In the land of the Pharaohs, tourism deserves a monument all its own. The number of tourists visiting Egypt has consistently risen since 2002, topping 9.7 million people in fiscal year 2006/07 — an 11.6 percent jump over the previous fiscal year. Wanting to boost those figures even more, the government has started promoting not just resorts but also residences.
“Real estate and residential tourism are one of the strongest bases for developing the industry," said Minister of Tourism Zohair Garana at a press event in early 2007. The ministry’s rationale: “Why make Egypt a once-in-a-lifetime trip when you can come back to your own seaside home every year?”
Tourism is big money in Egypt. In FY 2006/07, visitors brought in $8 billion [USD] in revenues, representing 3.5 percent of the gross domestic product, to say nothing of the $780 million in investments to house them.
The Ministry of Tourism wants to reach 14 million foreign tourists by FY 2011/12, generating $12 billion in revenues. This will require additional investments worth $7.9 billion over five years, creating an estimated 1.2 million new job opportunities. Tourism accounted for 12.6 percent of employment as of March 2008.
Residential tourism was given a first serious push in 2006 when the government passed legislation making it easier for foreigners to buy, own and resell property in Egypt.
“We are definitely targeting Arabs, but the number-one spenders on residences outside their own country are the Brits,” Elhamy El-Zayat, former head of the Egyptian Tourism Federation, told the English-language monthly Business Today Egypt in 2006.
More than 15 years ago, the integrated resort community of El-Gouna was literally carved out of a bit of coastline north of Hurghada. Local and foreign investors are now looking to apply that successful model to other parts of the Red Sea and Mediterranean.
Another first-mover in Red Sea projects, Egyptian Touristic Resorts has been developing 32 million square metres called Sahl Hashish over the last 10 years.
“Categorically we are the largest fully integrated resort under a single management team worldwide,” says Richard Turner, the CEO of Egyptian Touristic Resorts. “The capacity of Sahl Hashish is [more than] 200,000 dwellings, meaning 70,000 hotel rooms, 70,000 villas and 70,000 apartments. In context, it is larger than Downtown Cairo in area.”
El-Gouna targeted the local upper class, but today’s real estate investors have set their sights higher. Brands slated for Sahl Hashish, for example, include One and Only, Four Seasons and Shangri-La Casinos, to name a few. Serenia, an ultra-luxury hotel development, is set to be the crown jewel in the Sahl Hashish complex.
“The Trump Organisation will be fully behind Serenia, as it will have the highest investment per room in the world,” says Turner.
Egyptian Touristic has plans to expand to Berenice on the South Red Sea and Dahab on the Sinai coast.
“These two projects will be similar but smaller than Sahl Hashish,” Turner explains. “One of our goals is to connect all three locations via [sea routes]; this will be the first time any investor has ever done this type of connection to three ultra-exclusive locations on the Red Sea.”
Talaat Mostafa Group (TMG), another local contracting company, is also investing, using a strategy of establishing well-known brand franchises in the local market.
“Our strategy and philosophy stresses a variety of revenue schemes. We are expanding our tourism sector with a new addition — Four Seasons Luxor — that’s just getting underway,” says Hisham Talaat Moustafa, TMG’s managing director and CEO. TMG brought the Four Seasons brand to its luxury high-rise San Stefano project in Alexandria.
Turner sees the window of opportunity lasting another 30 years until the local market catches up with the global market, noting the country’s Mediterranean shore still has huge untapped potential. “It is my assessment that if the North Coast, west of Alexandria, is properly developed, it would be bigger than Hurghada and Sharm El-Sheikh put together,” he said.
Travco Properties and Engineering, the development arm, has already moved in on the North Coast with the Almaza Bay project, a five million square metre resort community west of Marsa Matrouh.