| Cairo, Egypt
INTERNATIONAL REPORT—Despite the turbulence of political revolution, the Cairo hotel market will return to normal performance levels sooner rather than later, according to data and sentiment from industry experts.
Performance numbers indicate the Egyptian capital’s hotel occupancy levels have been falling continuously since 29 January, four days after the first demonstrations started, according to STR Global.
But high demand from press and media organizations arriving to cover the news pushed up average daily rates. By the end of February, hotel performance stabilized at very low levels, with occupancy below 20% and average room rates of approximately EGP750 (US$126.79), which is on par with the same time last year, according to STR Global.
Year to date through 7 March, occupancy in Cairo was 38%, ADR was EGP793 (US$134) and RevPAR was EGP299 (US$51), according to STR Global.
STR Global tracks the daily hotel performance from 24 hotels in Cairo.
For these areas, the immediate impact during the recent unrest has been significant, with evacuations, cancelled trips and government travel warnings, said David Scowsill, president and CEO of the World Travel & Tourism Council.
“Egypt was lucky in that Sharm El Sheikh, its key leisure tourism destination, was away from the main focus of the problems in Cairo,” he said. “However, holiday traffic did slow down significantly. To avoid losing business through cancellations, companies offered alternative destinations for customers booked to travel there in the immediate weeks/months of the unrest.”
Future booking data analyzed in late February showed committed occupancy (not including non-revenue rooms) in the Cairo market for February to May was down 62.1% over the same period last year, according to Rubicon.
ADR, however, is looking to increase 17% during the same time period.
“We've been hit very bad,” said Mounir Fakhry Abdel Nour, newly appointed tourism minister, in a story from The National. “But I'm confident that before the end of March, we'll be on track again.”
The spending power of visitors to the country's historic sites accounts for 11.5% of gross domestic product. About one out of every seven jobs in Egypt is directly or indirectly connected to the industry, Nour said.
Previous experience has shown when a crisis is contained within a short period of time that such destinations are able to bounce back quickly, assuming that government support for the industry is forthcoming, the WTTC’s Scowsill said.
“Clearly, it is difficult to know the full extent of the impact on these countries, especially as the situation in Libya continues to worsen,” Scowsill said. “There are also obvious concerns around the impact of the events on world oil prices and the effect that would have on aviation and the whole industry.
“As new governments emerge, we call on them to recognise the importance of travel and tourism.”
More news from Egypt
Egyptian tourism continues to be in the news this week—Nour is attending his first international event at the ITB Berlin travel trade show, at which the country has a large presence. He met with mayor of Berlin, among other travel and tourism officials.
Egypt also will be the partner country for ITB Berlin 2012, according to press reports.
An innovative general session Wednesday at ITB focused on tourism in the Middle East and Northern Africa. The UNWTO secretary-general Taleb Rifai emphasized education, because fear has come from not knowing what is going on in the Middle East, according to a story from Travel Impact Newswire.
The latest uprising in Egypt did not involve foreigners and has not affected foreigners, said Samih Sawiris, chairman and CEO of Orascom Development, an Egyptian and Arab conglomerate. “Hence there is no bitter after-taste, which usually takes longer to clear up. As long as there is no further violence, and the flights resume, the crisis will soon be over.”
Hotels in Cairo did not return requests for comment.
Travel and tourism stats
For North Africa, the total contribution of travel and tourism to GDP, including its wider economic impacts, is forecast to rise by 5.4% from US$77.8 billion (12.3% of GDP) in 2011 to US$132.5 billion (12.8%) by 2021, according to the World Travel & Tourism Council. Travel and tourism is expected to directly support approximately 3 million jobs (6% of total employment) in 2011, rising by 2.9% to approximately 4 million jobs (6.4%) by 2021.
The total contribution of travel and tourism to employment, including jobs indirectly supported by the industry, is forecast to rise by 2.9% from 6,593,000 jobs (12.9% of total employment) in 2011 to 8,762,000 jobs (13.7%) by 2021.
Travel and tourism investment in North Africa is estimated at US$10.9 billion or 7.3% of total investment in 2011. It should rise by 5.9% to reach US$20 billion (or 7.8%) of total investment in 2021.