Egypt: Collier International estimates over 9000 hotel rooms built by 2019
The Cairo Four Seasons Hotel. (Wikimedia Commons)
Colliers International predicted that hotel supply will increase by 17% during the coming short- to medium-term period, between 2015 and 2019. The company said in its latest report that the rooms’ supply will jump by 9,862 rooms across 30 properties.
Hilton Worldwide, which has nine properties and approximately 2,906 rooms, will seek to increase its tourism investment, the report noted.
“The management company’s pipeline will look to add in Cairo, Hurghada, Sharm El-Sheikh and Marsa Alam,” the report said.
Marriot Hotels will also seek to “to add 40-50 new hotels as part of a long term development plan for Egypt”.
Marriot Hotels’ Cairo hotels witnessed 100% occupancy, while the hotels in the Red Sea region experienced a 25% increase.
Around 54% of the total hotels in Egypt are 5-star hotels, while 37% are 4-star. The remaining 9% are 3-star hotels.
“All-inclusive Red Sea resorts tend to attract European travellers while Luxury hotels cater for domestic market and tourists from the Gulf Cooperation Council,” the report said.
European tourists account for the highest percentage in the tourism and hotels market, comprising 69%. Middle East tourists come in second place with 18.4%, while African and Asian tourists represent 8.6%.
On the forecast hotel performance, the company stated that demand growth can be expected, adding that Cairo will be the major benefiter with a 28% increase in occupancy levels.
“Average rates are expected to increase within Alexandria as the city benefits from strong consistent demand levels,” the report said. “Sharm El-Sheikh is expected to benefit from a 5.5% increase in occupancy rates and a 4% increase in ADR levels.”
Hurghada will slightly lower its rates to drive demand and emulate pre-Arab Spring occupancy levels.
In a recent report, the company pointed out that revenues for available hotel rooms in Cairo and Sharm El-Sheikh are expected to pick up notably between March and May.
The company indicated that the gradual return of demands to pre-revolution levels for Cairo hotels is to be expected. It stated that revenue per available room can increase by up to 58% year-on-year (YoY) bases for the March-May 2015 period.
Tourism and economy
The report mentioned that the increase in tourism spending has driven the tourism gross domestic product by 11% between 2013 and 2014.
“Despite the number of inbounds remaining constant in 2014, total value of tourism spending increased by 12.2% reaching EGP 153bn, an all time high since 2008,” the report said.
“The increase was attributed to a 9.3% increase in domestic tourism as the segment benefits from travel packages catered to drive local demand,” it added.
Capital investments in tourism related projects have increased by 9% during 2014, reaching EGP 34bn.
Filippo Sona, Colliers International’s hotel director for the Middle East and North Africa, previously told Daily News Egypt that the government’s goal to make a tourism income of $26bn by 2020 may extend to 2025-2030 instead.
“In our view, the recovery of the Egyptian tourism is likely to take longer than anticipated. Despite the positive start of 2015, with all the industry’s key performance indicators suggesting that the market is on a growth pattern, the industry will reach this level of tourism income for the period of 2025-2030,” Sona said.
By Sara Aggour
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