Faced with a range of internal and external challenges, the last few years have not been easy for Egypt. And yet in a display of characteristic resilience, the MENA country is now eyeing a brighter outlook, buoyed by a record-breaking year for tourism and ambitious targets for the sector. Nagi Morkos, founder and managing partner at Hodema Consulting Services, takes us through this impressive turnaround.

Egypt has faced challenging economic conditions since the pandemic. As a result, in 2022, it secured a USD 8 billion loan from the IMF. Inflation peaked in September 2023 at 38 percent and then devaluation hit hard. However, more recently, threats have been largely external, starting with pressure on wheat imports due to the war in Ukraine. Today they include the regional conflict, which has disrupted traffic in the Red Sea.

A strong recovery

Despite these impediments and external shocks, the economy is growing a thicker skin and showing signs of robust recovery. In August, Ahmed Kouchouk, the country’s finance minister, announced that real GDP grew by 4.5 percent in the fiscal year 2024- 2025, up from 2.4 percent the previous year. Non-oil manufacturing, tourism and telecommunications have fared notably well since the end of 2024. Moreover, a series of tax reforms and privatizations has given a fresh boost to certain sectors. With inflation holding steady at around 14 percent, next year’s results may even exceed the government’s 4.5 percent target. However, this depends on the outlook remaining stable.

Supporting these positive signs, Fitch Solutions has forecast the country’s nominal GDP to rise steadily over the next decade. Additionally, Prime Minister Mostafa Madbouly announced in August that dollar reserves reached USD 8.5 billion in July – a historical high. The increase, which was partly due to surging remittances from Egyptians abroad, indicates confidence in the economic landscape. More good news came when the IMF released its report after reviewing the country’s accounts in the spring. In recognition of national efforts to preserve macroeconomic stability, creditors approved a USD 1.2 billion disbursement from the USD 8 billion loaned. Consequently, the prime minister announced an upcoming roadmap outlining the nation’s development and economic strategy through 2030. The plan marks the transition into the post-IMF period.

Record-breaking tourism

The tourism industry’s robust performance offers another sign of confidence in Egypt’s economic prospects. Arrivals reached a record 15.8 million in 2024, climbing by more than 21 percent on pre-Covid levels. The country has now become the second-largest tourist destination in Africa, behind only Morocco. Furthermore, preliminary figures for H1 2025 point to a steady upward trend. Visitor numbers for the first six months reached 8.7 million, up from 7 million in the same period in 2024.

With tourism contributing more to the economy than other sectors, these strong results are unsurprisingly translating into fresh inflows. Revenues rose 15.4 percent to reach USD 12.5 billion from July 2024 to March 2025, according to the Central Bank, up from around USD 10.9 billion for the same period the previous fiscal year. Moreover, the institution’s balance of payments report revealed that tourist nights totaled 134.3 million, climbing from approximately 116.4 million.

An ambitious roadmap

The tourism industry officially accounted for 8.5 percent of GDP last year. However, estimates put the figure much higher once informal jobs are included. As a result, the authorities have set ambitious targets for the sector. A June report by the World Travel & Tourism Council found that tourism supported 2.7 million jobs in 2024, exceeding the 2019 peak.

Employment growth is set to gain pace, in line with the government’s objectives for the industry. Outlined in the National Strategy for Tourism Development in 2022, key targets include attracting 30 million tourists annually by 2028. The strategy forms part of broader plans to transform the country into a leading global destination.

Widespread media and advertising campaigns have been launched to support these efforts. Initiatives include the 2024 ‘Living 365’ campaign, which targets Gulf and Arab countries. A previous 2022 campaign titled ‘Follow the Sun’ reached 500 million people worldwide, according to officials.

The number one priority now is to expand infrastructure. Officials last year announced targets of 25,000 new hotel rooms, following a warning about shortages from the Ministry of Tourism. According to Sherif Fathi, the minister of tourism, the industry will need to add 250,000 hotel rooms to the current 223,000 available to meet the country’s goals for the next decade. Consequently, untapped regions are being transformed into touristic destinations to facilitate new hotel projects. Sidi Heneish on the north coast is one such example.

Egypt’s tourism industry is traditionally known for its expansive facilities targeting groups and visitors seeking all-inclusive trips. However, the sector has broadened its offerings in recent years to include higher-end and more sustainable options.

New refined projects, such as Minor Hotels’ Anantara brand in Soma Bay, are underway on the Red Sea shoreline. Meanwhile, El Gouna, also known as the Venice of the region, is attracting several luxurious establishments. Even Hurghada, famous for its around-the-clock partying and all-inclusive packages, is cleaning up its act to target wealthier visitors. Meanwhile, Hilton is expanding the premium eco-friendly segment with the Abu Dabbab Lodge and Tapestry Collection by Hilton. It has also announced 25 new hotels across the country.

On board with nautical tourism

Nautical tourism is becoming increasingly popular, prompting developers to turn their attention to the boating business. Aligned with this trend, the authorities are exploring public-private partnerships to boost the nautical and cruising industry. The country hosted its first Cruise Egypt Forum last June, bringing the industry’s key players together. It also launched a digital platform to simplify yachting paperwork aimed at attracting wealthier visitors from the Gulf. On a more traditional note, a large number of dahabeyas have recently been restored. Located on the Nile, these folkloric sailing boats are now offering tourists a luxurious experience that celebrates the country’s rich heritage.

Restoration and protection

Indeed, cultural tourism is a key part of the national strategy. Already famous for the Sphinx and the Pyramids, the country now aims to modernize its facilities. Its plans include welcoming more visitors, while better protecting the country’s heritage. In Cairo, the upcoming opening of the Grand Egyptian Museum is the talk of the town. This unprecedented project will transport visitors back to ancient times, showcasing the country’s extensive and rich history. The popular sites of the Valley of the Kings and Karnak Temple have also been restored, with amenities made more sustainable. These include solar panels, which have been installed in five UNESCO heritage sites. Additionally, electric tour buses are set to begin operations in Giza this year.

The government is also working on making the country more accessible to last-minute visitors. In June, a new visa-on-arrival was introduced at Cairo airport. Meanwhile, additional air routes to Europe and Asia are planned in a bid to improve connectivity. These extra flights will serve the growing market of Indian tourists, supporting broader efforts to position Egypt as a year-round destination.