Colliers International has revealed, in its MENA Hotels Quarterly Review for the first quarter (Q1) of 2021, that the Egyptian hotel market will rise by 6,000 keys to reach 91,100 keys in 2022.
The report said that hotel supply in 2020 will stand at 86,300 hotel keys, but will increase in 2021 to reach 90,500 keys.
Colliers noted that the upcoming supply might experience delays due to the impact of the novel coronavirus (COVID-19) on projects under construction. The Red Sea tourist hub of Hurghada accounts for 31% of the forthcoming branded supply in the Egyptian markets.
Hotel supply in Alexandria, meanwhile, is increasing by 5% y-o-y, with Cairo seeing a 2% y-o-y increase, whilst Hurghada is seeing a 1% increase. Sharm El-Sheikh, however, is seeing a 0% rise, the report highlighted.
“The Cairo, Sharm El-Sheikh, and Hurghada markets occupancy dropped an average of -27%, while average daily rate (ADR) dropped -68%,” the report said, “Alexandria’s market showed only a -1% drop in occupancy and a -40% drop in ADR.”
The report also noted that Alexandria’s growing popularity as a Mediterranean coastal city has made the market a favourable domestic leisure destination.
“This is illustrated by the markets ability to achieve better overall KPIs comparted to the other Egyptian markets,” it added, “The North Coast resort market has been a large contributor to the Alexandria’s occupancy and rates during the COVID-19 pandemic.”
Ongoing COVID-19 outbreaks, and a continued need for mass vaccinations, have contributed to the overall stress on Q1 of 2021 hotel performance across the Egypt market. Despite current setbacks, the increase in development and supply is optimistic in the market.