Africa -  Egypt - Sharm el Sheikh

Egypt’s GDP grew by 5.3% in 2018 and is forecast to accelerate by almost 5.5%, according to the IMF. The government is investing in expanding its rail infrastructure and advancing its solar projects throughout the country. A new city is being built about 40km East of Cairo and is planned to replace the capital. The presidential complex as well as 34 ministries are planned to move to the new city, that eventually will be home to at least 6.5m people. The government wants to start running the country from the new city by mid-2020, but the US$58bn project has struggled to attract foreign direct investment outside of the oil and gas industry after investors have pulled out. 

Sharm el Sheikh has been slowly recovering from the terrorist attacks and the attack on the Russian plane in 2015 and confidence has been slowly returning, thanks to a massive security presence and upgrades at airports and key tourist sites and a restriction against militant groups in the Sinai. Most European countries resumed flights to Sharm el Sheikh, except the UK.  “Direct flights from Britain to Sharm el Sheikh should resume” said that the Egyptian ambassador to the UK. He has finished working with British security teams to upgrade the countries airports.

Accorhotels has recognized the increasing demand for the Red Sea destination and is planning to open six hotels within the next four year with a total of 1834 rooms. Swiss Inn Hotels & Resort opened one property in Sharm el Sheikh at the end of last year.

RevPAR in the market has grown for 33 consecutive months and absolute ADR and RevPAR levels have been the highest ever recorded for a July this year. Occupancy has increased by 10pts, ADR by 21.1% and RevPAR by 49.0% from July 2018 to July 2019, which makes it the success story of this year. As the city is recovering, hotels’ performance and values are both growing significantly. Hotel values grew beyond US$50,000 per room in 2018 and are expected to increase further beyond 2015 levels in 2020. The increase in supply in 2021 may have a negative impact on hotels performance; however, it just proves that investors and international brands are confident in the market to start investing again.

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
2015 38.80
2016 17.80
2017 22.00
2018 32.80
2019 (f) 46.00
2020 (f) 58.30
2021 (f) 58.00

For more information, please contact:

Tim Smith, MRICS
[email protected]
  • +27 797 342296 (w)
Rishabh Thapar
[email protected]
  • +27 0 792790584 (m)
Laura Dutrieux
[email protected]