Africa -  Egypt - Sharm el Sheikh

Egypt continues to face economic challenges, showing large account deficits due to a lack of foreign reserve and one of the lowest GDP growths in Africa at 2.6% in 2016. The country is currently going through

significant structural adjustments supported by the IMF that, although positive, brought the inflation rate to very high levels (up to 30.1%) last year. The good news is the renewal of interest from investors following these adjustments and a new investment law is scheduled in 2017 that should boost foreign inflows. In addition, President Trump gave his full support to President El Sisi during his visit to the United States in April 2017 which brings new hopes for the Egyptian economy.

However, the terror-related incidents in the country in 2016 has strengthened security concerns. Although the government has implemented emergency powers, that has proven to be relatively ineffectual. The result was tourists remained wary of visiting the country and tourism did not enjoy a substantial recovery.

Sharm El Sheikh has endured a tough year in 2016. Occupancy and ADR plunged following the terrorist attacks in the Red Sea destination. Many countries strengthened travel bans, airlines cancelled their flights to the city and most tour-operators called off their bookings. A subsequent 54.1% decrease in REVPAR has brought values down to below US$28,000, a level that the city has never experienced before. However, without any buyers and sellers, this number is not much but a mathematical calculation. It does not reflect the actual real estate values but the current unfortunate situation in Sharm El Sheikh that is hopefully to be short-lived as the government put efforts into anti-terrorism policies.

Exchange Rate:

Exchange Rate 2015 Exchange Rate 2016 Change 2015/2016 Exchange Rate 2017 Change 2016/2017
US$ 1 1 1
Egypt - Sharm el Sheikh 0.12938 0.11593 -10.4% 0.05655 -51.2%

Change In Value For Market:

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Egypt - Sharm el Sheikh RevPAR Change

Egypt - Sharm el Sheikh RevPAR

Year RevPAR
2010 55.88
2011 27.38
2012 32.94
2013 31.23
2014 38.14
2015 38.82
2016 17.83
2017 (f) 18.55

For more information, please contact:

Tim Smith, MRICS
tsmith@hvs.com
  • +27 797 342296 (w)
Laura Dutrieux
ldutrieux@hvs.com
Laura Dutrieux
ldutrieux@hvs.com