The negative repercussions of the Russian plane crash on 31 October are still affecting the city of Sharm El-Sheikh, according to a report from Colliers International.
“The flight ban, which took place after the crash, notably impacts the demand. The number of tourists from Russia and Eastern Europe has significantly decreased,” the report said. With the decline in the International demand, the sector aims to seek increased flow by relying on domestic tourism.
The report also predicted the demand for Sharm El-Sheikh will decline by 22% from December 2015 to February 2016.
Sharm El-Sheikh accounts for 50% of total Egyptian hotel capacity, operating in South Sinai with 62,000 hotel rooms, according to the Egyptian Chamber of Hotels.
Regarding Hurgada, the report said the crash’s repercussions continue to affect the city and predicts an improvement in the medium term. The demand for Hurgada will decrease by 25%.
The increase of hotel occupancy in Sharm El-Sheikh depends on the return of Russian and British flights, according to head of tourism investors association of South Sinai Hisham Ali.
In November, the UK and Russia suspended flights to Sharm El-Sheikh, following the Russian plane crash, until the reasons of the crash were revealed.
The Egyptian government subsequently chose British company Control Risks to review the airport security operations. The review is expected to be finalised in three months. Hurgada and South Sinai have approximately 120,000 rooms of the total 225,000 hotel rooms operating in Egypt.
Colliers highlighted that from December 2015 to February 2016, the highest tourist occupancy rate is expected to be 63% in Alexandria and 53% in Cairo. Meanwhile, the lowest predicted occupancy rates are expected to be 21% in Aswan.
“The occupancy rates in Alexandria increased by approximately 60% during Christmas time. Over January however, we do not expect that they will reach 30% in light of cold weather,” former head of Chamber of Hotels Wassim Mohieddin said.
Mohieddin said that tourism in Alexandria basically depends on conferences, especially petroleum and pharmaceutical conferences organised by the Bibliotheca Alexandrina.
Mohieddin also expects occupancy rates will grow by the end of January until the spring break holiday period, where they are expected to exceed 75% due to domestic tourism.
In Luxor and Aswan, the occupancy rate increased by between 4% and 7% over December, as the Ministry of Tourism organised direct flights from Paris to Luxor, said a member in the Chamber of Tourism Companies, Tharwat Al-Agamy.
Al-Agamy also expected increased occupancy by the end of January, attributing this increase to flows of Spanish, Portuguese, British and Japanese tourists, adding that they would reach more than 30%.
However, Al-Agamy does not expect that hotel occupancy to exceed 35% over the first quarter (Q1) of 2016, in light of the repercussions of Russian plane crash.
Luxor recorded the highest guest ratings at 84%, followed by Sharm El-Sheikh and Hurgada that received an 80% approval rate. Alexandria recorded an approval rate of 74% while Cairo hotels received 72% approval.