* Militant group says will attack tourists in country
* Industry already weak since Arab Spring in 2011
* Red Sea resorts quiet but some cancellations coming in
* Hotels and operators step up security
By Victoria Bryan and Dominique Vidalon
FRANKFURT/PARIS, Feb 20 The bombing of a coach
carrying Korean holidaymakers in the Sinai peninsula on Sunday
has dealt Egyptian tourism a hammer blow, just as it was
attempting a fragile recovery from three years of political
By killing two holidaymakers near one of Egypt's biggest
sea-and-sun resorts, the Islamist militants behind the attack
have undermined Egyptian official assurances that foreigners
face no threat from the turmoil that has shaken the country
since the overthrow of autocrat Hosni Mubarak in 2011.
The Islamist group Ansar Bayt al-Maqdis said it carried out
the bombing and has told tourists to leave Egypt, threatening to
attack any who are still in the country after Thursday.
Georges Colson, chairman of French travel agency federation
SNAV, said his organisation was advising people to choose
"The winter season is dead, and indications for Easter are
that people are not fighting to go to Egypt," he said.
Such warnings strike fear into an industry that provides a
livelihood for millions of Egyptians and brings in a large chunk
of the country's foreign currency.
Tour operators had been nursing hopes of better days after a
dire 2013, when the ousting of President Mohamed Mursi and the
killing of hundreds of his supporters tipped the sector back
into crisis. Tourism revenue slumped 41 percent last year to
European travel companies halted holidays to popular Red Sea
resorts like Hurghada, Sharm el-Sheikh and Marsa Alam after the
bloodshed that followed Mursi's removal in July.
In September, embassies relaxed travel warnings and many
Europeans pining for sunshine during the dark winter months
returned to the beach resorts, which lie far from the violence
in Cairo and Alexandria and offer direct flight connections.
To the hoteliers, restaurant owners and diving instructors
on Egypt's Red Sea coast, it seemed they could find a way to
survive the almost permanent unrest in the cities.
Their optimism was founded partly on the presence of
roadblocks and police patrols protecting the resorts, with their
hotels, golf courses, clipped lawns and soft-sand beaches.
By contrast, famed tourist sites closer to Egypt's towns and
cities - the Pyramids of Giza, the Valley of the Kings - have
seen only a trickle of visitors since 2011, to the dismay of
Nile cruise operators and impoverished trinket sellers who rely
on passing trade.
But it is the seaside resorts, offering an experience that
differs little from beach holidays from Barbados to Bali, that
are the backbone of Egyptian tourism.
The coach bombing was near Taba in southern Sinai, not far
from an Israel border crossing often used by vacationers. The
explosion killed two South Koreans and one Egyptian.
It was one of the worst attacks targeting tourists since
militants struck the Hilton hotel in Taba in 2004, killing 34
people. The resort, which lies three and a half hours drive
north of Sharm el-Sheikh, still has a heavy security presence.
Although militants scattered across the desert and mountain
landscape have stepped up their activities since Mubarak's
overthrow, their insurgency is focused on northern Sinai. Taba
was viewed by Western governments as safe for visitors.
But the ultimatum from Ansar Bayt al-Maqdis could deter
foreigners from visiting even regions that lie far beyond the
Islamist group's base and its main zone of activity.
In Hurghada, hundreds of miles south of Sinai on the
Egyptian mainland, boat and beach resort manager Nasser Mazen
said he was worried.
"At the moment we only work at 25 percent capacity of what
we would normally do in February," he said. "We hope that these
attacks will stop. Tourists ... see what's happening in Egypt in
the media and postpone their travel to next year or later."
France's Club Med, which runs the Sinai Bay resort
in Taba, said it was keeping the site open but had stepped up
security and was advising clients not to venture outside the
The new threats in Egypt are "a situation that is a source
of concern for us", a Club Med spokeswoman said.
Some guests have cancelled trips, she said, and Club Med was
offering refunds or the chance to book to other destinations.
Marriott, Hilton and Accor have
also stepped up security at their hotels in Sinai.
Foreign governments have warned their nationals visiting
Egypt's big cities since 2011, but the sense of urgency has
grown after Sunday's attack.
The UK embassy in Egypt advised Britons on Wednesday against
all but essential travel to most of southern Sinai, home of some
of Egypt's busiest resorts. That level of warning did not apply
to the region's biggest tourism zone, Sharm el-Sheikh.
A French diplomatic source said: "Given the Egyptian and
regional context, all travellers should consider that there is a
threat of terrorism. The situation in the Sinai is worrying".
Around 100,000 French tourists travelled to Egypt last year,
already just a sixth of the number who visited in 2010.
Only days after the Taba attack, Russia's tour operator
association is reporting a fall in bookings and Germany's travel
association DRV is bracing for bad news.
"Travel from Germany has simply not recovered since the Arab
Spring and any further destabilisation only makes guests more
wary," said DRV president Juergen Buechy.
About 975,000 Germans travelled to Egypt in 2013, 15 percent
down on 2012 and far below the 1.3 million who travelled there
in 2010, the Egyptian tourist office in Frankfurt said.
Russian, Germany and Britain are Egypt's biggest source of
tourists. Tour operators such as TUI Travel and Thomas
Cook have scaled back the number of Egyptian holidays on
offer during the past three years.
European travel companies hit by weak local economies and
the turmoil in Egypt now face more pain. The slump in Egyptian
business already cut 19 million euros off TUI Travel's operating
profits in the first quarter, its parent company TUI AG
said last week.
For now, tour operators are not obliged to offer free
cancellations and rebookings or to bring people home early.
People already holidaying in the big Red Sea resorts of
Sharm, Hurghada and Marsa Alam seemed untroubled by the latest
news, tour operators and associations said.
Guests are being kept up to date with news and travel
advice, but none have asked to come home early, representatives
of Italian and German tour operators told Reuters.
But many have cancelled day trips to far-flung spots within
Sinai such as St Catherine's Monastery.
"We cannot prevent clients from going to Egypt but it is our
role to warn them about the risk," said Colson of France's SNAV.