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Egypt to grow 4.5pc, hospitality opportunities on rise

DUBAI, March 5, 2015

Egypt’s gross domestic product (GDP) is on track to grow four per cent in the fiscal year ending June, with expectation for the next fiscal year estimated in the 4.5 per cent range, according to experts.

The growth should accelerate to five per cent or more the year after that, with the Egyptian government forecasting at least $6 billion in foreign direct investment this year, said the organisers of AHIC organisers who visited Cairo, Egypt recently, as part of the Regional Briefing Series.

The also discussed the current status of the Egyptian hospitality market as well as to look at the upcoming opportunities and the needs of the market.

The AHIC Regional Briefings are an initiative launched by the organisers to expand the reach of the AHIC community.

The briefings were invitation only, high level events, designed to be small exclusive forums that bring together the local investment, development and finance communities. It provided an intelligence update on the local hotel market, and ensure the AHIC 2015 programme is fresh and relevant to the Middle East market place.

Philip Wooller, Middle East and Africa area director of STR Global, shared substantial insights on the hospitality market in Egypt with the attendees during the event.  

“The dark days of the Egyptian tourism Industry look to be finally over after four years in the wilderness. In the early to mid-stages of last year, following the formation of the new government, travel restrictions for certain countries were lifted and the much needed tourists started to return.  If the political stability continues, 2015 should be a good year for Egypt,” he said.
 
“Demand for hotel rooms across Egypt in the second half of last year increased by 58 per cent resulting in an additional six million rooms being sold,” Wooller said.

“In Cairo, demand for rooms increased by 91 per cent in the same period resulting in an additional one million rooms sold. In Sharm El Sheikh demand increased by 45 per cent resulting in an additional 372,000 rooms sold.”
 
The end of last year reported 34.6 per cent increase in RevPAR, when comparing to the previous total year of 2013. After the RevPAR declines for 2013’s third and fourth quarters, the year managed to grow this measure in both quarters by 151.6 per cent and 86.6 per cent respectively.

"The average daily rate growth has also been interesting and although not to the levels of the occupancy, growth has risen steadily since 2001. However this measurement is still low on the ‘Global Average Room Rate Index’ and this remains the challenge for Egypt but if the trend continues, which all things considered it is likely to, then the future looks bright for Egypt,” said Wooller.

Meanwhile, the GDP growth figure is expected to grow based on the investments that are set to be announced at a Sharm El-Sheikh conference next month.

Ashraf Salman, Minister of Investment, said: "Political stability, the Sharm conference and many initiatives our government has taken to promote Egypt as a destination for both investment and tourism, are key drivers for growth.

“Moreover, the investment in infrastructure is national in scale, from 3,600 km of new roads to be constructed at a cost of EGP36 billion ($4.7 billion) to a programme to build one million new affordable housing units, and sweeping new investment in the power generation sector. “

"Egypt is investing in high-speed rail links between Alexandria on the Mediterranean Coast and Upper Egypt in our nation’s far south. We are committed to expanding ports, developing renewable energy sector, and to deregulating industries ranging from transportation to the generation and distribution of electricity.

“At the same time, the Central Bank of Egypt has allocated EGP10 billion to lend banks funds at preferred rates and at maturities that will allow them to make mortgage finance accessible to the middle class. In parallel, the CBE has taken steps that have brought the parallel market for currency to a near-complete standstill."

Al Dau Development is one of the upcoming key projects in Egypt, that  have launched new residential Al Dau Heights in the heart of Hurghada about three months ago.

The project is planned as a 1,200-apartment new residential neighbourhood lined with boutique shops cafes and restaurants.  It will link red sea views with the gardens and pool elements to create a sensual harmony of indoor/outdoor living and has been well received by the investment community with over 75 per cent of phase 1 already sold.

The 2015 AHIC Regional Briefings have so far visited Oman, Jeddah and Cairo and will also go to Riyadh and Qatar, ahead of the main conference at Madinat Jumeirah from May 5 to 7. - TradeArabia News Service




Tags: hotel | Egypt | GDP | Conference | AHIC | grow |

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