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Analysis

Another hard blow for Egyptian hoteliers

While international occupancy at the destination fell by 32.4% in March 2014, data collected by MKG Hospitality s a drop by 26% in Revenue per available room on the period for hoteliers.

The Egyptian national press agency Mena published the most recent figures for Egyptian tourism, which reflect a new drop by 32.4% in international occupancy. In March 2014, only some 755,000 foreign tourists arrived at the destination, versus more than a million during the same period last year. This drop is translated by a decrease in hospitality revenues in the country. Data collected by MKG Hospitality thus shows a 26% contraction in the Revenue per available room for properties on the period, which may be attributed to the 11.7 point drop in occupancy rates and 5.5% drop in average daily rates.

Beach resorts on the Red Sea and cities in Sinai have been particularly touched by the drop in activity, after the attack on a buss of Korean tourists that happened in the region in February and the stiffening of recommendations from the different ministers of Foreign Affairs that followed. The areas that were the most plus impacted by the absence of international tourists in March are thus Hurghada (-41.4% of the RevPAR), Sharm El Sheikh (-36.5% of the RevPAR) cities on the Sinai Peninsula (-49.2% of the RevPAR).

These results illustrate the impact that security issues may have on tourism-related activities at a destination. This new drop observed in Egypt in March is all the more significant since it occurs within a difficult context for the local hotel industry (see our article). On the first quarter overall the Revenue per Available Room in the country showed a new slump by 20.4%, resulting from the 5.8 point drop in occupancy rates and 10% drop in average daily rates.
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