Verdict is in for Sharm El Sheikh hotels: Demand falls by half

HotStats MENA Chain Hotels Market Review has put the blame on the on-going political and social unrest in Egypt for the dramatic decline in demand for hotels in Sharm El Sheik during the month of September.

“Continued cancelations from tour groups and charters resulted in occupancy levels falling from 73.1 percent last year to 32.6 percent. Although ARR was up 18.3 percent to US$ 43.63 due to higher contracted rates than 2012, RevPAR fell 47.3 percent to $US 14.22. TRevPAR dropped to US$27.00 which was not enough to cover operating costs with a negative GOPPAR of US$ 0.20,” HotStats revealed in its monthly Middle East North Africa report.

It’s not all doom and gloom for Sharm El Sheik, however. HotStats also pointed out that although September was a bad month for hotels in the Rea Sea destination, the year to date figures remain positive with occupancy and ARR at 58.5 percent and US$ 45.95 respectively. “Other key performance indicators including RevPAR and GOPPAR remain stronger than 2012, however the recent events have resulted in a very fragile operating environment,”

“Sharm El Sheikh hotels suffered a significant drop in demand during September as a result of continued cancellations from international travel agents, tour groups and charters,” Peter Goddard, Managing Director of TRI Hospitality Consulting in Dubai. “Although the market has been relatively isolated from events in Cairo, the current unrest has been seen as a nationwide issue, impacting tourism throughout the country.

The outlook for the rest of the year isn’t looking good ether. Goddard said, “With no signs of improvement on the horizon for the political landscape of Egypt, the key markets of Sharm El Sheikh and Cairo are likely to face depressed performance for the remainder of 2013.”

What exactly is going on in Egypt? A US tour operator who has had a long history of doing business in Egypt spoke to eTN last month to give us his perspective on what is going on in Egypt. Who is to blame? Listen to the audio interview below for his answer.

eTN 2.0 is your connection to the industry! We are integrating platforms to bring you the latest developments in global travel and tourism. You are no longer just a reader, partake in the discourse on issues that matter to you by connecting with the author. Contact Nelson Alcantara via email at [email protected] to get connected with HotStats and/or Egypt’s Ministry of Tourism.