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Discussing status quo, challenges of hotel investment tourism in Egypt Egypt is ranked second largest branded hotel market in Middle East, third in Africa, says Marriott International president
While tourism is slowly recovering from the crisis following the downing of the Russian Metrojet aeroplane in Sinai in October 2015, hotel tourism has been struggling to survive the deteriorating conditions in Egypt with attempts to re-attract tourists and increase the number of investments in the Egyptian market. As the largest international hotel company operating in Egypt, with 18 hotels and resorts and more across seven brands, including The Ritz – Carlton, JW Marriott, Marriott Hotels & Resorts, Renaissance, Sheraton, Le Meridien, and Westin, Daily News Egypt interviewed Arne M Sorenson, the president and CEO at Marriott International, and Alex Kyriakidis, the president and managing director for the Middle East and Africa at Marriott International. In a round table interview, they discussed the challenges that the tourism sector faces in Egypt and the investment potentials the market holds. The transcript for which is below, lightly edited for clarity: How do you find Egyptian market when it comes to hotel investment, especially after global deterioration in tourism sector? Sorenson: We are gratified that business is coming back really well in the past couple of years. When you look at the performance today compared to 2015, Marriott occupancy increased 50% in top-line hotels, which makes a huge difference in the ways these hotels are performing. We are not back yet to peak levels at all, but we make sure that Egypt grows as a tourism market. Where is Egypt located from touristic market in region? Kyriakidis: Egypt is ranked the second largest branded hotel market in the Middle East, after the UAE, and then comes Saudi Arabia. When it comes to the Middle East and Africa, it comes in third place after the UAE and South Africa. This adds the potentials it holds when it comes to investment. How is Marriot International planning to attract international tourism, especially as tourism is down worldwide? Sorenson: If you look at Egypt's numbers when it comes to tourism, you'll find that the peak in down travelling reaches out to 14 million tourists, and nowadays the number is around 9 million. Hence, you can see that compared to the peak, Egypt is experiencing less tourism today than its potential. However, numbers have been going up significantly in the past two years, which leads us to believe that we will see continuous growth in the upcoming years. When you look at the global numbers in comparison, that last year there were, roughly, 1.3bn trips worldwide, and that number was 6% or 7% higher than it was in 2016, this leads us to believe that 2018 will witness more growth again. The growth is global but mainly coming from China; we have been witnessing increasing in numbers of Chinese who are travelling abroad, and Egypt is among their hitting markets, as they want to see the signs they have been reading about. Does Marriott have any potential in hitting new places in Egypt like Alamein in North Coast, which has become popular in past couple of years? Kyriakidis: Yes, we have been discussing with the Ministry of Housing, in order to establish projects there. But also we are entering cities where we would want to take part of, like Alexandria, and in Upper Egypt, like in Luxor and Aswan. These are our high priorities nowadays. We are currently discussing new projects with several potential partners. How do you see tourism in Sharm El-Sheikh now? And how does current situation affect your projects in there? Kyriakidis: What we are seeing nowadays is a surge of interests in investing in hotels in Sharm El-Sheikh. The challenge we have nowadays in the city is the non-existence of airlifts. We need airlifts to help revive tourism back in Sharm El-Sheikh. We also need to reinvent the city for the future. This means we need to upgrade Sharm El-Sheikh to attract up-scale travellers. We have a lot of investors who want to put money in Egypt, especially from the Gulf now, and they are looking for the places to invest into, but what we need from the government and keep requesting is to open the sky again for airlifts. How did you reach conclusion that you should invest more money in Egypt as a growing potential market? Sorenson: It is not Marriott's only decision to detect the places and markets to invest in. It is development teams and a large scale of connections with partners in the region who decide where they want to invest their money, based on the performance of the market and the future of it. What we do is identifying the places where the opportunities seem to be most right. For example, where the government is moving to build a new city in Cairo, there will definitely be opportunities to invest in the area.
