The hospitality industry in Egypt is booming as the country is witnessing a significant increase in hotel projects, primarily represented by five- and four-star properties, a new report said.

According to the Colliers International Egypt Quarterly review report, Cairo's hotel sector is expected to see the highest increase in hotel rooms, with an expected entry of 2,624 keys between Q2 2017 and 2019.

A number of high profile properties have streamed the market since Q2 2016, including the Steigenberger El Tahrir, Westin Cairo Golf Resort and the recently re-opened Sheraton Cairo Hotel and Casino. The recent five-star hotel additions reinstate the city's growing oppotunity for midmarket hotels.

About 84 per cent of branded supply is currently in the five-star category, representing an opportunity for quality mid-market hotels to enter the market.

Continued growth in occupancy performance is expected as UAE's Etihad Airways boosts frequency of flights to Cairo from Abu Dhabi, increasing visitation from Arab source markets.

Occupancy performance in Q2 2017 was 4 per cent higher than the same period last year. However, ADR remained below last year in USD terms due to the devaluation of the Egyptian pound.

Another city expected to do well is Sharm El Sheikh with 1,881 rooms to open between Q2 2017 and 2019.

Occupancy increased in Sharm El Sheikh in Q2 2017 compared to the same period last year, due to an increase from both the domestic and Arab markets.

This trend is expected to continue over the course of the year. ADR levels, however, are expected to continue to decline in USD terms as price-sensitive domestic demand replaces international demand in the short-term.

The cities of Hurghada and Alexandria also show promises of growth, but much slower compared to Cairo and Sharm El Sheikh. Hurghada is expected see 338 hotel rooms open between Q2 and 2019 and Alexandria will see 166 hotel rooms open during the same period. - TradeArabia News Service