REPORT FROM NORTH AFRICA—Egypt, Morocco and Tunisia have been almost completely stripped of international tourists since the beginning of the pandemic, but some hoteliers are beginning to see the light at the end of the tunnel.
The pandemic took a particularly heavy toll on the Egyptian hospitality industry as the steepest declines in hotel occupancy came in the main tourism destinations of the Middle East and North Africa during the first half of 2020.
The Egyptian tourism sector reported 21% growth in 2019, welcoming 13.6 million visitors, according to the United Nations’ World Tourism Organization. This figure has more than doubled during the past three years, prompting hoteliers to rapidly expand the country’s hotel room capacity.
With international flights suspended in March when the coronavirus was officially declared a pandemic, most of Egypt was closed until July, during which hotels were mostly empty.
“Speaking for the Red Sea region, which relies mostly on international guests, except during local peak periods and holidays, the worldwide flight bans starting from March 2020 had a tremendous impact on the hospitality industry,” said Lars Pursche, GM of the Kempinski Hotel Soma Bay, who added his hotel closed its doors from the end of March until the end of July.
Between January and October 2020, average occupancy at Egyptian hotels totaled 28.6%, down 63.8% compared to the same period of the previous year, according to data from STR, the parent company of Hotel News Now.
The Egyptian government has limited occupancy in each hotel to 50%, even during local peak periods that could bring potentially more revenue, Pursche said.
He added that the absence of foreign visitors also has forced hoteliers to adjust average daily rates to attract limited domestic tourism.
“There is certainly a noticeable decrease in all hotels’ room rates in the region, the extent of which is varying depending on each hotel’s customer base,” Pursche said.
Hoteliers are hopeful that COVID-19 seems to be under control in Egypt and international flights gradually are resuming. Egypt has already resumed regular flights with Russia, its most important market, and some other European markets. The Egyptian government has also opened its famous pyramids and other important visitor sights.
Hotel occupancy rates in Egypt are expected to rebound in 2021, with hotels in Cairo projected to have occupancy of 65% in 2021, while occupancies at hotels in Sharm El-Sheikh, Hurghada and Alexandria are forecasted at 43%, 48% and 62%, respectively, according to Colliers International.
In the same shoes
In Morocco the picture is similar, with hoteliers also looking forward to a rebound in 2021.
“We lost 75% of our foreign tourists compared to last year,” said Mehdi Bennani Smires, GM of the Sirayane Boutique Hotel & Spa in Marrakech, which reopened in October with lower occupancy but unadjusted ADR.
To some extent, domestic tourism has supported local hotels, he said.
Average occupancy in Morocco stood at 18.8% between January and October, a decline of 72.1% compared to the same period in 2019, STR data shows.
International flights also have returned to Morocco, with European low-fare carrier Ryanair restarting 58 weekly flights on 45 routes to Belgium, France, United Kingdom, Italy, Germany, Spain and Portugal.
Hoteliers are feeling that the worst might be over.
“The winter season depends on open skies and the end of the lockdown in Europe. All in all, we are getting more confident that the situation will become better starting from March,” Smires said.
In 2019, Morocco received a record 13 million tourists, up 5.2% from the earlier year, with its tourism flow steadily growing during the past few years.
“We are closed since 17 March, dying slowly with absolutely nobody seeing that,” said Nathalie Rousseau, owner of the Zwin Zwin Boutique Hotel & Spa, also in Marrakech, referring to what she sees as a lack of government aid to the Moroccan hotel industry.
In Tunisia, hoteliers are even less optimistic, expecting foreign visitors to begin returning only around mid-2021.
“Our occupancy rate was about 80% year-round before the pandemic, but since the first lockdown, it is less than 2%. We have adjusted our prices, negotiated our contract with our (online travel agency), but more importantly, we are trying to develop new services for the local market. Survival is the new growth, so we are very open to customize and adapt our work to new kinds of demand,” said Leila Ben-Gacem, owner of Tunis’ Dar Ben Gacem Hotel.
Also for the months of January to October, Tunisia hotel occupancy was limited to 22.9% on average, 65% lower than during the same period of the previous year, STR’s data shows.
A lot of hotels in Tunisia have been shut, and domestic tourism is creating a demand for only small units on the seafront or rented, large homes with swimming pools, Ben-Gacem said.
“Many airlines put flights to Tunis on halt, and I don’t think they will come back until next summer,” she said.