Hospitality Scene

Written by: Heba El Dessouky, Ph.D.

Date: 2024-03-05

The Way Forward in Real Estate 2024

“Egypt has long maintained its unique position on the global tourism map. With that in mind, there's a shift in focus from the government to improve the hospitality sector. So, we all noticed that real estate developers are now increasingly diversifying their project portfolios, putting their weight behind projects in the hospitality sector and a great comeback to international operator portfolios. With anticipated growth in TOURISM targeting the 40 million tourists by 2030, the HOSPITALITY SECTOR emerges as a promising investment avenue despite various inherent risks. Egypt has been working on expanding the capacity of its hotels. As of 2022, the country received the highest number of international tourists on the African continent, mainly attracting European and interregional tourists from Arab states. With regards to international tourism receipts, Egypt also ranked highest in Africa, with 12.2 billion U.S. dollars in 2022. Additionally, industrial and logistics hubs align with government plans, making them attractive investment options for most developers in the current landscape especially at the new Alamein – north Coast. Egypt has recently eased Visa requirements for several counties including China, Iran, India, Turkey, Morocco and Algeria in an attempt to boost tourism. This sector recovering over the last two years and increasing from 8 million in 2021 to almost 14 million in 2023 is a key source for hard currency for the country. Emerging Hospitality Sector in Real Estate. As work on infrastructure projects across Egypt continues in full swing, the real estate sector has witnessed an unprecedented boom across residential, retail, and commercial segments throughout this past year of 2023. Lately, real estate developers are also turning their gaze towards advancing and diversifying their funds towards anchoring a hospitality sector throughout a variety of development projects creating a unique and elevated community lifestyle to their developments. This is also considered an innovative rental solution for the hospitality branded residences in the investment side for customers. This Increased diversification is hospitality industry can be seen throughout the rise of niche Hotel brands, serviced or Branded apartments and the shared Airbnb or Boutique models are also key here. Around 90% of the top 20 market leading Developers have announced international hospitality offerings through 2023 with various international brands offerings across west Cairo and northern coast, where they maximize revenues and operational efficiencies as well as upscaling their niche of the revenue and ROI of their developments through hotels, branded and serviced residences to compliment.


New shifts in Central and WEST Cairo

As per Reuters latest article in end of January, Egypt’s Sovereign wealth fund is finalizing a masterplan to revamp Cairo historic center now that the government ministries have largely moved to the new capital in the east side, it hopes to break ground on these vacated properties within months: Tahrir square’s colossal Mogamma building, the interior ministry compound and the former Nile-sided ruling national democratic party headquarter building NDP. All the three will be repurposed. The area modeled on Paris back in the 1860’s is filled with elegant but crumbling buildings but currently three prime properties in central Cairo with the support of the European bank for reconstruction and development are helping to draw them into iconic multiple uses serving tourism. The real highlight in west of Cairo this past year was the its promising location for a TOURISM HUB setting the ground for a strategic location for ample hospitality opportunities serving quite an array of demand from both local and foreign guests. This makes it a very attractive prospect for any developers and investors which highlights the potential niche of real estate success in the West side of Cairo. The accessibility matrix for this side of Cairo with a new Sphinx airport as well as the monorail route and train connecting the red sea to the Mediterranean has definitely shifted the game along with the new investments at the Pyramids and opening of the Grand Egyptian Museum.


Latest Key Trends

Key trends in the hospitality field are rotating around Wellness and digitalization: as an increasingly important factor in the hospitality sector worldwide. Wellness programs in hospitality is not a trend anymore its part of any global hotel to focus on the wellbeing of its guests whether in the design components related to F&B nutrition, fitness, wellness, social retreats, intellectual practices, healing, spiritual practices, energy retreat, etc. Businesses are using digitalization to not only simplify processes and reduce workloads. But also, to cut costs, boost customer satisfaction, and expand revenue generation opportunities. The operators are moving away from simply collecting data to engineering and analyzing the vast amount of data efficiently into actionable decisions and gaining an edge over competitors.

While the global tourism sector is still 12% below pre-pandemic levels, Saudi Arabia’s growth reflects the kingdom's efforts to bolster its position as a touristic destination within the MENA region, especially as it highlights destinations of wellness and heritage as ALULA & Diryah as well as major events like Saudi Grand Prix and world-class concerts.

Sustainable Hospitality 

As the local population rapidly grows and quality of lodging at coastal areas – specifically at Egypt’s hot spot: the north coast, the appetite for quality accommodation among younger generations continues to grow exponentially as the Egyptian lifestyle as a consumer trend behavior has been always directed towards the Mediterranean side rather than the red sea destinations, it is important that hospitality businesses think about providing and catering for this demand positively and with a sustainable approach. There are many ways in which the hospitality can reduce its environmental impact and help conserve the environmental & social pillars.

The importance of applying sustainable practices in hotels can't be overstated, since investing in the hospitality industry should be approached with a forward-thinking mindset and a strong focus on long-term growth and sustainable, profitable returns of investment through conservative energy consumption technologies. We have seen this initially in Siwa, Fayoum as well as in Sinai developments. The aim of sustainability in this sector that would be able to serve surrounding communities while uplifting the local economy through encouraging and promoting eco-friendly modes of mobility and transportation as well as reducing waste collection and promote recycling concepts and local programs for craftsmen that promote conservation, heritage, and local productions and services.

“What's important to bear in mind is that we no longer just develop hotels; we develop destinations with character, the benefits, in the long run, cannot be disputed, because adopting a sustainable approach when investing in tourism is what makes guests return back with more plans and longer stays.

Investment in tourism is crucial to economic development, playing a growing role in creating jobs, driving growth, and fostering several construction and consultancy sectors that compliment throughout years of Hotel construction and Design. Tourism is a leading economic driver for most countries around the world. The world travel and Tourism council announced that the hospitality sector's contribution reached 8.8 trillion USD in 2022, contributes to 8% of employment around the world and around 330 million jobs worldwide, and with a country like Egypt, the latest 2023 statista report shows the economic contribution of travel and tourism to GDP is around 8% and considering that Egypt has quite a number of World-renowned touristic attractions, including 2,000 archaeological sites and six UNESCO world heritage sites, this contribution to the national income should optimistically increase with all stakeholders' support in these coming years.

The Future of Hospitality 

The future of hospitality in real estate development can only be visualized from the “Bigger Picture” it is shaped by emerging trends and technologies that focus on personalization, convenience and sustainability and guest satisfaction as well as the right brand collaborators.


Heba El Dessouky, Ph.D.

Hospitality Development Director

Suggested Articles