Helnan increases its presence in Egypt by adding 8 hotels

Abdel Razek Al-Shuwekhi
10 Min Read

During the last three years, Helnan Hotel Group in Egypt added three hotels to the group despite the crisis experienced by the tourism sector for more than six years.

Helnan group managed to spread more in Egypt reaching eight hotels in different areas such as Greater Cairo, Sinai, Red Sea and Alexandria.

According to Enan Galaly chairman of Helnan Hotel Management. Galaly said during an interview with Daily News Egypt that the company included a hotel last month in the Marsa Alam area of the southern Red Sea with a capacity of 300 rooms. He expected the recovery of the tourism sector during the next three years, and here is the interview.

How do you see the tourism sector despite the crisis that it has been suffering from since 2011? 

Egypt has diversified resources including tourism which is one of the most important resources in Egypt.. Although in 2010 Egypt reached 14.7 million tourists, which is considered a very small number compared to the resources we have.

How about the massive decrease in flow reaching 4.5 million tourist during last year?

That is very sad indeed; however, I think that during the upcoming three years Egypt will manage to recover and the tourism sector achieve high growth spikes, but the security and stability of the country will remain a very important condition for the recovery.

For example, over 30 million tourists visits Spain annually,  even though Egypt has a diverse tourist destination, its share of flows is still weak and we hope to increase our share of world tourism.

We have religious tourism and holy sites for the family, as well as the place where God spoke of the Prophet Moses in Sinai and other Egyptian icons such as Omar Al-Sharif, I suggest that we use his films under the name of Dr. Zhivago to advertise more for tourism in Egypt.

How did Helnan deal during the past six years and so far with this long crisis?

During the past couple of years we managed to deal with the crisis quickly and change our marketing strategy whether inside or outside Egypt.

In addition to increasing the trainings for the employees of Helnan hotels in preparation for the return of flows again, the crisis will not forever.

We have increased the number of hotels of the company to eight hotels compared to five years ago from now, as a hotel was added to the group during last August

Enan Galaly chairman of Helnan Hotel Management

What about the occupancy ratios of your affiliate hotels? Were any of the workers laid off?  Many of the tourism companies during the past periods have achieved a decline in revenues What about you?

I appreciate such questions, let me clarify something in Helnan Hotels we consider our employees as partners to us, we push them towards success. We continued and despite the crisis non of the employees were asked to leave; however, we decided to train them during that period so that when the flow comes back again they’d be ready.

As for the occupancy in the hotels now it has decreased of course, but now much better, exceeding the average of 50%.
About the decline in revenues, the decline ranged between 20 to 25% did not exceed that and the company has a strong plan to restore the ratios of strong concerns in the coming period.

We have implemented a rapid crisis plan to deal with the decline in tourist inflows to Egypt, which enabled the company to restore high occupancy rates in its hotels.

I think that as long as we pay taxes to the state and pay the dues of our workers, we are able to compensate for losses as long as they are small.. Things are going well at the moment with increasing flow.

Do you intend to increase your affiliate hotels over the coming years?

Adding hotels to Helnan will be in accordance with a well thought out strategy as needed. This has been done over the past years as it has been increased to Eight hotels in different tourist areas.

Aren’t you thinking about switching from hotel management to investing in the sector, especially that there are promising investment opportunities offered by the government?

We have already thought about that at the beginning of this millennium, but the presence of large hotel capacity in Egypt has made us retreat from this, as well as the company has pumped over the last ten years more than EGP 100m in the development of hotels run by.

We are now focusing our business in the management of hotels with our long experience of being in the Egyptian market or other European markets.

I do not intend to invest in any other activities because as they say A jack-of-all trades master of none, whether outside or inside Egypt only hotel management, the sector in which we work.

The expansion of hotel construction has prompted investors to turn to bank loans, which has created a crisis for their companies to pay the dues, as well as for banks to recover their loans.

During the recent period there has been a series of economic decisions implemented by the government. How did the decision to liberalize the exchange rate of the pound affect the average spending of guests in your affiliate hotels?

The liberalization of the exchange rate of the pound affected the tourist flows of Egyptian individuals and families, which made the cost of residence higher and in turn made it less for foreigners, and this is what we observe very well in the last few months.

There is another thing in this matter as the cost of operation has increased significantly, but we can not raise prices at the same height directly. In some hotels prices rose by 10 to 20% but we can not increase our prices to that extent.

However, we did not reduce the efficiency and services during the past period, nor has any employment been cut in the context of balancing operating costs and expenditures.

How do you see tourism this year for Egypt and for the Helnan hotel group?

There has been an improvement in inflows and hotel guests, and we expect to recover losses and decline in two years. Egypt, despite its occurrence in a volatile region in the Middle East, has been improving in recent times.

We should know that the decline in flows to Egypt was not due to political unrest during the last period, but also there are unstable regional situations. Moreover, Europe, which is the largest market for Egyptian tourism, suffers economically. The global and regional situation has greatly affected the inflows of tourists to Egypt.

The improvement in tourist arrivals to Egypt during the last period already is  great.  I see that the sector requires a strong tourist structure as well as raising awareness so that tourists feel that Egypt is better than other countries.

How do you see the marketing and promotion of Egypt abroad?

We must utilize all the existing resources in Egypt as well as marketing the historical dimension and the establishment of events bearing the names of famous Egyptians globally with the strong participation of the private sector in this aspect, the Ministry of Tourism or the province can not be responsible for all activities in the sector.

As well as the sector requires immediate start-up of extensive training for existing workers at the present time in preparation for recovery.


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