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 year-round residents.
Swiss-based 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$40.5 million in Q1 2018, which resulted in an increase of 24% in GOP to US$20.8 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.
Contributed by Devina Divicha
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 90 km 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 in which to invest.