The Egyptian General Company for Tourism and Hotels (EGOTH) will present three tourism investment opportunities at the Arabian Hotel Investment Conference (AHIC), the company’s Chairman and Managing Director, Samir Hassan told Daily News Egypt.
The first project to be presented to investors at the Dubai conference, which is taking place 5-7 May, will be the two-star Cleopatra Hotel, upgrading the hotel through renovation to a three-star hotel.
The second will be the Cosmopolitan Hotel, now under renovation through a bidding invitation to management companies. The third project will be the Opal floating restaurant. All three projects are located in Cairo.
“We will not be specifying amounts that should be invested in the renovation process of the proposed projects, we will however receive investors’ offers, plans as well as their technical and financial studies,” Hassan said. “Required renovation fees for the three projects are not very high, and Arab investors might be interested in investing in them.”
The company has been opening the door for receiving investors’ offers for the three projects, but it is still looking for further offers from which it will choose the best, Hassan indicated. He added that the Cosmopolitan Hotel’s development proposal has been presented to the Ministry of Tourism, although no agreements have yet been reached with the ministry.
“The company has moved from recording losses to profits, as in fiscal year (FY) 2013/2014, EGOTH recorded EGP 173m losses and accumulated losses amounted to EGP 195m,” Hassan said. “Meanwhile, as from July 2014 until the end of March 2015, EGOTH recorded profits worth EGP 111m, whereby by reaching the end of the current FY in June 2015, we aim to reach profits of more than EGP 120m.”
Furthermore, throughout FY 2015/2016 the company plans to inject total investments worth EGP 404m. Meanwhile continuous investments by the company will proceed until FY 2017/2018 to reach more than EGP 900m.
The amounts will be used for renovating and developing existing assets of the company, Hassan noted.
EGOTH will now be directed towards two means of financing other than bank loans. The company will depend on self-financing and external investors in order to fund the development of its projects.
“Abandoning the dependence on loans is a very good step for the company as it will lighten the burden on the company’s dues and expenses. We have loaned EGP 554m from the National Bank of Egypt (NBE) to finance a number of projects, we have however stopped using the rest of the loan and have started looking for other financing methods,” Hassan indicated.
Moreover, according to Hassan, in the first four months of 2015, Alexandria and Cairo had the highest occupancy rates compared to other places the company is present in, in the country.
The average of occupancy rates during 2011-2013 were around 35% in the two governorates, now however they’ve exceeded 60% in Cairo and around 55% in Alexandria.
“Out of question we’re targeting more than this, however it is getting better,” he noted.
Regarding tourism hurdles, Hassan said the main obstacle limiting the tourism flow into Egypt is the political instability that led some countries to impose travel restrictions on Egypt.
In early to mid 2014, however, following the new government’s inauguration, several countries lifted travel restrictions to Egypt. The decision left airlines reducing the number of flights to and from Egypt, however, leaving the rate of flights very small until now.
“Airlines still need time to rearrange their plans and Implement procedures needed for increasing flight numbers, they will still take more time to do that,” Hassan noted.
EGOTH is one of the main companies in the field of hotels in Egypt, and is fully owned by the Egyptian government. It is affiliated to the Holding Company for Tourism, Hotels and Cinema (HOTAC). The company was established in 1976 and now owns 14 hotels across Egypt, including Cairo, Alexandria, Giza, Dahab, Luxor, Aswan, and Ain Sokhna amongst others.