Hotels in Cairo reached their top performance in over a decade as more visitors flock to the Egyptian capital and a limited supply of new hotel projects boosted occupancy amid a wider economic recovery.
Cairo's hotels recorded a 3 per cent jump in occupancy levels to 73 per cent in the year to August compared to the same period last year, making it the highest level since 2008, according to property consultancy JLL's Cairo Real Estate Market report.
"As the economic situation in Cairo is recovering and the Egyptian pound is strong, we are witnessing healthy demand levels across all the sectors of the market," Ayman Sami, country head of JLL Egypt, said. "We expect to see an even more healthy economy in the months to come as government initiatives and large-scale tourism projects continue to boost demand and drive investment in the market."
Egypt's tourism sector, a crucial pillar of its economy, is forecast to see double-digit growth this year after rebounding in 2018 as the North African economy forges ahead with investments in transport and aviation. Its travel and tourism sector grew at 16.5 per cent in 2018, ahead of the global average of 3.9 per cent. It was the second-fastest growing market in North Africa after Ethiopia, according to World Travel & Tourism Council.
Plans to complete the Grand Egyptian Museum, housing national treasures, in 2020 and a Disneyland project on the north coast, are likely to further boost the sector.
Cairo's hotel market recorded a 14 per cent growth in Revenue per Available Room (RevPAR) in the year to August compared to the same period last year, boosted by a 9 per cent increase in average daily rates of $104 (Dh381).
RevPAR is a measure of a hotel’s financial performance and is calculated by multiplying the average daily room rate by the occupancy rate.
The consultancy said it remains positive in its outlook for the hospitality sector as Egypt intensifies promotional campaigns abroad and regulatory reforms within the industry.
"With limited new supply and increased visitor arrivals, the Cairo hotel market is expected to perform strongly over the next 12 months," JLL said.
The total stock of hotel keys in Cairo remained unchanged at 23,500 as no new hotels were completed in the third quarter.
"This is partly due to developers turning their attention to resort destinations elsewhere in Egypt," JLL said.
Most new hotel developments are seeking to be centered around west Cairo, which is gearing to become the tourism hub of the capital, the report said.
Hyatt Regency Cairo West (Al Dau) is expected to open in the fourth quarter of 2020 and will bring 242 rooms next to the Grand Egyptian Museum.