Nov. 07–CAIRO — Daniele Pagliacci manoeuvres his hand to mimic an aircraft taking off into the air and then suddenly has it dive down again toward the ground. But this visitor from Rome is miming not ill-fated Flight KGL 9268 but a bleak outlook for tourism in Egypt.

The October 31 crash of the Russian jetliner over the Sinai Peninsula killed all 224 on board. If the disaster is proven to have been caused by a bomb, it could be a catastrophe for the Egyptian economy.

Pagliacci is eating breakfast at a hotel in Sharm el-Sheikh, the city at the southern end of the Sinai Peninsula where the Russian aircraft took off.

"You think it's going upwards, and then it's going down again," he says.

Pagliacci has visited the Red Sea resort for years and once worked in Sharm el-Sheikh. A few hundred metres away, yachts are sailing off the coastline and divers are enjoying the warm November weather and clear water.

For many, largely from Russia and Britain, this is paradise — an oasis of security in a country where stability has been in short supply since the Arab Spring uprisings.

Few countries combine world-famous tourist attractions and unsettling problems quite like Egypt.

Pyramids, temples and pharaohs, along with weather warm enough for year-round swimming in azure-blue seas, are powerful draws. But deep unrest since the 2011 revolution has undermined Egypt's position as a top destination.

According to the World Travel & Tourism Council, tourism generated 12.6 per cent of Egypt's gross domestic product in 2013. In that year, almost 2.9 million jobs — more than one in 10 — were dependent directly or indirectly on tourism, even though the tourist sector had already been in decline.

The 9.2 million foreigners who visited Egypt in 2013 was down from more than 14 million in 2010.

Now, an affiliate of the Islamic State terror group has claimed that it brought down the Russian airliner over the Sinai. Western intelligence services increasingly suspect that a bomb was indeed responsible.

Britain was the first country to ground flights. Others, including Russia, have followed suit, and Egypt's tourism sector is bracing for another a steep dive.

"Egypt's problem is that the entire country has an image of insecurity," says Stephan Roll, an expert on Egypt for the German Institute for International and Security Affairs (SWP).

In other attacks at tourist locales, normality usually returns as people quickly forget, Roll says, citing the example of the 2002 terrorist attack on Djerba off the Tunisian coast, where holidaymakers soon returned.

But with Egypt a certain level of insecurity has been reached where recovery is no longer so easy, Roll said.

Even if many of those strolling among the lawns of Sharm el-Sheikh insist they will return, tourists could be put off over the long term.

"This is an extremely dangerous area," Roll says.

Hoteliers in Sharm el-Sheikh blame foreign powers rather than a lack of security. The European spokeswoman for a five-star resort insists that the city is the safest place in the world.

Operators on the Red Sea in Egypt do not believe there will be a complete collapse in traffic, like the downturn that followed the Luxor attack in 1997, when Islamist terrorists gunned down 58 holidaymakers in the southern Egyptian city.

Ahmed, standing at the reception of a mid-class hotel near the strip known for its cafes, predicts that Russians, at least, will not easily give up their Egyptian holidays: "They won't find another place as cheap as Sharm el-Sheikh.">