By Emma Joseph BBC World Business Report

Egypt's tourist industry has started to show signs of recovery, with holidaymakers attracted by the prospect of cheap breaks.

The downturn in global travel following last year's attacks in the United States had a major impact on Egypt's economy.

Belly dancers entertain empty tables

Tourism is a major foreign income earner, but destinations like Sharm-El Sheikh on the Red Sea witnessed an 80% fall in arrivals in the two months after September.

Up until a few months ago the beaches were still empty but now they are filling up.

Most of the people are Egyptians and Palestinians, who are attracted to Sharm-El Sheikh because it is cheap and easy to get to.

"Seventy percent of the people here now are from Muslim countries, mainly from Egypt, Jordan, Lebanon or Saudi Arabia," said one tour operator.

Cheap accommodation

There are also bars full of British tourists who have not turned their backs on Egypt.

"We wouldn't be here if it was dangerous," said one Brit.

"It doesn't matter anyway, it's a great place," said another.

Although many British tourists still come here, there still are not enough of them to fill all the rooms in Sharm-El Sheikh.

"Ninety-nine percent of hotels have suffered low occupancy levels and they've been having to almost give rooms away," said local hotel manager Jim Potter.

Luring Americans

While numbers may be down, there are signs that times may be changing, with American tourists starting to return.

"There's more (Americans) here, considering what happened in September," said US citizen Michelle Laporta Cronne.

"I think tourists are finally coming back and they realise it is safe because you see the military police on the beaches and hotels. That makes you feel safe," she said.

The challenge for the Egyptian government now is to spread that message, and get more people to make Egypt their holiday destination.