A room at the Marriott Mena House Hotel in Egypt
The Grand Egyptian Museum is pushing 2,000 new hotel units towards west Cairo
During the current year, the Egyptian government launched a number of initiatives and measures aimed at supporting the expansion of hotel units, in preparation to accommodate 30 million tourists annually by 2031, which is the goal announced by the state as part of its plan to enhance the tourism sector.
These initiatives included granting facilities to convert residential, commercial, administrative and mixed facilities to hotel use, allowing for an increase in the number of hotel facilities and units in various regions.
Egypt provides new facilities to increase hotel capacity
The initiatives also included extending an additional deadline for a period of 6 months for the financing facilities initiative worth 50 billion pounds, starting from October 20, 2025, with the state bearing the interest rate difference, with the aim of supporting investors and accelerating the pace of implementation of hotel projects.
These steps come within the framework of the state's moves to enhance hotel capacity and prepare the tourism infrastructure to accommodate the expected growth in tourism traffic in the coming years, especially with the opening of the Grand Egyptian Museum in western Cairo.
Big request
Alia Al-Ishaqi, senior director of research in Egypt and the UAE at Knight Frank, said that the Grand Egyptian Museum will become a major driver of the transformation of the hospitality market in Greater Cairo, as its opening will lead to a huge influx of visitors and tourists from various parts of the region and the world.
Al-Ishaqi added that the West Cairo region will benefit the most from this tourism momentum, as it is expected that the demand for hotel rooms will increase and the demand for extended stays such as hotel apartments will increase, as they are a suitable option for families, and keep pace with the rising growth of this type of demand in the region.
She explained that until the third quarter of 2024, the market for hotel apartments and luxury branded residential properties in West Cairo remains limited and fragmented, but more than 2,000 new units are expected to enter as of 2027.
Knight Frank's "Destination Egypt 2025" report indicated that 81% of high-net-worth individual investors, out of more than 250 participants in the report, expressed interest in purchasing residential units bearing international brands in Egypt, while 80% of them confirmed that they plan to use them personally, while nearly half of them intend to use them as vacation units, according to Al-Ishaqi.
The report also showed that investors from the UAE and Saudi Arabia visit Egypt several times annually, at rates reaching 34% and 41%, respectively. Al-Ishaqi pointed out that these indicators reflect expectations of a noticeable increase in demand for hotel accommodation and luxury residential units, in light of the slow growth in supply, thus enhancing Cairo’s attractiveness as a tourist and investment destination, especially among wealthy investors in the region following the opening of the Grand Egyptian Museum.
New hotel brands
The latest report by Savills Egypt also showed that the hotel sector continues a strong pace of growth, driven by a package of government initiatives aimed at doubling hotel capacity to reach about 470,000 rooms by 2028.
This momentum is led by a growing interest from international hotel brands in expanding into the Egyptian market, in addition to a growing trend to repurpose historic buildings in downtown Cairo and transform them into modern hotels that suit modern hospitality requirements. Hotel occupancy rates recorded about 75% at the beginning of 2025, according to the report.
The head of Savals Egypt Real Estate Consulting Office, Catesby Langer Bagt, said that the number of international hotel brands operating in Egypt is likely to rise to 22 brands within six years, compared to only four brands currently, including IHG, Hilton, Accor, and Marriott. Savals estimates the number of hotel rooms in Egypt at approximately 220,000 in 2025, with expectations that the number will exceed 470,000 rooms by 2028, driven by government expansion plans and new tourism projects.
The trend of owners of apartments in the pyramids for hotel rental
The CEO and founder of Veesta Hotel Unit Management Company, Haitham Fares, said that owners of residential apartments in the vicinity of the Pyramids area have recently begun turning to companies specialized in managing and operating hotel apartments, in order to offer their units for rent to foreigners.
He pointed out that providing a real supply of hotel units in West Cairo will require a period ranging from 6 months to two years, given the time required to equip the units and raise their efficiency in accordance with approved hotel standards.
Fares explained that the hotel apartment market in Cairo is still largely concentrated in the Fifth Settlement and Zamalek areas, while there is no abundance, even to a limited extent, in the West Cairo area, despite the expected high demand with the opening of the Grand Egyptian Museum.
He added that Cairo includes about 5,000 hotel units, including 2,700 high-quality hotel apartments whose price per night exceeds $80, noting that 40% of these apartments are located in Zamalek and 40% in the Fifth Settlement, while the remaining percentage is distributed between Heliopolis, Maadi, and 6th of October City, with no more than 7% only in each.
He stressed that converting a residential apartment into a hotel unit with appropriate standards requires an investment of no less than one million pounds over a period extending to three months, to ensure achieving a level of finishes and equipment that suits the requirements of hotel operation.
Fares suggested launching concessionary financing programs to help individuals rehabilitate their residential units and convert them into hotel units, to be later managed by specialized companies, thus contributing to raising the quality of the supply and increasing the absorptive capacity of the hotel sector in West Cairo.
Double units within a year
The co-founder and CEO of Birdnest, Mustafa Al-Nahwi, said that accelerating and simplifying licensing procedures for converting residential, commercial and administrative units into hotel units would double the size of the supply to reach about 10,000 units during the year 2026, compared to only about 5,000 units currently, after it was limited to about 2,000 units only two years ago.
Al-Nahwi added that converting residential units into hotels is a faster and less expensive activity than establishing traditional hotels, given that it follows basic hotel standards while providing limited services, which contributes to reducing the cost of accommodation and increasing the absorptive capacity of the market.
He explained that this mechanism is capable of pushing the market to add between 50 to 100 thousand hotel units during the next five years, in addition to about 100 thousand rooms that real estate development companies plan to add during the same period, thus enhancing the state’s goals to raise hotel capacity to about 334 thousand rooms within ten years.
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