2025 was the year Egypt’s tourism sector decisively exited recovery mode and entered an expansion phase. While 2024 was defined by resilience and stabilizing foreign exchange flows, the main question facing policymakers and investors throughout 2025 was no longer whether demand would return, but whether Egypt could expand capacity fast enough to keep up.

The government openly returned to its target of welcoming 30 mn tourists annually, framing it less as a stretch goal and more as a planning baseline for the years ahead. On this front, the country seems to be making progress with 18.8 mn tourists having arrived in Egypt this year, up nearly 20% y-o-y, Prime Minister Moustafa Madbouly said during his last weekly presser.

The GEM became a turning point

The Grand Egyptian Museum (GEM) officially opened in November after more than two decades in development, immediately reshaping tourism dynamics in Cairo and Giza. The museum is expected to draw 5 mn visitors annually. Its inauguration triggered a surge in interest in land surrounding the site, with hotel occupancy across Cairo and Giza hitting 100% during the opening week.

The central bottleneck throughout 2025 was hotel capacity

To hit their goal of 30 mn visitors, officials have repeatedly stressed that the sector needs to add roughly 240k–250k new rooms in hotel capacity. Egypt topped Africa’s hotel development pipeline during the year in a study by W Hospitality Group, with 143 hotels and nearly 34k rooms under development — accounting for about 32.5% of all rooms being built across the continent. Greater Cairo alone had close to 17.8k rooms in the pipeline, making it the single largest hotel development market in Africa. (The study includes data from 50 regional and international hotel chains, so it may be undercounting somewhat.)

Incentives got simpler — and more aggressive

To support this expansion, the Madbouly government moved away from heavy reliance on subsidized financing and toward removing structural obstacles. The cabinet approved a resolution exempting land and buildings from improvement fees when they are converted into hotels, provided developers meet strict operational deadlines (one to four years, depending on size).

The government also created the first formal regulatory framework to license holiday homes and short-term rentals. The move on the Airbnb-type stock of accommodation was a strategic play to bring existing shadow capacity into the formal market to both alleviate room shortages and capture tax revenues.

The Red Sea took center stage

Officials made it clear that future growth would be anchored by large, integrated Red Sea destinations designed to operate year-round. In September, the government announced plans for the EGP 900 bn (USD 20 bn) Marassi Red Sea project, developed by Emaar Misr in partnership with Citystars Properties. Modeling the destination on the success of Marassi on the North Coast, the project will include12 luxury hotels, marinas, and more than 500 waterfront retail outlets.

The North Coast also made headlines: Modon launched sales for the first phase of luxury residential and tourism units at its USD 35 bn Ras El Hekma destination. The project includes plans for c. 25k high-end hotel units and a massive international yacht marina. Qatari Diar inked a partnership with the government last month for a nearly USD 30 bn development at Alam Al Roum, designed as a permanent urban community that includes 4.5k hotel rooms, golf courses, and international marinas.

Policymakers also signaled they’re getting serious about how land is developed on the Mediterranean coast. NUCA is slowing the pace (and changing the mechanism) at which it releases North Coast land while it works on a master plan for a 400 km stretch of coastline extending from Marina all the way to the Libyan border.

Private capital overwhelmingly drove the sector’s expansion during the year

Government estimates showed private investors accounting for 99.5% of targeted tourism investments for the fiscal year 2025-26, totaling roughly EGP 116.2 bn. Regional players from the UAE, Saudi Arabia, and Qatar deepened their exposure, while global operators like Accor scaled up plans to operate 22 new hotels in Egypt by 2030.

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