Cairo hotels maintained growth in occupancy performance in the second quarter (Q2) of 2017, achieving 4% growth from Q2 2016. However, the average daily rate (ADR) remains below the rates of 2016 in US dollar terms as a result of the currency flotation in November 2016, according to Colliers International’s “Egypt Quarterly Review” report.
Moreover, Sharm El-Shiekh, and Hurghada have witnessed an increase in occupancy in Q2 2017, compared to the same period 2016, due to the increase from both domestic and regional markets, while Alexandria maintained healthy and stable occupancy rates. This was mainly driven by domestic demand, as well as demand from the Gulf Cooperation Council (GCC).
According to the report, supply has increased in Cairo with the completion of different high-profile properties since Q2 2016, such as Steigenberger El-Tahrir, Westin Cairo Golf Resort, and the re-opening of Sheraton Cairo Hotel. In Alexandria’s case, supply is forecast to remain constant in 2017 and 2018. On the other hand, supply in both Sharm El-Shiekh and Hurghada remain stagnant due to the decline in demand.
The report forecasts that Cairo hotels to continue with their higher occupancy performance in the rest of 2017. As for Alexandria, the report indicates that its geographical location as well as its natural resources will allow it to capture leisure family demand.
In regard to Sharm El-Shiekh and Hurghada, the lift of travel bans from some key European markets, in addition to the witnessed increase in domestic and Arab visitors is expected to result in a higher occupancy rate; however, they are to remain contingent to travel bans and restriction from European countries.