Hotel operators and investor align their services to cater to evolving demand traits
Cairo, Egypt - In spite of socio-political uncertainties, Cairo's tourism and hospitality market has shown strong resilience over the last year, recording high inflows of international visitors and increased hotel performance levels. The Cairo Hotel Market Snapshot, issued today by Colliers International, a global leader in real estate advisory, provides a snapshot of the key factors impacting the market, outlining emerging trends and anticipated future demand traits.
The market witnessed widespread corporate demand in the last year given the Suez Canal expansion. Hotels in Downtown Cairo, a primary corporate market, achieved the highest growth in occupancy levels, increasing at an annual rate of 44% between 2013 to 2015. Performance for serviced apartments in Cairo also registered strong growth with occupancy levels above 75% in 2015, largely due to the city's limited supply and growing economy.
Commenting on the results, Filippo Sona, Head of Hotels at Colliers International MENA explained: "We have seen a distinct shift in both the source market and segmentation that is driving demand in Cairo. Whereas historically, international, mostly Europeans, visiting Cairo for leisure purposes have been a key driver of the market, GCC nationals visiting either for leisure or business are now a key component. This represents a number of opportunities for hotel operators and investors who would benefit from aligning their services to cater to the evolving demand traits."
The report highlights the opportunity that mid-scale hotels and serviced apartments represents in an increasingly price sensitive market. While the upcoming pipeline is dominated by capital-intensive luxury hotel developments, such as The St. Regis (292 keys), The Address Uptown Cairo (300 keys) and JW Marriott Hotel Cairo (90 keys), 3 or 4 star branded hotels targeting regional or domestic tourists remains undersupplied.
"Although the corporate segment is a key driver at present, our research indicates that the leisure segment will grow in prominence in 2016, albeit from the GCC, sub-continent and domestic market. The development of hotels to cater to their needs is a segment on which hoteliers are currently focusing as they work to regrow their base of demand."
The report points to the announcement of a number of hospitality and mixed-use masterplans as a key element driving demand towards Eastern (New Cairo) and Western (Giza and 6th of October City), owing to the extensive leisure and meeting facilities that the new urban resorts provide.
"We have seen a significant increase in the number of large mixed-use developments slated to break ground in the near future. These developments have the potential to increase leisure demand in the mid/long term as they offer additional leisure and retail services which will help attract both tourists and local residents," concluded Sona.
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CONTACTS
Asia Hildebrand, Marketing & Communications Manager, +44 7481 606 767 asia.hildebrand@colliers.com
Inci Gecekusu, Associate Marketing & Communications Manager +971 55 763 3737 Inci.Gecekusu@colliers.com
© Press Release 2016
