A Colliers International report for Egyptian hotels in the cities of Cairo, Alexandria, Sharm El-Sheikh, and Hurghada has revealed that Cairo hotels will witness an addition through the opening of St. Regis Cairo and Radisson Blu Nasr City, in addition to the reopening of the Sheraton Cairo Hotel & Casino, representing a 10% increase in total branded supply within the city.
Cairo achieved occupancy levels above 70% in the first quarter of 2017, the highest since 2007, and occupancy is expected to increase further as consumer confidence returns to the city on account of government efforts, according to the report.
As for the report’s outlook for 2017, the planned airport to be established in 6th of October City is expected to witness a number of businesses establish some presence in Western Cairo. As a result, the market may appeal to hotel investors as demand could grow further.
As for Alexandria, supply is expected to remain constant in 2017 and 2018 as forthcoming developments face delays, Colliers International said.
The Alexandrian hotels market is less prone to seasonality fluctuations due to the diverse market segments it caters, and because it is mainly a domestic and Gulf Cooperation Council (GCC) driven market. This relative stability supports a healthier occupancy performance throughout the year when compared to Egypt’s other coastal destinations.
The distinct geographical location of Alexandria, coupled with its natural resources, provides it with the opportunity to capture significant leisure family demand. Moreover, the cultural demand and reduced journey time when compared to other coastal cities in Egypt is expected to further fuel demand from domestic leisure visitors with reduced spending power.
In Sharm El-Sheikh, supply is expected to grow at a cumulative growth rate of 4.5% due to the confirmed Citystars complex, which is expected to comprise of three hotels, namely Raffles, Fairmont, and Swissotel. 2017 is expected to see demand levels increase as travel bans are lifted and the destination is perceived as even more affordable due to the Egyptian pound devaluation.
Occupancy rates have increased by 8% in the first quarter of 2017 in Sharm El-Sheikh, and according to the report, this trend is expected to continue over the course of the year.
On the other hand, development delays are expected in Hurghada due to the current conditions of the market, so supply is expected to remain constant throughout 2017.
The destination is expecting higher occupancy levels with the lifting of flight bans. Additionally, it is expected to appeal to family travellers due to the deflated value of the Egyptian pound.
Colliers International is a global company in commercial real estate services, with over 15,000 employees operating in 68 countries.