(Photo by Thoraia Abou Bakr)
The Chamber of Hotels in Sinai requested a delay in the date set to pay the overdue loans for the tourist projects established on lands allocated for tourism development until the end of the current year, especially in Nuweiba/Taba and Ras Sudr.
An official in the Chamber of Hotels said that the lower tourist occupancies in hotels located in this area have affected the construction rates as well as projects over the last four years.
The official, who requested to remain anonymous, declared that investments under construction in Nuweiba/Taba amount to EGP 12bn, while investments in Ras Sudr exceed EGP 20bn.
“Banks delayed the late loans for tourism agencies until mid-year, so the Ministry of Tourism should delay its dues until the end of the year, especially under the circumstances that the Ministry of Tourism is facing,” said the official.
Egypt’s income from tourism last year amounted to $7.5bn, compared to $5.9bn the year before.
The investments established on the tourism development lands amount to EGP 68bn, most of which are located in the Red Sea and South Sinai governorates.
The two areas represent two-thirds of the working hotel capacity in Egypt, whereby total capacity is at 225,000 hotel rooms.
Occupancies in Nuweiba/Taba, and Ras Sudr are barely at 15%, according to the official, which doubled the losses of companies and made them unable to continue their construction operations. The official added that “the companies’ losses due to the incomplete projects in the past four years accounted for at least EGP 10bn”.
The Chairman of the Tourism Committee at the Egyptian Businessmen Association, Ahmed Balbaa, believes that there will not be a significant recovery in the tourism sector this year, expecting that the start of next year will be better.
The Tourism Development Authority (TDA) must not offer any lands for sale in the next period, especially with the current recession, he said. Should the TDA offer a tender, the project must provide a new product to provide a competitive advantage for Egyptians, according to Balbaa.
Investors fear that hotel room prices will maintain a steady decline in light of the absence of foreign tourist flow, according to Nadia Shalaby, Chairman of Utopia for Real Estate Investment in Taba.
Shalaby said: “The hotel has not received any visitors for more than five months now, which poses a great obstacle in paying the dues to public entities, including the Ministry of Social Solidarity, banks, and the Ministry of Tourism for the incomplete projects on halt.”
According to Minister of Tourism Khaled Ramy, reservations for the next winter season will increase by 20%, compared to the same season last year.
Member of the Chamber of Tourism in Marsa Alam Tarek Adham said that it is important to understand that the last period already saw a very low reservation rate.
Adham hopes that spending next year will improve, which will help the growth of hotel income and make up for the constant losses over the past four years.
