REGIONAL REPORT
CASHING IN ON POTENTIAL
ORASCOM ' S INFRASTRUCTURE INVESTMENT IS DRIVING NEW OPPORTUNITY .
Contributed by DEVINA DIVICHA
Sheraton Miramar , El Gouna , Egypt
Orascom Development was founded by its chairman , Samih Sawaris , through a desire to build houses by the sea and a jetty for his boat .
That was how the El Gouna development in Egypt was born 30 years ago . Now it is home to an airport , hotels , schools , a hospital , a university , marinas and a community of around 20,000 yearround residents .
A Swiss-based company , Orascom Development owns 100.1 million square meters across seven countries in three continents , of which Egypt is one . Hotels play a major role : In Q1 2019 , the company ’ s hotels continued to show double-digit growth compared with the same period in 2018 . A 14.9 % year-over-year increase in revenue was achieved , to US $ 46.6 million in Q1 2019 from US $ 40.45 million in Q1 2018 , which resulted in an increase of 24 % in GOP to US $ 20.77 million . Orascom now owns 25 hotels in Egypt with a total of 5,063 rooms , and operates in the country through its subsidiary , Orascom Development Egypt .
Joachim Schmitt , CEO of Orascom Hotels Management , the hotel management arm of Orascom Development AG , says its El Gouna property at the Red Sea has 18 hotels and is in the final stages of developing a luxury Casa Cook Hotel due to open mid-October .
“ The hotel will house 100 rooms and suites , some of which are with private pools and rooftops ,” he says . “ In Taba Heights , South Sinai , Orascom has six hotels with a total of 2,365 rooms . In Byoum , a gated resort town 90km away from Cairo overlooking Qaroun Lake , we have a boutique hotel of 53 rooms .”
Schmitt is positive about investing in Egypt as he witnesses an increasing number of visitors coming to the country . “ On the hotel guests ’ side in 2018 , the number of visitor arrivals to Egypt grew by 37 % to hit 11.3 million visitors ,” he says . “ We can see the trend continuing in 2019 , especially now with Germany lifting its travel ban on Taba for the first time in five years .”
The result has spelled success for Orascom as a developer . “ Egypt is witnessing a growing interest from investors in the tourism sector ,” Schmitt adds . “ For example , in October 2018 , we entered into an agreement with Thomas Cook to bring the region ’ s first Casa Cook and Cook ’ s Club hotel brands to El Gouna .”
Thomas Cook is seeking a US $ 943 million cash injection from China ’ s Fosun for its tour operator division and a minority stake in its airlines business . However , whether the hotels arm will be affected is yet to be seen .
Schmitt says the opportunities to further develop in the country are plenty , which Orascom is capitalizing on . Citing the investments in infrastructure , new developments such as the new airport , reviewed processes and administrative structures by the Ministry of Tourism , as well as the growing demand from the international markets , Schmitt is confident that Egypt is currently an attractive destination to invest in .
38 hotelsmag . com September 2019