September 05, 2016

Hotels in Sharm El Sheikh and Hurghada shift their marketing strategy to grow their Eastern European travellers

Hotels in Sharm El Sheikh and Hurghada shift their marketing strategy  to grow their Eastern European travellers

Colliers International has released its Egypt Quarterly Review & Forecast for 4 key cities. The market in Cairo presents opportunities within midscale hotels while hoteliers in Hurghada and Sharm El Sheikh target Eastern Europeans.

The report analyses supply and performance of the hotel markets in Cairo, Sharm El Sheikh, Hurghada and Alexandria for the second quarter of 2016 as well as gives market outlook for these cities.

Cairo has historically experienced delays in hotel development, with a number of planned projects placed on hold indefinitely. The city’s pipeline is cantered around 5-star room stock. Royal Maxim Kempinski tends to benefit greatly from local demand based around staycations who are seeking a weekend getaway. The limited presence of these asset classes offers owners and investors an opportunity to target this market gap.

Unbranded and locally branded properties in Sharm El Sheikh continued to face closures in Q2 2016, given the bleak performance levels. As the volume of international guests continues to decline, hotels aim to stimulate demand from local tourists. Investors should have a long term view in mind and build assets which are able to target the domestic and regional leisure markets, as existing properties in the city are mainly focused on international travellers

ADR (Average Daily Rate) in Hurghada is expected to witness a growth in 2016, given the increase in domestic guests to the destination. However, much like Sharm El Sheikh hotels, hoteliers in Hurghada have shifted their marketing strategy in order to grow their eastern European travellers base due to travel restrictions from western European countries.

Domestic corporate demand in Alexandria has seen growth and is now a key source market segment. The demand is generated by Egyptians and GCC (Golf Cooperation Council) nationals accounting for 72 percent of total demand. On the other hand Alexandria is diversifying its segmentation towards targeting leisure guests as well, given the presence of beach access.

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