Egypt’s hotel market is expected to hike recording between 43% and 62% in occupancy rates in 2021, according to Colliers International’s latest Middle East and North Africa (MENA) Hotels Forecast.
“The novel coronavirus (COVID-19) pandemic continues to weigh upon the travel and tourism sector, with government and industry bodies alike looking for a path towards a sustained recovery,” Colliers said in the report, “While restrictions on movement and international travel have begun to ease, controlled and consistent growth will be the key to achieving previous levels of demand.”
Considering the potential impact of COVID-19 on hotel performance, Colliers provided 2020 and 2021 hotel occupancy forecasts for 24 submarkets in key MENA hospitality markets.
In terms of Egypt, Colliers forecasts that the tourism hotspots of Hurghada and Sharm El-Sheikh will witness a year-on-year (y-o-y) hike in occupancy rates of 88% and 78%, respectively. This will mean that the two cities will see their occupancy rates reach 48% and 43% in 2021, respectively, compared to their 2020 occupancy rates, which stood at 24% and 23%, respectively.
It also projected that Cairo and Alexandria will achieve occupancy rates of 43% and 62% in 2021, respectively, compared to occupancy rates in 2020 of 27% and 45%, respectively. This represents a y-o-y hike of 53% in Cairo, and 38% in Alexandria.
Colliers noted that there remains much uncertainty in the market regarding the expected performance of hotels. Based on its MENA Hotel Market Survey results, the forecast assumes the recovery will start in Q4 of 2020, and continue into 2021.
The forecast assumes faster recovery for the UAE and Saudi Arabia markets, with the former expecting to benefit from the build up to the EXPO, with the actual event expected to start in Q4 of 2021.
The report forecast that the UAE’s Dubai Creek, Festival City, Sheikh Zayed Road, DIFC, Dubai Marina, JBR, and Palm Jumeirah will all achieve occupancy rates of 66%, 65%, 67%, and 65%, respectively.
Regarding Saudi Arabia, Colliers’ 2021 Forecast assumes restricted pilgrim access to Makkah and Madinah during Ramadan and the major Hajj pilgrimage. The markets are expected to continue benefiting from the on-going tourism initiatives, which cover mega projects as well as domestic tourism.
The Saudi cities of Riyadh, Jeddah, Makkah, Madinah, and Al Khobar are all project to witness a occupancy rates of 55%, 51%, 37%, 51%, and 55%, respectively in 2021.