Egypt’s Holiday Homes Regime: An Investment Opportunity for Hotel Operators and Property Owners

4 min 25 sec

In furtherance of Egypt’s strategic initiative to expand its hotel room capacity by 2030, the Egyptian Government has introduced a new regulatory framework for holiday homes designed to augment the country’s hospitality infrastructure. This framework presents significant investment opportunities for hotel operators, property owners, and investors seeking to participate in Egypt’s growing tourism sector through the establishment or conversion of properties into licensed holiday home operations, particularly in light of the inauguration of the Grand Egyptian Museum. The inauguration of the Grand Egyptian Museum is expected to drive a significant increase in tourist arrivals, with projections indicating growth of ten to fifteen percent (10-15%), further underscoring the timeliness of this regulatory initiative.

The regulatory framework governing holiday homes in Egypt derives from Law No. 8 of 2022 on Hotels and Tourist Establishments (the “Hotels Law“), Law No. 27 of 2023 on the Establishment of Tourism Chambers, and Prime Ministerial Decision No. 705 of 2023. The principal instruments comprising this framework are as follows:

1. Decree No. 209 of 2025 issued by the Minister of Tourism and Antiquities (the “Holiday Homes Decree“), which establishes a mandatory licensing regime for short-term furnished accommodation and imposes upon operators the obligation to obtain a Touristic Eligibility Certificate (the “Certificate“) from the Ministry of Tourism and Antiquities (the “Ministry“);
2. Ministerial Decision No. 801 of 2025 issued by the Minister of Tourism and Antiquities (the “Third Pattern Decree“), which introduces a separate “Holiday Home (Third Pattern)” subcategory subject to more stringent structural and operational requirements; and
3. Prime Ministerial Decision No. 80 of 2025 (the “Improvement Fees Incentives Decree”), which affords conditional improvement-fee incentives and prescribes commencement deadlines applicable to qualifying projects.

1. What is a Holiday Home?

Pursuant to the Holiday Homes Decree, a “Holiday Home” means any unit comprising one or more rooms, suites or villas—whether stand-alone or within a building—providing such essential services as may be prescribed (including, without limitation, housekeeping) and prepared for the reception of Egyptian and/or foreign guests, situated within a designated tourist area or distinguished residential compound.

The “Third Pattern” is a special subcategory under the Third Pattern Decree. It applies to buildings that contain at least eight residential units (apartments or studios) used exclusively as Holiday Homes. The entire building must be dedicated to Holiday Home use for the duration of the license—mixed-use buildings are not permitted. The Ministry has sole authority to determine whether a location is suitable for this category. Properties operating under the Third Pattern are treated as hotel establishments under the provisions of the Hotels Law.

2. What Standards Must Holiday Homes Meet?

The Holiday Homes Decree sets out minimum standards that all holiday homes must meet:

(a) Entrance and Signage: There must be a proper entrance with signs in two languages showing the property name and unit number;

(b) Lifts: Buildings with units on upper floors must have a working lift that is regularly maintained;

(c) Kitchen: Each unit must have a kitchen or kitchenette with a refrigerator, stove, microwave, dishes, and laundry facilities;

(d) Rooms: Rooms must meet minimum size requirements and include proper beds, emergency exit maps, door peepholes, good lighting, wardrobes, bins, blackout curtains, internet, TV, minibar, and air conditioning or heating;

(e) Bathrooms: Each bathroom must have a sink with mirror, hot and cold water, toilet with bidet spray, shower or bathtub with splash guard, non-slip floors, and towel rails; and

(f) Reporting and Compliance: Operators must register guests through the Ministry’s online system, pay all required taxes and fees, and follow health and safety rules.

For the Third Pattern, there are additional building-level requirements. These include: a dedicated main entrance; proper exterior finishes; a separate entrance for staff and deliveries; accessibility features for guests with disabilities; a reception area sized for the building’s capacity; optional food and beverage service areas; certified lifts; and such other amenities as may be appropriate.

3. How to Apply for a License

To obtain a Certificate, applicants must submit documents to the Ministry. The required documents differ depending on whether the applicant is an individual or a company. The Holiday Homes Decree sets out the fees for the initial inspection, license issuance and annual renewal—these fees may change over time. Applicants for the Third Pattern may need to provide additional documents as specified in the Third Pattern Decree.

4. Improvement Fee Incentive for Qualifying Projects

The improvement fee is a fee imposed by the government pursuant to Law No. 222 of 1955. The Improvement Fees Incentives Decree offers an exemption from the improvement fee for projects that establish or convert properties into hotels or Third Pattern holiday homes.

To qualify for this incentive, the project must: (a) receive approval from the Ministry confirming the location is suitable; (b) obtain approval from the Higher Council for Urban Planning and Development; (c) operate the property only as a rental (not for sale); and (d) not sell the land or buildings before starting operations.

The Improvement Fee Incentives Decree also sets deadlines for when operations must begin, which vary based on the project type and number of units. If these deadlines are missed, the full improvement fee becomes payable, plus interest at the Central Bank of Egypt’s rate.

This incentive presents a significant investment opportunity for domestic landlords, international investors and property owners seeking to acquire and convert existing properties into licensed holiday home operations, thereby establishing diversified real estate portfolios within an emerging market segment.