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Research and Markets: Egypt Tourism Report Q3 2011 - In April 2011, Hilton Worldwide Opened the 164-Unit Hilton Zamalek Residence Cairo, Overlooking the River Nile

The Egypt Tourism Report provides industry professionals and strategists, corporate analysts, tourism associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Egypt's tourism industry.

Tourism Overview

The latest official data show the extent of the downturn in tourism in the wake of the political crisis earlier in 2011. Although total tourist arrivals were up favourably in January, by almost 9% year-on-year (y-o-y), visitor numbers fell 80% and 60% y-o-y respectively in February and March 2011. The sharp falls were largely the result of an 83% y-o-y decline in arrivals from European source markets in February and a 68% fall in March. Visitors from Middle East countries also declined 71% and 31% y-o-y respectively over the same two-month period.

Hospitality

Early indications of the severe fallout for the hospitality sector from the recent political crisis come from official figures for Q111. Despite total tourism nights increasing a strong 18% y-o-y in January, overnight stays fell more than 50% y-o-y in February and an even larger 65% y-o-y in the following month. With regard to the key source region, nights attributed to European tourists declined around 60% and 70% y-o-y respectively in February and March. Reports indicate that hotel occupancy rates picked up somewhat in April, but rates in the key Red Sea resorts of Hurghada and Sharm el-Sheikh remained less than 40%. Cairo also continues to lag behind the rest of the country, with mostly business visitors to the capital.

Bird Flu Update

Since the last report there has been a relatively sharp increase in the number of human infections and deaths in Egypt caused from the H5N1 (bird flu) virus - although the absolute numbers remain quite low. Figures published in May 2011 by the World Health Organization (WHO) show Egypt has confirmed 47 human deaths caused from the virus (seven new deaths since February), out of 143 (previously 122) known human infections in the country, the largest number outside Asia.

Forecast Scenario

Although the dominant threat to tourism is political unrest, moderate economic recovery in major source markets should help tourist numbers recover in the latter part of 2011. In the eurozone, BMI revised forecasts are for economic growth of 1.8% in 2011 (up marginally on growth in 2010), with the same growth rate expected in 2012. Outside the eurozone, the revised economic growth forecasts for the UK - a key market for inbound tourism - stand at 1.7% and 2.2% in 2011 and 2012 respectively (after growth estimated at 1.3% in 2010). An added concern for the sector is regional political instability, particularly in neighbouring Libya, which will add to the perceived risk of holidaying in Egypt. Taking account of the most recent tourist data, BMI have revised our forecast for foreign tourist arrivals in 2011 and now expect an annual fall of around 20%. Assuming political stability returns to Egypt, full recovery in the sector, meanwhile, is unlikely to take place until 2012.

Hilton Worldwide

In April, Hilton Worldwide opened the 164-unit Hilton Zamalek Residence Cairo, overlooking the River Nile. Hilton has a management agreement with Cairo-based Safir El Zamalek Hotel Company on the hotel, which underwent considerable renovation. Hilton plans to add a number of other properties over the next few years to its portfolio across the country, underpinning the confidence it has in the Egyptian tourism market.

Companies Mentioned:

• EgyptAir
• Egyptian General Company For Tourism And Hotels (EGOTH)
• Travco

For more information visit http://www.researchandmarkets.com/research/1a5b06/egypt_tourism_repo

Research and Markets
Laura Wood, Senior Manager,
press@researchandmarkets.com
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