Tourism has long been one of the most attractive assets of Egypt as it offers a variation of activities and backdrops which cater to every traveller’s needs. Whether you are visiting the historical monuments in Cairo, taking a trip to one of the many pristine beaches along the Mediterranean and Red Sea, or discovering the country’s deserts, you will be sure to find a fitting adventure for your break.
The impact of this sector on the economy is extremely significant, contributing 11% of the total GDP in 2017, and accounting for approximately 190.3 billion EGP from direct contributions into the country. This number is estimated to increase at 4% per annum from 2018-2027. In terms of employment, the sector provides around 2,425,500 jobs, equating to 8.5% of the total job market, with this number also due to increase by around 2.3% per annum by 2027.
Due to the myriad options which are available, investing in the tourism sector is both lucrative and relatively risk free. Even during times of turmoil, domestic tourism helped to fill the void left by a reduction in the number of international visitors. Today, Egyptians spend significantly more money on internal travel than they previously spent traveling abroad, which has in turn caused diversification within the sector.
Luxury hotels have long had prominence throughout the country however; other highly promising sectors include niche experiences such as ecotourism, health and medical tourism, therapeutic tours, providing nature and desert safaris, residential tourism, and adventure travel. Though leisure tourism remains the largest market segment, business and conference tourism is also on the rise, as is health tourism, with Cairo as a principal healthcare hub within the region.
During his latest trip to Egypt, Pope Francis voiced his desire to include Egypt as an official Roman Catholic Church pilgrimage destination next year, beginning in May. The Ministry of Tourism has since supported this plan, stating that the path of the Holy Family through Egypt, as they fled from King Herod in Bethlehem, will be part of the Vatican pilgrimage program for 2018. The original trip made by the Holy Family took its members from Bethlehem to the Gaza Strip. They then entered Egypt via the Zaranik Protectorate in Northern Sinai, moving down to central Cairo before finally reaching the Asyut governorate in southern Egypt.
To assist in the replication of this trip, a 25- sight route, (eight of which are archaeological sites) has been prepped to receive pilgrims. They include the Church of Saints Sergius and Bacchus, the Saint Virgin Mary’s Coptic Orthodox Church in Cairo (also known as the Hanging Church), the three monasteries of Wadi El Natrun — Saint Bishoy Monastery, Monastery of the Syrians and the Paromeos Monastery — the Church of the Holy Virgin in Jabal al-Tayr, the Monastery of Al-Muharraq at Mount Qosqam and the St. Mary Monastery in Mount Drenka.
This announcement has the potential to change the tourism sector in the country since it is estimated that it could attract up to 20% of the world’s 2.2 billion Christians. The result of this will be a huge incline in religious tourism which at the moment only accounts for around 3% of the entire sector, and is mainly concentrated around St. Catherine’s Monastery in southern Sinai.
Areas for Investment
1 | Hotels
Currently the country is well-served by five-star properties, however there is considerable room for investment in the three- and four-star hospitality segments. Over the last few years there has been an influx in companies which cater to foreign investors looking to purchase smaller hotels. The existence of such companies offers peace of mind for any investor since they provide consultancy services which cover everything from market analysis to investment strategies.
2 | Residential Tourism
Egypt has much to offer the foreign investor: Its year round warmth offers high rental potential especially for winter sun holidays. This, teamed with its ability to cater to an array of tourists makes any property purchase here extremely profitable. At the same time, investors can enjoy a beautiful holiday home while the property is unoccupied and watch its value increase at a steady pace each year. Guaranteed rental agreements offered by many real estate agents can also prove to be very lucrative and remove the hassle of finding tenants for periods of up to 5 years.
The country also boasts tax breaks (no stamp duty), no capital gain tax on resale, no sales tax, low death succession duty 7% (to transfer property ownership), ease of access to banks (easy to open accounts and to transfer funds) and 0% tax on bank interest, all of which make investment in property undeniably good value for money.
A further advantage is the growing availability of off-plan investment in Egypt (buying property from developers before the building is completed, sometimes even before the foundations are laid), which have proven to be more beneficial to investors in terms of overall net income as the plot of land/property is sold for a fraction of its price upon completion. As soon as the erection of the property has been completed, a profit will be made with purchasers being able to achieve returns between 10-100% in just 24 months. With this type of investment, investors can benefit from an excellent finance structure with deposits as low as 10 – 30% of the value of the purchase being required. The remaining balance is then paid upon completion and can be financed by a mortgage.
3 | Therapeutic Tours
The therapeutic qualities of Egypt have been recognized since ancient Greek times. Rich with a wide range of natural resources, such as hot springs and sea minerals, it is easy to see why this area of tourism is picking up quickly.
Aswan’s dry weather is ideal for enjoying sand bathing during the period of May to September, which is particularly useful for curing various diseases such as rheumatism and rheumatoid arthritis. In Aswan, many hotels have physiotherapy centers manned by efficient and highly trained staff experienced in various types of massage therapy. Moreover, rheumatoid patients can be treated in hot sands surrounded by a calm and beautiful landscape and pollution free environment which also contributes to speedy recovery. Aswan’s year round clear sunshine teamed with its dry weather provides an ideal atmosphere for curing rheumatism and bronchial asthma.
Further south, Abu Simbel, with its high rate of ultraviolet rays and low humidity rate during the period of December to March, also provide a congenial environment for the treatment of these diseases.
Healing springs can also be found across the country from Sinai to Helwan providing countless potential locations for interested investors. Since the focus of therapeutic holidays is to improve the clients’ well-being, the shift can be moved away from luxury, allowing a new business to be less costly in comparison to its counterparts.
4 | Eco-Tourism Adventures
Ecotourism, or green travel, has become increasingly common due to the rising awareness of the negative environmental impact tourism can have on any given country. Ecotourism recognizes these problems and aims to reduce these negative effects as much as possible.
In Egypt, there is a rapidly growing market for this kind of travel, with locals and tour operators taking more of an initiative to protect some of the fragile environments so interesting to tourists.
The Aswan governorate has taken this one step further by creating an entire ‘solar park’ named Benban, which holds 32 power plants, making it the largest private-sector solar photovoltaic facility in the Middle East and North Africa.
Since the very purpose of these projects are to reduce waste and contribute to the local environment, investors can benefit from educated and eager locals who are willing to work with comparably lower wages, the developing renewable energy sector, and the low start-up costs associated with starting eco-lodges.
5 | Medical/Health Tourism
Another rapidly increasing sector within Egypt is that of medical tourism. There are many reasons as to why this field is growing with such success, the most recurrent of which is Egypt’s competitive geographical location between the Middle East, Europe and Africa, as it provides ease of access to travelers from across the globe. Additionally, those traveling to Egypt for medical treatment can enjoy high quality services for a price which is significantly lower than that in their country of origin (it is estimated that US patients can save up to 60% on medical treatments including travel and accommodation).
More importantly however, there are no waiting lines for procedures, allowing for those who need immediate care to be seen too quickly.
Patients from everywhere come to Egypt seeking the convenient combination of high quality medical care and leisure tourism at an affordable cost.
For investors, a specific goal will need to be established to allow for a successful business. This means that investors will have to assess whether or not their focus will be more on the medical treatment (such as surgery and other palliative/curative care) or whether they wish to focus more on wellness tourism.
1 | Investments from Prince Alwaleed bin Talal
The Saudi prince is set to invest more than $800 million in hotels in Egypt, which would include expanding the Four Seasons resort in Sharm el Sheikh in southern Sinai, transforming it into the biggest resort in the world. New hotels would also be built in the Mediterranean town of El-Alamein and in Madinaty east of Cairo.
2 | Galala City
The new City of Galala will be located on the highest plateau in the Red Sea area between Ain Sokhna and Zafarana. The plateau sits over 650 meters above sea level at its highest elevation. 1 out of 3 phases have been completed covering an area of 2050 acres of residential, commercial, cultural, medical, educational, and religious sights.
3 | Al-Alamein Eco City
The new project sits on Egypt’s North Coast which stretchs over 48,000 feddans, costing a total of $ 337 million. The city will incorporate touristic, residential, agricultural, and industrial sites which will rely on renewable resources, including a desalinization plant and solar energy stations, for their functioning.
4 | The Grand Egyptian Museum
Situated near the Giza Plateau within two kilometers of the pyramids will be the monumental GEM project. The museum will cover 491,000 square meters of land making it the largest archaeological museum in the world. The museum is currently under construction, and the first phase of its development was unveiled earlier this year. In total, the project will house over 50,000 artifacts, the most awaited of which is the full tomb collection of King Tutankhamun consisting of 5000 items. The remainder of the artifacts will be sourced from storage locations situated across the country.