Occupancy rates at Egyptian hotels to rise by 19-29% this year -Colliers
Colliers International maintained its optimistic forecast for Egypt’s hotel occupancy in its January report on MENA hotels (pdf), with all four of its listed Egyptian destinations — Cairo, Sharm El Sheikh, Hurghada and Alexandria — expected to see occupancy rates rise by 19-29% this year compared with 2021.
More travelers are expected at our Red Sea resorts this year: Colliers expects occupancy rates in Sharm to hit 60%, up 19% y-o-y, while Hurghada’s hotels are expected to reach occupancy rates of 69%, up 29% y-o-y. The real estate services firm increased its estimates for both cities by 2 percentage points on its last estimate in November (pdf).
The growth partly stems from a favorable base effect: The government lifted a 70% cap on hotel occupancy rates last October, after raising it from 50% in July. The cap was part of covid-19 measures brought in at the onset of the pandemic.
Could escalation in the Russia-Ukraine crisis pose a threat to recovery? “Travel uncertainty in Egypt’s key feeder markets is expected to slow the growth of demand,” says the report. Russia and Ukraine are two of our most important tourism markets in terms of volume. More than 700k Russian tourists visited Egypt last year, boosted by the return of direct flights from Russia to Red Sea resorts after a six-year hiatus, as well as the return of charter flights.
GEM to draw tourists to the capital? “New attractions” in Cairo are expected to push hotel occupancy rates to 69%, marking a 21% y-o-y rise. The opening of the EGP 20 bn Grand Egyptian Museum — the largest museum in the world dedicated to a single civilization — is slated for the second half of this year.
Tourism revenues returned to pre-pandemic levels in 2021, surpassing USD 13 bn, according to the Tourism Ministry, and eclipsing its USD 6-9 bn target. The ministry is anticipating revenues to rise still further this year, on the back of the GEM’s opening, the completion of the EGP 275 bn Sinai Development plan, the inauguration of new destinations such as El Galala and new hotels in El Alamein.