Tourism

Emaar to invest in Egypt tourism

August 22, 2023, 12:12 PM

A tourist visits the Pyramids in Egypt — Receipts from tourism jumped to $3.32 billion in the April-to-June quarter from $2.55 billion a year ago

55% of Egypt’s tourists are from Gulf
Emaar plans 3,000 rooms
Founder says Egypt needs 2m rooms

Emaar Properties, the Dubai developer behind the Burj Khalifa and Dubai Mall, is looking to expand into the hotel sector in Egypt, the company’s founder said in an interview.

Gulf tourism is surging on Egypt’s Mediterranean north coast despite the country’s economic crisis.

“The north coast in Egypt has reached development levels in recent years that are beyond expectations, so there is a need to support the hotel and recreation infrastructure,” Mohamed Alabbar told Al Arabiya TV, adding Emaar will increase its footprint to 3,000 rooms.

Five years ago Gulf visitors accounted for around 5 percent of tourism to Egypt but that figure is now nearer 55 percent, he said.

“Egypt has around 200,000 hotel rooms, like the United Arab Emirates, while Turkey has 1.5 million,” Alabbar said.

“Given Egypt’s history and coastline, it has to have around two million hotel rooms at least.”

He added that Egypt’s economic woes should attract investors.

“Now is the best time to invest – the current economic situation will end,” he said, downplaying investor concerns about dollar access.

Emaar will also propose a repurposing of empty government buildings in Cairo.

Soaring inflation

Egypt is facing its worst economic crisis since President Abdel Fattah al-Sisi took power in 2014, with a record 36.5 percent inflation in July and a sharp decline in the value of the currency, fueled by the war in Ukraine.

Living standards have declined and summer power cuts have become normal in Cairo, one of the world’s biggest cities.

A report by real estate consultancy Knight Frank Mena singled out Egypt as an outstanding prospect for investment, describing it as “North Africa’s rising star”.

A family use a lantern in the street during a power cut in Cairo, Egypt — Power cuts have become expected in Cairo during Egypt’s economic crisis

Total real estate investments in Cairo soared to $20 billion during 2022, with $16 billion of that going into the residential sector, and average residential property prices increased around 10 percent during the year, Knight Frank’s Africa Horizons 2023-24 Report said.

The north coast has also become popular as a second home and rental location, fueled by rising interest from Gulf buyers.

“Clearly the weakness of the Egyptian pound, the relatively affordable home values when compared to major cities in the Gulf and the pleasant summer climate on the Mediterranean coast are adding to the country’s attractiveness,” said Faisal Durrani, head of Middle East Research at Knight Frank.

Alabbar said economic expansion in Saudi Arabia, where the government has launched mega-projects in an effort to diversify away from oil revenue, was helping to lift the whole region. Emaar’s Saudi business accounts for 10 percent of the firms’ operations, he said.

The Public Investment Fund, Saudi Arabia’s sovereign wealth fund, bought a 25 percent stake in developer Emaar The Economic City in 2021.

Listed on the Saudi stock exchange, Emaar The Economic City is also developing the King Abdullah Economic City north of Jeddah on the Red Sea coast.