Egypt remains ahead of the curve in hotel development in Africa, and its government’s efforts to boost the flow of foreign visitors in the coming years could keep the country flourishing as a hub of activity.
The investment and development push has been in the making for Egypt's hospitality industry for the past several years.
“Egypt’s hotel industry has experienced a solid rebound following the COVID-19 pandemic, attracting significant investment and witnessing a surge in inventory,” said Maximilian Quack, JLL's senior vice president of hotels and hospitality for the Middle East and Asia.
Egypt welcomed 15.7 million arrivals in 2024, which surpassed 2019’s pre-pandemic peak, Quack said.
Egypt has a development pipeline of 143 hotels and 33,926 rooms, according to the Hotel Development Pipeline Report by W Hospitality Group. That's four times the number of hotel rooms in development in second-place Morocco (8,579 rooms in 58 hotels).
Egypt’s capital Cairo is experiencing a massive hospitality industry boom, with the report adding it has 70 hotels and 17,757 rooms in the pipeline, four times as many as Sharm el-Sheikh, Egypt’s key beach resort, where only 10 hotels and 4,321 rooms are set to open.
In addition to Cairo and Sharm el-Sheikh, major Egyptian destinations such as Luxor, Aswan and the Red Sea resorts of Hurghada have reported strong occupancy, with hotel operators optimistic about continued growth despite increasing hotel supply, Quack added.
Business has been strong for Kerten Hospitality, which manages eight hotels across Egypt, said CEO Marloes Knippenberg.
“We have seen steady growth in occupancy and rates, driven by the rising demand for authentic, experience-led stays,” she said.
Meanwhile, hotel occupancy levels have been slower to recover for Orascom Hotels Management — a subsidiary of Orascom Development Group — which operates 35 hotels in eight destinations across Egypt, said CEO Stuart Leven.
“We have successfully regained our pre-COVID revenue levels. However, occupancy rates have yet to fully match those recorded prior to the pandemic,” Leven said. “Encouragingly, current trends point to steady progress.”
According to CoStar hospitality data, average hotel occupancy of branded hotels in Egypt in 2024 was 64.5%, which lagged behind 64.8% occupancy in 2023 and 66.9% occupancy in 2019. Hotel average daily rate has climbed from 1,328.41 Egyptian pounds ($27.25) in 2019 to 3,354.75 Egyptian pounds in 2023 and 4,964.97 Egyptian pounds in 2024. Revenue per available room has followed a similar path, moving up from 888.51 Egyptian pounds in 2019 to 2,172.81 Egyptian pounds in 2023 and 3,203.28 Egyptian pounds in 2024.
Egypt devalued its pound in 2023 by approximately 40% and since floated the currency.
Playing the right cards
Several factors are laying the foundation for sustainable long-term growth in Egypt’s hotel industry, JLL’s Quack said.
Foremost is the government’s strategic focus on revitalizing tourism under its National Tourism Development Strategy, which aims to attract 30 million tourists by 2028 by expanding capacity and improving tourism experiences.
“The country is prioritizing investments in infrastructure enhancements, such as airport expansions and road improvements and developing new urban centers like the New Administrative Capital,” Quack said.
Quack added that visa facilitation measures and digitized entry procedures also have made travel easier to Egypt, which aims to take advantage of its allure as an ancient civilization.
“Culturally, Egypt continues to leverage its global reputation as a historical and archaeological treasure trove,” he said, noting the July opening of the Grand Egyptian Museum in July.
The Egyptian government's investment in tourism is a big deal, Knippenberg said.
“Investment in its own tourism sector is a strong signal of confidence and a major driver for growth,” she said. “From improving infrastructure to promoting Egypt more broadly as a year-round destination, these efforts are creating real momentum. We’re excited to be growing our footprint in Egypt in line with this national push.”
There's even been an investment push from the private sector, Leven said. He pointed to the establishment of hotelier association Tourist Chambers within the Egyptian Tourism Federation and a commitment to subsidizing 11% of development costs for new hotel rooms. Leven added these measures will not only expand Egypt’s accommodation capacity but also stimulate investment, improve service quality and promote sustainable sector growth.
Hot market
Several obstacles remain on Egypt's path to recovery, including regional geopolitical uncertainties, infrastructure gaps in underdeveloped areas and an urgent need for skilled hospitality staff.
Quack said the Egyptian hotel industry’s vulnerability to external shocks highlights the importance of diversifying tourism feeder markets and exploring new avenues for attracting international visitors.
Climate change is another growing concern in Egypt. Over the past few years, Egypt has suffered brutal heat waves. Last year, the temperature in Cairo rose to 50°C (122°F), which for many unprepared visitors is unbearable.
“Rising temperatures — projected to outpace the global average — could deter tourists, particularly during the peak summer season,” Leven said.
Plus, Egypt's coastal regions — including several major tourist destinations — are vulnerable to rising sea levels and coastal erosion, posing risks to both infrastructure and visitor appeal.
Coral bleaching, water scarcity, increased sea temperatures and degradation of biodiversity are contributing to “potentially diminishing the quality of diving and snorkeling experiences,” Leven said.
Knippenberg added climate change is an important long-term concern that calls for environmentally conscious hotel design and operations.