As Egypt emerges from its tourism downturn, the country's government is taking steps to support hotels affected by the drop in visitors. Egyptian banks are partnering with the tourism ministry to establish a private equity fund that will "revitalize" struggling hotels and restructure the sector’s debts.
According to Rania Al-Mashat, Egypt's minister of tourism, the private equity fund will provide hotels and other travel-related businesses with fresh capital. Back in November, the ministry established a fund for improvements to the country's travel-related infrastructure—including hotels.
Al-Mashat told Daily News Egypt that the ministry is "coordinating with experts" to manage the hotel -development fund, while cooperating with Egyptian banks with the purpose of restructuring the debts incurred from the tourism sector’s establishments.
Improving the country's tourism sector will involve different pillars, she explained, such as institutional and legislative reforms, promotion and marketing activities, as well as infrastructural and tourism development.
The numbers are already improving. According to the 2018 numbers from STR, occupancy in Cairo and Giza's hotels grew 11 percent to 72.5 percent, average daily rate was up 10.8 percent to EGP1,713.35 and revenue per available room increased 23.1 percent to EGP1,242.20.
According to STR analysts, the submarket’s 10.5-percent rise in demand (room nights sold) was mostly a result of tourism recovery, improved security protocols, resumed flights with Russia, and marketing campaigns. ADR growth was helped by the combination of increased guest demand and competitive pricing due to the devaluation of the Egyptian Pound. Overall, the absolute occupancy level was the highest for Cairo and Giza since 2008, while the ADR value was the highest STR has ever benchmarked for the submarket.
Global hotel companies have been paying attention to Egypt's improving tourism sector: In October, Indonesia's Sahid Hotels & Resorts Group started negotiations with the Egyptian Ministries of Tourism and Investment and International Cooperation, as well as private-sector companies for joint ventures, looking to invest in the country's hotel and tourism-education sectors.