BUSINESS
MARKET UPDATE
Egypt appears to have fostered economic growth and an improvement on its fiscal deficit despite the country’s high inflation rate. This was achieved in part by austerity measures imposed by the Egyptian government.
CAIRO Five years after the implementation of comprehensive economic reform, Egypt’s macroeconomic indicators are starting to show sustained improvement. Maximilian Quack, senior manager for the Middle East and Africa at HVS, delves deep into Egypt’s tourism market.
Although Covid-19 significantly impacted the global economy, Egypt experienced a 3.5 percent growth in real GDP in 2020 as a result of structural reforms implemented over the past few years together with the country’s efforts to mitigate the pandemic. Over the last decade Egypt has faced many economic downturns, many of which were triggered by political unrest or terrorism, such as the Arab Spring or the attack on a Russian airplane in 2015. The country has displayed incredible resilience in coming back stronger from these incidents with tourism numbers recovering within 12 to 24 months. Driven by its strategic location, favorable climate and ability to attract tourists, the country has managed to bounce back. This resilience is key to potential investments in Egypt’s tourism industry. The upcoming supply of branded properties in the market reflects the confidence investors have. Equally, the government’s commitment to development projects, including the opening of new airports as well as the expansion of existing ones, signals commitment to growth and confidence in the country’s tourism sector. The following government strategies are aimed at developing further both international and domestic tourism: • Marketing strategies to widen tourism source markets across Europe, mainly focusing on Eastern and Southern Europe • Liberalization of the Egyptian pound has caused currency devaluation and made the destination more attractive for budgetconscious travelers • An increase in airport capacity, mainly in the Cairo-Giza region • The opening of new airports: Sphinx International Airport and Katamaya International Airport
Tourism spending Nearly 88 percent of tourism spending in the country is generated by leisure travel. Business travel spending is expected to reduce as companies try to recover. Moreover, the lockdowns and travel restrictions have enabled business travelers to rethink their travel needs with the help of technology.
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HOSPITALITY NEWS ME | APR - MAY 2021
