Egypt sees 20 percent rise in tourists this year despite insecurity

(Reuters) - Egypt projects a rise of about 20 percent in tourist numbers this year, the tourism minister said on Wednesday, despite outbreaks of violence after last year's Arab Spring.

The uprising that toppled Hosni Mubarak last February and political instability since then have stopped millions of potential visitors to Egypt's beach resorts and ancient sites.

Tourism accounted for more than a tenth of Egypt's gross domestic product before the 18-day revolt that was driven by widespread anger at poverty and high-levels of corruption. The country's large cities are still prey to unrest.

But Tourism Minister Hisham Zaazou cited strong recent occupancy rates at hotels. About 8.8 million tourists visited Egypt in the first nine months of this year, he said at an industry event, and revenue was 6.9 billion.

"What I'm targeting is 11.5 million to 12 million tourists by the end of December. For sure over 11 million," Zaazou said. He said numbers should return to 2010 levels by the end of 2013 depending on the security situation.

Some 14.5 million tourists visited Egypt in 2010, generating around 12.5 billion Egyptian pounds ($2.05 billion) in revenue, whereas last year 9.8 million tourists brought in 8.8 billion pounds, according to government figures.

The government has a long-term plan to draw 30 million tourists by 2020, generating industry revenue of $25 billion.

Clashes in Cairo between liberal opponents of newly elected Islamist President Mohamed Mursi and his supporters following a demonstration injured more than 100 people last week. Another protest is planned on Friday.

In addition to security concerns, anxiety over the growing influence of Islamists following Mursi's election has fed tourism sector investors' fears over possible restrictions on alcohol sales and swimwear at popular resorts.

Zaazou said that while the government may introduce options for tourists wanting to adhere to Islamic sharia law, that would not change what Egypt offers tourists elsewhere.

"Our desire to introduce additional products that would suit certain Arab and Islamic market segments ... will not happen at the cost of our mainstream business," he said.

Zaazou said he would look into a possible tax break for investors in the tourism sector and present a study to the government. The study may propose tax breaks of up to 10 years for developers who build hotels within a specific period.

He said he was also looking into restoring air routes that closed when governments issued warnings on travel to Egypt.

($1 = 6.1050 Egyptian pounds)

(Reporting by Asma Alsharif; Editing by Louise Ireland)