Citadel, Memphis, Thebes: Will more tourists ensure financial sustainability of Egypt’s heritage sites?

(Photo courtesy of Ryansworld)

The Senefru Bint Pyramid in Dahshour was opened after restoration to the public for the first time ever on Saturday. Egypt’s Minister of Antiquities Khaled El-Enany and foreign and African ambassadors to Egypt from 40 countries attended the inauguration yesterday.

According to reports by the World Heritage Convention, which are submitted to the UNESCO, the main threats to cultural heritage sites are management and institutional factors, which include financial resources. Inadequate management is a threat that occurs twice as often as other events, such as war, natural disasters etc. 

A research paper entitled “Sustainable financial management of tangible cultural heritage sites” by Rand Eppich and Jose Luis Garcia Grinda of the Technical University of Madrid examines the inadequate management of financial resources in conducting conservation and maintenance efforts on cultural sites. In the paper, they focus on immovable cultural heritage; in Egypt, this would include the Pyramids of Giza, the Citadel and the likes. 

The paper’s aim is to understand the current situation of heritage sites around the Mediterranean and finding solutions to achieve financial sustainability. 

Where do heritage sites fall short?
The researchers investigated 28 World Heritage sites in and around the Mediterranean, of which – they found – most fall short of financial sustainability, despite having management plans in place. 

“Most sites do not sufficiently identify existing revenue, account adequately for expenditures, have little or no financial reporting and do not carry out financial planning. Most importantly, more than half do not seek to align the goals of conservation, access and education with finance,” the authors find.

Is tourism the answer?
There is a positive correlation between tourism and financial sustainability – however, a high number of tourists does not ensure greater financial sustainability. According to the data analyzed in the study, several sites with high visitation did not meet the definition of financial sustainability. “Undoubtedly, international tourism is one of the most important revenue streams for cultural heritage sites, but this singular focus often ignores the surrounding community, their frequent use, contributions through taxes and local involvement,” according to the authors. 

Consequently, there are five factors – far away from increasing the number of tourists – that are critical to the financial sustainability of heritage sites: conducive, open planning environment, knowledge and education concerning finance, positive perceptions and acknowledgement of the importance of finance, managerial autonomy and public interest in the heritage site. 

The World Heritage Convention requests an appropriate management plan at its sites; however, it sometimes leads to managers just working on checking the requirement boxes of the convention, rather than creating an environment that encourages actual, real planning. Additionally, “90% of the studied sites had some limited information concerning financial management.” Managers are often aware of the sites’ history, conservation problems etc., but actual knowledge of accounting reports, pricing access and income diversifications seem to be missing. Sites where managers were aware of these topics were more financially sustainable. 

Moreover, the perception of profitability carries a negative connotation with it and is often associated with economic exploitation. The opening of shops or cafes at these sites can quickly turn into over-commercialization, which is why site managers are often wary of degrading heritage through profitability. 

Furthermore, “75% [of investigated heritage sites] were heavily dependent upon direct state funding for [more than] 90% of their budgets.” For that, financial decisions were made far away from the site and its managers by a higher level of governance. 

What needs to be done in Egypt?
The research examines three heritage sites in Egypt in order to evaluate their financial sustainability, namely the Citadel in Cairo, the Memphis area in Giza and Thebes. All of these sites are 100% financed by the state – with Thebes alone welcoming 1.5 million visitors in 2012, according to the study. The researchers found that each of these heritage sites only have one characteristic of financial sustainability. Memphis has an open planning environment in which site managers have the space to actually plan. The Citadel and Thebes both have a positive perception towards revenue-generating activities at the heritage sites. However, overall, Eppich and Grinda believe that “there are no significant elements of financial sustainability” at those sites. 

“Over-dependence on highly variable top-down state funding leaves tangible cultural heritage vulnerable and open to uncertainty,” according to the paper. However, it is also unreasonable to expect site managers to suddenly become entrepreneurs and get the properties up and running in a self-sufficient manner. 

Managers of heritage sites need to be educated about financial management and its details, and give an open space that encourages real planning. Additionally, they need to be heritage professionals, not merely financial managers, in order to ensure their knowledge of the site and what it needs in order to be conserved. If these managers enjoy a certain level of autonomy over financial decisions and plans, innovation will be encouraged. 

Other than that, public interest – i.e. the community around the site and tourists – need to be taken seriously and included. Volunteers, active membership programs, event calendars and donation possibilities can all check the pulse of public interest, which has a positive correlation with financial sustainability. 

Once financial sustainability is achieved, managers will become more open to activities that will generate surplus, that could be reinvested in the site.

“The primary objective is to achieve effective conservation and income generation as a means to an end,” the authors explain. 

“If those who care about the historical, aesthetic and scientific values do not take control of the financial value, someone in the marketplace who is less sensitive will,” the authors conclude. 

    Knowledge Partners

    CONTACT US

    School of Business
    American University in Cairo
    AUC Avenue – P.O. Box 74
    New Cairo 11835
    Egypt
    Email: BusinessForward@aucegypt.edu

    Copyrights © 2017 The American University in Cairo School of Business • All Rights Reserved

    Copyrights © 2017 The American University in Cairo School of Business • All Rights Reserved