In Paris, a diplomatic official said French tourists were among those involved in the accident, but would give no details on how many, or whether French citizens were among those killed. The official spoke on condition of anonymity because he wasn't authorized to be publicly named according to government policy. French media reports said two French tourists were among the dead but the official wouldn't confirm that.
Egypt's tourism industry has been decimated since the 2011 uprising and the political turmoil that followed and continues to this day. Luxor's hotels are currently about 25 percent full in what is supposed to be the peak of the winter season.
Scared off by the turmoil and tenuous security following the uprising, the number of tourists coming to Egypt fell to 9.8 million in 2011 from 14.7 million the year before, and revenues plunged 30 percent to $8.8 billion.
Magda Fawzi, whose company operates four luxury Nile River cruise boats to Luxor, said she expects the accident will lead to tourist cancellations. Tour guide Hadi Salama said he expects Tuesday's accident to hurt the eight hot air balloon companies operating in Luxor, but that it may not directly affect tourism to the Nile Valley city.
Poverty swelled at the country's fastest rate in Luxor, which is highly dependent on visitors to its monumental temples and the tombs of King Tutankhamun and other pharaohs. In 2011, 39 percent of its population lived on less than $1 a day, compared to 18 percent in 2009, according to government figures.
In August, Egypt's Islamist President Mohammed Morsi flew to Luxor to encourage tourism there, about a month after he took office and vowed that Egypt was safe for tourists.
"Egypt is safer than before, and is open for all," he said in remarks carried by the official MENA news agency at the time. He was referring to the security situation following the 2011 ouster of autocratic leader Hosni Mubarak.
Deadly accidents caused by poor management and a decrepit infrastructure have taken place since Morsi took office. In January, 19 Egyptian conscripts died when their rickety train jumped the track. In November, 49 kindergarteners were killed when their school bus crashed into a speeding train because the railway guard failed to close the crossing.
The Muslim Brotherhood, Egypt's most powerful political force and Morsi's base of support, blames accidents on a culture of negligence fostered by Mubarak.
Associated Press writers Kelvin Chan in Hong Kong, Jill Lawless in London and Angela Charlton in Paris contributed to this report.
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