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Hospitality Industry in Egypt in Flux

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Egypt has had a tumultuous few years and continues to go through changes with the 2013 overthrow of its former president Mohamed Morsi. With the Middle East and North Africa seen as a growth area for the hospitality industry, investors with future expansion hopes are keeping a close eye on the country.

Tough and Tumultuous Hospitality Industry in Egypt

Hospitality Industry in Egypt
After the Arab Spring hit Egypt in 2011, it seemed that much of the country had started to settle down. Hotel room rates in Cairo, for example, had actually risen in May of 2013. But increasing protests followed by former president Mohamed Morsi’s ousting in July continue to hurt tourism and restaurant growth.

As of January 2013, there were 3.2 million fewer tourists in 2012 and billions less in tourist income coming into Egypt. There’s been a sharp downturn in Egyptian travel and hotel rates since July after Britons and Americans were warned against travel and potential Western visitors grew wary.

The Egyptian Ministry of Tourism, however, sounded more optimistic saying, “Tourism in Egypt is expected to boom as of next autumn as the country settles down to its newfound democracy which will bring peace and prosperity to this great country and its united people.”

KFC Exports From Egypt

An upbeat development in the news about KFC deliveries from Egypt to Gaza via underground tunnels illustrated the regional demand for Western food. But 80 percent of those tunnels were shut down after the Morsi overthrow, making it unlikely fried chicken was still headed to Gaza.

Hospitality Industry in Egypt Gets Conservative

Under Morsi’s Muslim Brotherhood administration, Egypt appeared to be headed towards a more conservative mentality, including in the hospitality field. For instance, Les Rois Hotel in the Red Sea resort region of the country went alcohol-free, created men-only hotel floors and made its pool for women only. The Egyptian government also added restrictions on the sale of alcohol and licenses and increased alcohol taxes.

“Post-revolutionary Egypt” in 2012 also seemed to be promoting more high-end Egyptian restaurants and less international cuisine when dining out.

Western Restaurants in Egypt

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The growing conservatism in Egypt has not completely quelled the taste for Western brands in Egypt, though. The Oasis Heliopolis, the world’s largest food court according to the Guinness World Records, claims 35 different cuisines including Spanish, Italian, French, American and Asian food.

Several Western chains were growing in Egypt as well. Fatburger recently opened a new restaurant in Cairo, and its founder said that international expansion helped make the franchise profitable again.

Cold Stone Creamery made its first launch into Africa in 2012 when it signed an agreement to open eight Egyptian Cold Stone locations. And American casual dining chain, Applebee’s, announced in 2011 that it was slated to open 10 new restaurants in about a 10-year period, incorporating Egyptian regional dishes into its menus in the country.

The Future of the Hospitality Industry in Egypt

While the region around Cairo and Alexandria has seen mass protests, further away in the Red Sea resort area appears untouched by political unrest and a safe place for visitors.

And there is hope for calm in the country in the near future with some thinking that a post-Morsi regime will invite more Western investment in the end.

Key Takeaways

  • Despite political unrest, Egypt saw hotel room rates rise in May of 2013.
  • Western brands are still succeeding (and expanding) in Egypt.
  • Growing conservatism in Egypt is creating new boundaries for restaurateurs and hoteliers to overcome.

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