In an unexpected turnaround, Cairo hotels seem to be making more from less. Here is the quote from an Egyptian based business news service:
“Egypt’s economic recovery is driving hotel business up, as Cairo’s hotels witnessed a 42.4% year-on-year increase in profit per room during the month of May, despite an 8.9 bps (?) drop in occupancy rates to 63.6%, HOTSTATS reveal in their latest Middle East and North Africa chain hotels review (pdf). The drop in occupancy rates was offset by a nearly 73% y-o-y increase in average room rates, which recorded USD 97.51 during May. “As a result of robust top line performance, profit conversion at Cairo hotels remains strong at 53.5% of total revenue,” well above the MENA region’s average 36.7%.”
Assuming the figures are accurate, a very big ask in Egypt, it either means that the Egyptian hotel ‘managers’ have got costs under control or the tourists are paying higher prices for rooms compared with the recent past. I’d not back the ‘good management’ theory.
Surely a good thing. A reasonable number of high paying tourists rather than hordes of cheap-skates. It would be interesting to know whether these green shoots apply to other Egyptian tourist destinations. A slight caution. Given they quote an average of $US97 per night I assume their figures are about Cairo 5 star and maybe the upper 4 star market - so this improvement might only be in a small sector of the total hotel market and generalizing from this to the total Cairo market a bit hazy. By way of contrast, in Luxor a $US97 average would apply to very few hotels.
Money can be made in a bad market plagued with terrorism news– maybe. If the 53.5% ‘profit conversion’ is their margin – its very high – but Egyptian accounting is a religion with a lot of inscrutable mysteries known only to initiates.
http://enterprise.press/#tldr-story-01 (a new, very well written, Egyptian business news aggregator and comment site, skeptical and witty)
Related news from the same source: “Egypt and Greece are the top two destinations for German tourists this summer, with Turkey, Croatia and Portugal trailing closely behind, according to German tour operators, Tornos News reports. Demand for Egypt is up 30%, Thomas Cook’s Stefanie Berk says, “as German holidaymakers regain confidence in the destination.” With Greece overbooked as well, “German clients are booking summer holidays instead in Egypt, Tunisia and Turkey.”
Bring on the well-heeled, well-mannered and plucky Germans. Continued Russian home detention may not be an entirely bad thing from an Egyptian point of view or for other tourists.
