Slow yet sure recovery for Egypt tourism

07 May 2015

Egypt’s tourism recovery is expected to press ahead following slow growth in the first quarter of 2015

  • Tourist numbers in 2014 stood at 9.9 million compared with 14.7 million in 2010
  • Tourism GDP increased by 11 per cent last year
  • 3,000 rooms being supplied by international brands in the next four years

Egypt’s tourism recovery is slow but sure, says Filippo Sona, director and head of hotels at US-based Colliers International.

Speaking on the sidelines of the Arabian Hotel Investment Conference (Ahic) in Dubai, Sona told MEED that he is confident Egyptian growth will materialise and allow the country to achieve tourism revenues last seen before the 2011 uprising.

The political and social instability in Egypt since the 2011 revolution has damaged the country’s tourism industry, which is a vital part of the economy, generating foreign exchange and employment.

Tourist numbers in 2010 stood at 14.7 million compared with just 9.9 million in 2014.

Speaking to MEED during the Egypt Economic Development Conference in March, tourism minister Khaled Rami said that “safety was not an issue” for tourists visiting the country. He said that one of the failings of the country’s tourism sector was its inability to successfully promote itself. “We didn’t advertise strongly enough in the past four years, but now, with the new advertising campaign, we are back on the right track again,” he said.

Tourism GDP rose 11 per cent last year compared with 2013 figures, accounting for 12 per cent of total output. The rise was mainly due to tourists spending more in Egypt. “Despite the number of inbounds remaining constant in 2014, the total value of tourism spending increased by 12.2 per cent, reaching EGP153bn ($20bn), an all-time high since 2008,” said Sona, talking through Colliers’ quarterly review and forecast of Egypt’s hospitality market.

The report says that major hotel operators are keen on further investment in Egypt, with 3,000 rooms being supplied by international brands in the next four years. “The majority of new supply is planned for Cairo (40 per cent), while 23 per cent is planned for Sharm el-Sheikh. Despite this, no hotel openings took place in the first quarter of this year.”

Sona said the Egyptian market will need to start developing the mid-level segment as well as refurbishing existing five-star and luxury hotels across the country.

“Cairo will remain Egypt’s tourism hub, but other areas such as Alexandria will [offer] great opportunities,” said Sona. He added that with only one branded hotel in Alexandria, this represents an opportunity for international investors. “Alexandria has a rich European history and can become another great destination for those wishing to visit Egypt.”

Several new tourism projects along the Red Sea coast are also progressing and looking for support from private sector developers and investors.

One of the projects is the development of Gamsha Bay, located 40 kilometres north of Hurghada city. The Tourism Development Authority is offering the land, which includes 8.8km of seafront, to companies to develop a tourist resort. HC Securities & Investment is working on the project with the government.

Two other development opportunities on offer are the Marsa Wazar tourist centre at Marsa Alam on the Red Sea coast and the Waterfront Festival World complex, a beachfront complex in Sahl Hasheesh.

Key tourism projects:

  • Waterfront Festival World complex – Sahl Hasheesh, Red Sea
  • Marsa Wazar tourist centre – Marsa Alam, Red Sea
  • Gamsha Bay – Red Sea
  • Papyrus Fund – a collaboration between Ayadi Company for Investment and Development and Cairo Financial Holdings

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