Travel, Logistics & Infrastructure Practice

Growth in a crisis:
Lessons from hospitality
CEO Omar El Hamamsy
By redirecting business efforts, the head of Orascom Development found a
path to company growth during the COVID-19 pandemic.

November 2021
 In September 2020, Omar El Hamamsy took on the
role of CEO of Orascom Development, a real-estate-
development and hospitality multinational based in
Zurich, Switzerland, just six months after COVID-19
had been declared a global pandemic. It was also
only seven months after the sudden passing of the
company’s previous CEO. Orascom Development’s
portfolio includes hotels, residential communities,
and leisure facilities in North Africa and the Middle
East as well as three countries in Europe.
The COVID-19 health and economic crisis has
delivered a significant blow to the travel industry
worldwide, resulting in an 84 percent drop in the
number of international tourist arrivals.1 Demand
likely won’t be fully restored for years to come. And
for emerging-market destinations, where most of
Orascom Development’s properties operate, travel
can be even more of a conundrum. “A challenge of
operating in emerging-market environments—in
Egypt, Oman, and Montenegro, for instance—is a
tremendous dependence on external travel,” says El
Hamamsy. “Exposure to macroeconomic conditions
or competitive dynamics is more difficult to control.”
This type of inbound-tourism market is often
vulnerable to disruption, and lagging vaccination
rates in some emerging areas can contribute to
further setbacks.2
How can growth be achieved in places like Egypt—
according to El Hamamsy, the oldest tourism
market in history and one of the most unstable—as
well as in the broader emerging-market landscape
during a crisis? One way is by flexing new muscles.
In an interview with McKinsey’s Vik Krishnan,
El Hamamsy explains how he is redirecting
the business to overcome COVID-19-related
challenges by expanding product offerings, finding
new talent pools, and rethinking conventional
business models. The following is an edited version
of the full interview.
1
Ralf Peters and David Vanzetti, “COVID-19 and tourism: An update; Assessing the economic consequences,” United Nations Conference on
Trade and Development, June 30, 2021, unctad.org.
2
Tom Arnold and Karin Strohecker, “Spectre of another lost tourism season haunts emerging markets,” Reuters, May 13, 2021, reuters.com.
2 Growth in a crisis: Lessons from hospitality CEO Omar El Hamamsy
McKinsey: What was it like to take the helm
of Orascom Development in the middle of a
global pandemic?
Omar El Hamamsy: I joined the company not
necessarily at the peak but pretty deep into the
COVID-19 crisis, and it was certainly a test. The
business was in strain, given that about 40 percent
of it was in the hotel, travel, and tourism sector, so
you can imagine the negative impact of COVID-19.
International travel pretty much froze for a year
and a half and is slowly beginning to pick back up.
Priority number one was to minimize the impact of
the COVID-19 pandemic and establish a 100-day
plan to immediately stop the revenue loss and find
new growth avenues.
Orascom Development has shown a lot of resilience
in surviving difficult times over the past ten years.
Following its IPO amid the [2007–09] financial
crisis, with a market cap of $4 billion, its share
price suffered a tremendous drop, reaching
about $400 million of total market cap in the pre-
COVID-19 era. That drop was triggered by a number
of factors—including the Arab Spring—in very
challenging markets. Since then, a number of other
issues—economic, tourism, geopolitical, or related
to political stability—have affected the company.
COVID-19 happens to be the latest macro crisis
to hit us. While it has obviously had an impact, the
reality is that Orascom Development has experience
dealing with crises and has built a certain resilience
around it.
Our experience in navigating through different
types of crises has taught us the importance and
the ability to pivot rapidly. In response to COVID-
19, we’ve redirected the majority of our effort, our
energy, and our focus to the areas of our business
that are independent from tourism and international
travel—specifically, the real-estate and town-
‘Priority number one was to minimize
the impact of the COVID-19 pandemic
and establish a 100-day plan to
immediately stop the revenue loss
and find new growth avenues.’
management parts of the business. These two
lines of business have responded and played out
quite well for us, as well as also generating ancillary
recurring revenues for all of our operating entities
in the towns and cities we’ve built and developed.
For example, in mountain areas there are revenues
associated with skiing, and on Egypt’s Red Sea
coast there are revenues associated with outdoor
activities at our marinas.
McKinsey: How do you see tourism and
international travel fitting into your strategy as
travel rebounds?
Omar El Hamamsy: We’ve chosen a two-pronged
approach. The first strategy was redirecting all our
tourism and hospitality efforts toward our national
and local markets and developing a very aggressive
strategy to attract and, in a safe way, operate for the
domestic markets. And that has worked out quite
well. If today I look at where we’ve implemented this
strategy, it has resulted in year-to-date revenues
for our Egyptian assets near 50 percent of our
peak revenues in 2019, just before the COVID-19
pandemic started.
Strategy two has been utilizing the time of COVID-19
to rethink where to redirect our efforts going
forward—one, from a source market perspective and
in terms of our targeted customer segments; two,
in terms of the product that we actually offer. We
Growth in a crisis: Lessons from hospitality CEO Omar El Hamamsy
came up with the need for us to renovate a number
of our hotels and a number of our assets, as well
as to actually add new segments of hotels and new
customer segments in some of our destinations—
which is a strategy that we’re executing on right
now. We also started rethinking our heavy
dependence on tour operators as a sales channel.
[The rethinking] has also opened our eyes to the
merit of building new partnerships for our tourism
and hospitality hotel assets—so we’re about to
launch a program of much more strategic, long-
term joint ventures with other potential owners for
new assets, new hotels, and new concepts that we
intend to put in our destinations.
McKinsey: What have been some of the challenges
of growing and scaling in a market like Egypt or in
the broader emerging-market landscape during the
COVID-19 pandemic?
Omar El Hamamsy: One challenge of operating
in emerging markets is the limited predictability of
rules, taxation, and fees. Some new governments
can have a tendency to revisit many decisions made
by prior governments in relation to land sales, hotel
and tourism taxation, and the use rights of assets
such as the beach, sea, or mountains. The number-
one challenge of operating in such environments
is ensuring that you have a great understanding of
those regulatory environments—and especially a
3
 strong resilience for what may be difficult-to-predict
regulatory and taxation changes.
We managed [the changing] government regulations
through COVID-19 by spending a lot of time working
with our government partners—explaining to them
how COVID-19 is impacting us and, in consequence,
the tourism sector and the local economy—in order
to come back with incentives and/or government
initiatives to support the sector as a whole.
In Egypt, the government also stepped in through
a number of national banks and the Central Bank
to provide the entire industry with low-interest
loans for hotel renovations. In addition, a number
of social initiatives were implemented to ensure
that employees and their jobs were protected
over time. In Oman, for instance, this included
elements enabling our employees to go back to
their countries and yet return without heavy visa or
localization requirements.
McKinsey: Attracting and retaining talent has been
critical during this crisis. What’s been your strategy,
and how has COVID-19 changed the day-to-day for
your employees?
Omar El Hamamsy: I face two dimensions of
COVID-19-related challenges when it comes to
people. The first dimension pertains to building a
uniform culture in the midst of the current “remote
working” approach. One thing the COVID-19 crisis
has made us realize is that talent is global. Gone
are the days where I can hope for, or need, my top
talent to be in the same office as I am, in the same
tower, or even in the same city. We have to go where
the talent is, and the pandemic has enabled that to
happen because of the virtual way we’ve all been
working over the past 18 months.
But with that comes a very big challenge to build
a uniform culture. How do you bring people
together? And how effective is it for people to work
remotely so far from each other, particularly when
4 Growth in a crisis: Lessons from hospitality CEO Omar El Hamamsy
they’re fresh to this 32-year-old organization? The
key to hiring exceptional talent is to keep the talent
where it sits, where it’s comfortable, and we’ll
find ways to work around building that culture of
bringing people together.
There is a second dimension: How do you ensure
the safety of and operate with a large workforce?
Including our partners, it’s a workforce of about
9,000 people operating in our destinations. Health
safety was by far our biggest concern when
COVID-19 hit, so we did what everybody else did—
practiced physical distancing, had strong training
and education campaigns for our colleagues,
and implemented many safety measures in our
facilities, hotels, and offices ranging from reduced
occupancy to constant disinfection. We took our
maximum hotel capacity from 100 percent before
COVID-19 to 25 percent and shut down all our
common spaces, such as restaurants.
McKinsey: What have you learned from the
challenges of the pandemic that could help you
going forward?
Omar El Hamamsy: Use the time during the
pandemic to consider new options for reinventing
your business model. This period has been an
appropriate moment to rethink things, to launch new
ways of doing things, to, frankly, stop doing some
old practices that you may have been hesitating to
stop for a while because of people or legacy issues.
That’s certainly number one—experiment and try
new things.
Number two, I’ve found this crisis to be a time
for recruiting exceptional talent that is looking to
reinvent itself, for new things to do, to enter into
new industries or new functions, and to stretch
themselves. I think this crisis has given people 18
months of self-reflection, and a lot of them are
asking, “What is the purpose of my professional
life in the context of my personal accomplishments
in life?” Coming out of this is a lot of talent that’s
popping up and saying, “I want to do things very
differently.” That’s a key consideration for CEOs in a
time of discontinuity.
Number three is the lesson that’s most obvious:
reconnect with yourself, with your family, with
what’s ultimately important to you in life. That’s
one of the things that, in many ways, actually
encouraged me to take that leap to a whole new
chapter in my life at this company. I suspect many
have been considering making that leap or that
transition, something that they ought to really
reflect upon and take quite seriously right now. Try
to take the time to do that.

Omar El Hamamsy is the CEO of Orascom Development. This interview was conducted by Vik Krishnan, a partner in
McKinsey’s San Francisco office.

Comments and opinions expressed by interviewees are their own and do not represent or reflect the opinions, policies, or
positions of McKinsey & Company or have its endorsement.

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Growth in a crisis: Lessons from hospitality CEO Omar El Hamamsy 5