Cairo's hotel market is continuing its upward trend, according to property consultancy JLL's latest Cairo Real Estate Market report.
The sector recorded revenue per available room growth of 14 percent in Q3, while occupancy reached 73 percent in the year to August, compared to 70 percent in the same time period for 2018. This is reportedly the highest level for the metric since 2008.
This continues last year's trend, when hotels in the greater Cairo and Giza region reported occupancy growth of 11 percent to 72.5 percent, according to STR. In Q1 this year, the hotels in the region reported occupancy growth of 6.8 percent to 78.2 percent.
Average daily rates grew to $104 in the year to August 2019 (almost 10 percent higher than those of August 2018). JLL's analysts credit the 14 percent RevPAR growth to this improvement.
"As the economic situation in Cairo is recovering and the Egyptian pound is strong, we are witnessing healthy demand levels across all the sectors of the market," said Ayman Sami, country head of JLL Egypt. "We expect to see an even more-healthy economy in the months to come as government initiatives and large-scale tourism projects continue to boost demand and drive investment in the market."
Tourism Drivers
The report comes just as the U.K. has lifted its four-year ban on flights to Sharm El Sheikh and Hurghada. Tour operators will be able to sell package deals to the resort destinations and the city alike, and the expansion of the recently opened Sphinx International Airport in western Cairo is also poised to facilitate visitor growth to the capital.
The report noted recent renovations of tourist attractions like the Baron Palace are boosting Egypt’s tourist appeal. The "long-awaited completion" of the Grand Egyptian Museum (due to open before the end of 2020) and the proposed Disneyland on the North Coast (with investment of $3.3 billion from a U.S./Saudi consortium), is expected to further support the hospitality sector in coming years.
New Developments
There were no new hotel openings in the quarter and the city's room count has remained steady at 23,500. JLL credits this to "developers turning their attention to resort destinations elsewhere in Egypt."
But that doesn't mean no new projects are underway. West Cairo is poised to become the tourist hub of the capital, the report noted, and the neighborhood has several new hotel developments in the pipeline. The Hyatt Regency Cairo West (Al Dau), for example, slated to open in Q4 2020 adjacent to the Grand Egyptian Museum, will add 242 rooms to the city's portfolio.
Looking ahead, JLL's analysts expect the city's hospitality sector to do well, thanks to limited incoming supply and increasing visitor numbers. "On the back of these healthy performance metrics, promotional campaigns abroad and regulatory reforms within the industry in Egypt, we remain positive in our outlook for the sector," the report said.