For many years, Egypt has been viewed as a risky tourist destination despite its unrivaled natural landscapes, history, and culture. However, tourists have recently began returning in flocks as stability returns, and the hospitality sector is growing as a result. Invest-Gate delves more into this issue to explore to what extent Egypt started to reap the rewards.

Overview

Owing to the government-led initiatives to improve its bilateral relations and political stability in the country, the Egyptian hospitality and tourism market is showing signs of recovery. Invest-Gate takes a general look at the sector.

The hotel and tourism industry has seen positive performance throughout 2017 in terms of the occupancy rates and increase in investment appetite, according to JLL’s annual report on Egypt real estate market for 2017. The devaluation of the EGP contributed to increased domestic tourism and competitiveness of Egyptian hotels compared to foreign ones. Cairo hotel supply reached 24,000 rooms during 2017, with the reopening of Sheraton Giza during the fourth quarter of 2017, adding 650 rooms to the market, JLL’s annual report adds.

According to Colliers’ report on MENA hotels for 2017, total number of hotels in Cairo, Alexandria, and Sharm El Sheikh reached 78,800 rooms in 2017 as compared to 78,400 in 2016, with expectations to increase to 81,300, 83,400, and 85,000 in 2018, 2019, and 2020, respectively. As for the tourism sector, Egypt has risen up the ranks to be the world’s second fastest growing destinations for international tourists in 2017, according to latest United Nations World Tourism Organization (UNWTO).

Egypt’s tourism revenues jumped 123.5% year-on year to USD 7.6 bn in 2017, while the number of tourists jumped 54% to 8.3 mn in the same year, according to Reuters. Consequently, occupancy rates in Cairo also increased by 12% in 2017, while rising by 33% and 51% in Sharm El Sheikh and Hurghada respectively, Colliers’ annual report reveals.

Major Hotel Brands Coming on Stream

With tourists returning to Egypt after their numbers dropped in the past few years, many major hotel brands are working to have their footprints in the country, thus helping boost tourism. Invest-Gate explores what is in the pipeline.

There are presently 52 projects in Egypt’s hotel construction pipeline, Top Hotel News reports, based on numbers from the Top Hotel Construction database. Once completed, these 52 projects are expected to yield a total of 19,466 rooms for guests.

Earlier this year, Hilton has signed two management agreements with Gulf-Egypt for Hotels & Tourism to operate Heliopolis Hotel & Towers Luxury Hotel under two distinct brands. The 593-room Hilton property is now welcoming guests, while the 247- room Towers Luxury Hotel will be rebranded as luxury brand Waldorf Astoria Cairo to be debuted later this year.

Hilton is not the only major hotel which has announced hotels opening in the country; other luxury hotel brands are slated to open their flagship hotels in the country. Marriott International announced plans to debut Element Hotels in Egypt in early 2019. Said to be the largest Element Hotel in the Middle East and Africa, the hotel will feature 344 rooms.

In addition, the St. Regis Cairo is expected to open this year, adding 366 new rooms to the market supply. This year is also expected to see the opening of the Maadi Twin Tower Hilton, adding 256 hotel rooms to the future supply, according to JLL’s annual report on Egypt’s real estate market for 2017. Four Seasons Resort Sharm El Sheikh also revealed it will be the world’s largest Four Seasons with the addition of 800 new rooms, bringing the total to 1,400 keys, with expectations to be opened in 2019.

The Intercontinental Hotel Group has also signed a partnership agreement to operate a new Crowne Plaza hotel in Sheikh Zayed, with expectations to add 187 hotel rooms within Phase II of Arkan Plaza in 2021.

As for the government’s agenda, there are plans to attract 20 mn tourists and to generate EGP 181.2 bn income from the tourism industry by 2020, according to Timetric Report Store, a data provider headquartered in London. Consequently, the government also plans to expand its own hotel industry by constructing 1.4 mn rooms, accommodating 34 mn tourists by 2020.

The government’s main focus is on the construction of new tourist destinations in Ras Sudr, Ain Sokhna, the Gulf of Aqaba, the North Coast, and the Red Sea, Timetric Report Store adds.

The state-backed hotel operator Tolip Hotels is expected to expand across the nation in the near future, according to Colliers’ report on MENA hotels for 2017. The brand made its debut in 2015 with the opening of the Tolip Heliopolis, with plans to open hotels in New Cairo and Ismailia in 2018