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Medium-term recovery expected in Sharm El-Sheikh: Colliers - Daily News Egypt

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Medium-term recovery expected in Sharm El-Sheikh: Colliers

Occupancy to reach 36% in February and March in Sharm El-Sheikh


Sharm El-Sheikh continues to suffer the repercussions of the Russian plan crash and the militant attacks it has witnessed recently, real estate company Colliers International highlighted in its recent forecast report.

The company stated, however, that a medium term recovery is anticipated. This coincides with the announcements made by Minister of Tourism Hisham Zaazou, who predicted a recovery in the sector by March.

Colliers anticipated that, between January and March, the revenue per available room in Sharm El-Sheikh hotels would see a 40% drop, compared to the same period last year.  The state of tourism in Hurghada is no better than that of Sharm, with the revenue per available room expected to see a 26% decline during February and March 2016.

“Governmental travel advice continues to affect demand, and the Western European and Russian segments have dipped considerably, thereby increasing reliance on domestic demand,” the report said.

Colliers predicted that the revenue per available room in Hurghada and Sharm El-Sheikh to be $18 and $16, respectively. Occupancy rate is Sharm El-Sheikh will be 36%, while in Hurghada it will reach 38%.

As for Luxor and Alexandria, the first will have an occupancy rate of 21% with the revenue per available room expected to reach $9, a 20% increase compared to the same period last year. Occupancy in the latter city will reach 65%, with the revenue per room increasing by 1% when compared to the same period last year. Revenue in Alexandria is expected to be $62.

In September, eight Mexican tourists and four Egyptians were killed in an attack by the Egyptian armed forces in the Western Desert, after the latter mistook the tourists for militants. The incident was met with huge international backlash, and triggered fears that it would cause a further decline in tourism.

Another incident occurred on 31 October, when a Russian commercial airliner crashed over North Sinai, purportedly after a bomb was placed on it, killing all 224 passengers and crew members. Several countries, including Russia and the United Kingdom, have suspended flights to Egypt.

In January, two militants entered the Bella Vista resort in Hurghada and stabbed three tourists, one Swedish and two Australian. The militants entered the hotel through a restaurant facing the street.

Another attack took place near the Giza Pyramids, after gunmen attacked tourists, leaving no casualties but destroying the facade of the Three Pyramids hotel near the location of attack.

 

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