Egypt cited as a market to watch in the mid-to-long term
Recent tourism demands and renewed efforts by the Egyptian Tourism Ministry behind the claim
In his interview with Hotelier, Christopher Lund, head of hospitality at Colliers International MENA, revealed that Egypt is a market to watch due to renewed efforts by the Egyptian Tourism Ministry to strongly market and diversity the offering, as well as targeting new source markets.
Lund, who also mentioned that 2019 is expected to remain a challenging environment for hoteliers, said that such efforts by the Egyptian Tourism Industry were already beginning to bear fruit, which he says has been illustrated by the surge in tourism demand seen recently across the country.
The findings were reiterated by online news portal Hotel News Now, which said: “Egypt’s hotel fundamentals are recovering as tourists return.” The report cited a number of factors for the recovery of the North Africa country and its growth in hotel development, which included: “hotel firms domestic and international can now own 100% of a hotel’s operation and real estate, return on investment can be repatriated effortlessly, new investment laws passed in 2017 have settled nerves, a growing Egyptian middle class, and the return of international travellers following terrorist incidents, including the October 2015 attack on a Russian aircraft over the Sinai Peninsula.”
The online portal cited Karl Lerner, founder and chairman of Cairo-based hotel consultancy Impact and an Austrian who has lived in Egypt since 1989, as saying that the main obstacle [to Egypt’s tourism growth] is the country’s high interest rate. “If you are working with local currency, that makes it a little difficult, but of course you do not have to do that,” he said t. “Egypt has more transparency, and administrational barriers have been streamlined. There are open minds here, and the government understands how important the need is to grow the economy,” he was reported as saying.
The report also cited data from STR, the parent company of the online portal, which revealed an increase in all three major metrics of Egyptian hotel performance. “In October 2018, hotel occupancy for all of Egypt increased 17.3% year over year to 63.6%, while average daily rate (ADR) has jumped 14.5% to 1,328.91 Egyptian pounds ($74.09) and revenue per available room grew 34.3% to 844.93 Egyptian pounds ($47.11),” said the report.
Figures for Cairo were also revealed, illustrating that “occupancy increased 10.1% in October to 71.2%, while ADR rose 7.9% to 1,671.10 Egyptian pounds ($93.17) and RevPAR grew 18.7% to 1,189.22 Egyptian pounds ($66.30).”
Speaking about the medium-to-long term outlook for the entire region in general including Egypt, Christopher Lund pointed out that the medium to long-term outlook is much brighter, citing governmental tourism initiatives as a deciding factor.