The Egyptian General Company for Tourism and Hotels (EGOTH) plans to pump investments at EGP 900m for the development of its hotels in the fiscal year (FY) 2015/2016, according to its Chairman and Managing Director Samir Hassan.
In an interview with Daily News Egypt in Sharm El-Sheikh during the Economic Summit, Hassan said that the investments aim at increasing the capacity of hotels and the company’s competitive advantage.
What is the company’s investment plan during FY 2015/2016?
We have an investment plan to develop the company’s assets, including hotels and resorts, at EGP 900m for the upcoming FY 2015/2016, which will raise our competitive edge through an increased efficiency of the offered tourism services as well as increasing the capacity of hotels. We have added 36 suites in the Mena House Hotel with a cost of EGP 65m, and we contracted with Marriott to manage the hotel for 15 years, and the contract will be renewed after the agreement between both sides.
EGOTH also plans to develop the Shepherd Hotel overlooking the Nile with a self-fund at EGP 320m to EGP 350m, and Cleopatra Hotel with investments at EGP 58m. The company aims to develop the Cosmopolitan Hotel with an investment cost worth EGP 58m. EGOTH received offers from two companies to develop the hotel: the Saudi Al-Hokair Group, and Basco, a real estate development company. EGOTH is currently finalising the development works of Elephantine Island hotel in Aswan, while expanding the Movenpick Hotel to a room capacity of 240 rooms, with an investment cost of EGP 240.
What about the Ain Sokhna project?
This will be a pioneer project through partnership with the private sector in hotel construction, and the investment cost is EGP 1.5bn. We have a plan to benefit from the company’s owned assets. The mentioned plan will multiply its benefits within the next years. The company is working on developing the Cecil Hotel in Alexandria with EGP 21m.
Regarding the benefits from all the company’s assets, what is the status of your lands that were seized by the Ministry of Interior?
We came to some agreements with the Ministry of Interior, which include, firstly, receiving a usufruct instead of the lands that the Ministry of Interior had seized in the past. Secondly, we agreed to nominate a neutral side to determine a price as compensation for the previous years’ usufruct.
In the past years the company bore huge losses. When will these losses change to revenues?
The last four years were indeed difficult for Egyptian tourism. EGOTH was not the only company negatively affected by the decline in the tourist flow to Egypt. Losses of the past FY 2013/2014 were estimated at EGP 175m, but we hope that it will reach zero in the current FY 2014/2015, aiming to achieve revenues at EGP 120m for the next FY 2015/2016.
How do you view tourism in the next period?
Egyptian tourism can recover, and we can see that during the first half of the current FY 2014/2015 it was better than the previous year, despite travel alerts announced by countries importing tourism. Egypt has valuable tourism activities during the four seasons of the year; on the other hand EGOTH owns hotels in various zones of Egypt, like Luxor, Aswan, Cairo, Hurghada, Ain Sokhna and Sharm El-Sheikh. All these assets, being in various areas of the country, give the company a competitive advantage among hotels in Egypt.