The Cairo and Sharm El Sheikh markets have experienced the largest year-over-year (y-o-y) improvement in occupancy in year to date (YTD) 2019. Over the same period, the coastal cities have achieved an improvement of over 20% in the average daily rate (ADR), according to Colliers Internationale's Mena Hotels Quarterly Review for the third quarter (Q3) of 2019. The report said that supply in major Egyptian markets has grown at annual average of 3%. This has accompanied a diversification of key source markets resulting in growth of demand in the last three years. Considering the low occupancy in coastal cities in 2016, the market has been able to absorb the returning demand with minimal added hospitality supply. "YTD 2019 is marked by the coastal markets continued improvement, with the Alexandria market recording a 23% increase in ADR y-o-y performance and the Sharm El Sheikh market achieving a 9% improvement in occupancy over the same period," the report read. "In Hurghada, Rixos Hotels is developing a 1,600 square km luxury resort, projected to open in 2020." Colliers noted that the improved performance in fiscal year (FY) 2019 is expected in all Egyptian markets. Sharm El Sheikh is on track to end the year with the largest y-o-y improvement in occupancy of 15% accompanied by a 17% growth in ADR. Occupancy change in Sharm El Sheikh hotel market YTD in 2019 recorded 9% compared to 20% YTD in 2018, meanwhile, ADR change in Sharm El Sheikh reached 23% YTD in 2019, compared to 24% YTD in 2018 The announced Rixos Makadi Heights is expected to redevelop an existing 1,100 keys and then expand further to create a 1,636 square km megaresort. This property currently accounts for 25% of the announced branded supply to enter the Egyptian market in the next three years, the report elaborated. The report highlighted that the occupancy change rate in Cairo registered 6% YTD in 2019, compared to 2% in FY 2019, moreover, occupancy change in Hurghada hotels is 21% YTD in 2019, compared to 23% YTD in 2018 and 19% in FY 2019.
