Fast Market Research recommends "Egypt Tourism Report Q3 2013" from Business Monitor International, now available

Boston, MA -- (SBWire) -- 08/07/2013 --BMI's Egypt Tourism Report analyses the investment potential which Egypt offers to large tourist industries - particularly global hotel groups - as they seek to harness the growth opportunities being offered by the local market over the long term. However, over the short term, still-high political risk is acting as a clear suppressant to tourism demand.

Egypt's tourism industry saw something of a recovery over 2012. This positive performance bodes well for continued growth in 2013. In this context, BMI is forecasting a further 9% increase in tourist arrivals, to 13.2mn. Early indications for the current year are encouraging, with Q113 arrivals reportedly up by some 14.6%, at around 3mn. However, arrivals are still some way below their pre-2011 levels, with BMI not presently forecasting a return to 2010's highs before 2015.

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Overall, Egypt's tourism industry remains seriously badly affected by the recent years of political turmoil and instability following the overthrow of President Hosni Mubarak in February 2011. Elevated political instability will continue to hit occupancy rates in Cairo (which were down by 41.1% in October 2012, compared to October 2010, while we expect occupancy rates in the coastal resort of Sharm El Sheikh to remain largely unaffected. Indeed, Sharm El Sheikh occupancy rates stood at 84% in Octonber 2012.

Looking forward, while civil unrest in the capital looks set to remain elevated, a dramatic uptick in political violence along the Red Sea is unlikely, in our view, and the subsequent divergence in performance between Cairo and coastal resorts will persist. That said, the overall picture remains bleak, especially given that average room rates, which have declined significantly in the entire country, will continue to trend lower.

Looking at inbound tourism flows by region, Europe is clearly the largest source market for Egypt, accounting for 69% of the total forecast for 2013, a figure we see remaining largely constant for the overall forecast for 2017. Given ongoing concerns about the outlook for many European economies, now including France, this over reliance on one region could be a hindrance to the development of Egyptian tourism over the near term. That said, Russia is presenting a new and lucrative market for inbound tourism, Indeed, our forecasts call for Russian arrivals to increase by some 59.1% over the coming five years, as greater disposable incomes and desire for outbound tourism fuel demand.

Overall, BMI remains cautiously optimistic about the longer-term outlook for the Egyptian tourism industry, provided tourist areas remain free of the demonstrations and other political risk factors that have plagued other cities across the country. A continued weak outlook for the Egyptian pound could also see thecountry favoured as a 'low-cost' destination by tourists from the US and Europe.

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