Investing in Egypt's Real Estate Tourism Sector

There’s no doubt that there is a strong benefit that arises from the interaction between the real estate and tourism sectors, emphasizing the necessity of achieving clear integration between the two sectors, and making it challenging to separate them. This integration is particularly evident in the current situation in Egypt, where the country has experienced a significant influx of foreign investments in recent years. Egypt is now a genuine gateway for foreign investors, holding a leading position in the list of globally accessible and flexible investment destinations, thanks to the policies and measures taken to stimulate and develop the business world in the country.

What is real estate tourism and touristic property?

Real estate tourism is a type of real estate investment targeting tourists. Also known as real estate designed to attract tourists or foreign investors.

Touristic property is defined as a property purchased to provide tourism services. This type of real estate is characterized by some specific specifications, such as its location in coastal cities where beaches are available, as well as in popular business cities and areas that require continuous touristic services.

Read more: Real Estate Exporting: Its Role in Revitalizing the Real Estate Sector in Egypt

Egypt has significant potential in the field of real estate tourism, possessing numerous tourist attractions that attract visitors from all around the world, including:

● Its distinctive geographic location situated at the crossroads of Asia, Africa, and Europe.
● Its rich history and culture hosting numerous archaeological, historical, and cultural sites.
● Diverse landscapes, encompassing coastal, mountainous, and desert regions.
● Moderate climate, characterized by a mild winter and a hot, dry summer.

Real estate tourism in Egypt mainly focuses on coastal areas, such as the Red Sea and the Mediterranean, where luxurious touristic resorts are widespread. Mountainous regions, such as Sinai and southern Egypt, are also receiving increasing attention from investors, as they are distinguished by their picturesque nature and the diversity of recreational activities they offer.

Read more: Where do Tourists Live in Egypt: Destination Map for Expats and Foreigners

The Egyptian government’s plan for tourism investments:

The Egyptian government is currently working on attracting investments in the tourism sector and increasing the number of hotel rooms exponentially during the coming period to reach 500,000 rooms, compared to the current situation of 200,000 rooms. This is expected to increase the number of tourists coming to Egypt to about 30 million annually, thus increasing the sector’s revenues to $30 billion over the next five years.

According to statements by the Egyptian Minister of Tourism, Ahmed Issa, in July 2023, Egypt received about seven million tourists in the first half of this year, a number considered the highest in the country’s history for this period.

And according to another recently published report, Egypt is expected to witness a tourist influx of 15 million visitors by the end of 2023. The study revealed that hotel occupancy rates in Cairo rose to 68% in August 2023. This represents an increase over the percentage recorded in the same month in the previous year which was 61%.

Read more: Changes to Egyptian Law Allows Foreigners to Own Residential Real Estate

Profits of real estate companies in Egypt:

Real estate companies in Egypt achieved million-dollar profits during the first half of this year. Talaat Moustafa Group's revenues in the hotel sector increased by 111.04%, leading to an increase in net profits by 40.2%. Emaar Misr also witnessed a 62.67% growth in hotel revenues, which led to a 12.9% increase in net profits. Misr Hotels Company saw a 134% rise in profits last year, while Orascom Development Company recorded a 117.61% rise in hotel profits, with total revenues growing by 62.2%.

Advantages of tourism real estate investment:

● The main advantage of tourism real estate investment is the impressive financial return, as the price of renting touristic properties differs significantly from renting regular properties.
● Investing in tourism real estate is a great way to earn capital in the near and long term.
● It also contributes to preserving the value of your savings in the long term.

Disadvantages of tourism real estate investment:

● There must be a large budget available in the first stage, whether it is to purchase a touristic property or to establish and purchase an entire hotel, since the prices of touristic properties are fairly high.
● Being affected by political and security events in the country can be an influencing factor.
● The revenues and profits of touristic properties are seasonal.

What is the difference between real estate investment and tourism real estate investment?

In reality, there is no significant difference between one property and another in terms of quality and general nature. However, the main difference between real estate investment and tourism real estate investment lies in the property activity itself. In real estate investment, you rent the property for a fixed amount over time, while in tourism real estate investment, the rent is only seasonal, but at rates that far exceed the cost of renting a regular property.

You can also read about Investing in Administrative and Commercial Real Estate in Egypt

If you want to invest, buy, or rent a touristic property in Egypt, we advise you to deal with distinguished real estate consultants to help you. Contact RE/MAX Egypt through +202 2269 2004 or contact us here.