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Hotels close in Sharm El Sheikh as occupancy falls

Coastal city suffers from 54 closures, while 220 hotels across Egypt close following October's terror attack

Pictured: Sharm El Sheikh hotels have suffered since the terror attack on a commercial airliner in October 2015

At least 54 hotels have closed in Sharm El Sheikh while occupancy levels drop to 57 per cent, as the coastal city continues to suffer from last year's terror attack.

In its Middle East and North Africa Hotels Market Review, Hotstats says hotels are struggling to remain profitable as visitors have "all but abandoned" the Egyptian coastal city, with occupancy falling 11 per cent year on year in the month of July.

The falling numbers have been echoed across Egypt, with as many as 220 hotels closing in the wake of a terror attack of a commercial airliner in October, while the Egyptian Businessmen's Association (EBA) tourism committee says no hotel in Egypt has operated at full occupancy since. In Marsa Alam, 35 hotels have reportedly closed, representing half of the city's hotel supply.

Hotstats says occupancy levels in Sharm El Sheikh went from 68 per cent in July 2015 to 57 per cent in July this year, but average room rates (ARR) rose 7 per cent to USD$63 (£47). 

Cairo appears to be bucking the trend, as occupancy increased 5 per cent in the month of January, reaching 61 per cent.

Sameh Tawfik, general manager for Peak DMC in the Middle East, said Cairo and the rest of the country was slowly returning to normalcy.

"Over the last six months Egypt has seen more stability than over the last five years which is a very positive sign. Companies working in the tourism industry have already started to see some improvement," he said.

"After the plane incidents some hotels postponed operation and other closed until further notice. However, while 220 sounds like a lot, there are many hundreds of hotels in Egypt and this number is likely to include hotels that have partially closed and temporarily closed. It is hoped that many or most will reopen again soon. The return of charter flights will help."

Elsewhere in the region, hotels in the Bahrain capital Manama were shown to offer better value in the month of July, with Hotstats revealing ARR fell 9 per cent to USD$188 (£141), despite occupancy climbing 8 per cent to 51 per cent.

In the Jordanian capital of Amman, occupancy climbed to 53 per cent (+5 per cent) while ARR rose slightly, from USD$155 (£116) to USD$156 (£117).

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