Slump in Egyptian tourism hits Orascom earnings

Unrest deters visitors but Orascom hopeful of an improvement once elections have taken place.

Powered by automated translation

Orascom Development Holding posted a nine-month loss of 75.7 million Swiss francs (Dh306m), as weaker hotel performance in Egypt hit the company’s earnings.

The company’s consolidated revenues for the period dropped 13.2 per cent to 164.7 million Swiss francs.

“The civilian unrest that took place on the 30th of June 2013 and the subsequent events which led to the declaration of a state of emergency and to the imposition of a nighttime curfew have all again pushed several countries to issue travel bans on Egypt,” Orascom said in a statement.

“[This] has decreased tourism rates significantly, compared to the same period last year. These conditions directly impacted our hotel businesses,” Orascom added.

However the compay still issues an upbeat outlook for 2014.

It hopes that after Egypt drafts a new constitution and its parliamentary and presidential elections take place, the country will be able to restore security once again.

“Should the latter positive events materialise, we believe that the group is fundamentally well positioned, with a solid portfolio of hotels and real estate infrastructure as well as cost savings and monetisation programmes on track,” it said.

In July 2013, Orascom launched a cost savings programne to cut its total costs by 50m Swiss francs until the end of next year. The company has saved 38.5m Swiss francs so far and says it is committed to its target.

Orascom said it was on track with the opening of three hotels by the end of this year. It expects to open The Chedi Andermatt hotel in Switzerland, a Rotana hotel in Oman, and a hotel in Egypt’s Makadi Bay near the Red Sea city of Hurghada.