The Impact of Exchange Rate Liberalization on The Performance of Egyptian Hotel Industry: An Analytical Study

Abstract

Hotel industry is affected by economic variables, whether local or international. The liberalization of the exchange rate is considered one of the most important economic variables that occurred in Egypt in the year of 2016. Therefore, this research aims to study the impact of exchange rate liberalization on the performance of hotel industry in Egypt. The policy of liberalizing the exchange rate has led to an increase in the value of the US dollar against the Egyptian pound. In addition, total tourist revenues have increased and total number of tourists, hotel occupancy rate and total hotel nights has decreased. Moreover, t-test showed that there are no statistically significant differences in the indicators of the total number of tourists, total tourist revenues, total hotel nights and hotel occupancy rate, whether before or after the exchange rate liberalization policy. Using the binary logistic regression test, the indicators of the average exchange rate, total number of tourists, total hotel nights, and hotel occupancy rate are not considered a predictor of an increase in the rate of tourism revenues in Egypt. Accordingly, this research provides an integrated statistical analysis of the impact of the exchange rate liberalization on hotel industry, and thus, this research helps decision makers in official tourism establishments and hotel managers in making decisions, setting policies or scenarios, and building strategic plans that support the economic value of the hotel industry in Egypt.