 2.5 million Russians in 2014.

Then a Russian jet on bombing missions against opponents of Syrian President Bashar al-Assad was shot down by Turkish F-16s, when Turkey determined that the jet had violated its airspace and ignored warnings to retreat. Russia had sent 3.3 million tourists to Turkey from January through September, making it the most popular destination for Russian travelers. Russia effectively banned tourist travel to Turkey.

The World Bank reported Turkey’s 2013 international tourism receipts at $34.9 billion, and 2013 GDP of $823 billion. At 4.24 percent of GDP, a major hit to Turkey’s tourism industry will most assuredly be a significant setback for any prospects of GDP growth going forward.

According to Bloomberg Business, “Tourism accounted for $21 billion of income for Turkey for the nine months to September and plays a key role in keeping the sizable gap in the current-account under control.” Geopolitical tensions were impacting Turkey’s tourism industry before the bombing of the Russian jet.

Egypt’s 2013 international tourism receipts were $7.3 billion, and 2013 GDP was $272 billion. The tourism-to-GDP ratio was 2.68 percent. Forbes stated that flight embargoes are costing Egypt $280 million a month. Tourism numbers in Egypt fell after Hosni Mubarak was deposed in 2011 and had yet to rebound. The possibility that the one-third of all Egypt’s tourists represented by Russia could disappear will add to the country’s struggling economy. But due to security concerns, Egypt faces loss of tourists from other European countries as well.

Dependency on tourism worldwide, in terms of ratio of receipts to GDP, is less than either Egypt or Turkey. World total figures were $1,381 billion in international tourism receipts and GDP was $76,124 billion, for a ratio of 1.81 percent. Comparable U.S. figures were $214.8 billion in international tourism receipts and GDP was $16,788 billion in 2013, a ratio of 1.28 percent.