Words: Ashley Rigg
Published: 31st January 2011
*Surprise Red Sea tourism surge
Despite the growing social and political arrest in Egypt’s major cities, tourist numbers are on the rise in resorts around the Red Sea, according to industry reports.
Lee Ward, director of Pioneer Property, which promotes resorts in Sharm el Sheikh, believes that although it is too early to predict the longer-term effects of the current crisis, the immediate impact has been positive:
“Many people booked on tours on the Nile and trips to Cairo prefer to come to the Red Sea on the advice of their tour operators rather than cancel their holidays”, he says.
Barry Clark, Marketing Director of Orbit Alliance, a large agent/developer in Hurghada agrees:
“It seems a lot busier than usual for this time of year, although it is doubtful whether more business is being done as the banks will not re-open until tomorrow”.
The main immediate impact has been the result of some hotel and resort staff ”overreacting” this weekend according to Ian Marsh, director of Think Egypt, a consultancy which advises the Egyptian government on residential tourism.
“Many of the hotel staff in Sharm el Sheikh are not local and have over-reacted by asking some residents to stay in their rooms when the crisis is hundreds of miles away”, he says.
Likely outcomes
Marsh has some useful insights on how the current crisis may play out:
“There is likely to be an affect on tourism in the Spring as tour operators take less bookings as a result of the negative media coverage. However, in the longer term, Egypt should become stronger".
"The crisis should force much-needed reforms and I can't see the West allowing such an important political ally become unstable, the world is watching”, he says.
Marsh predicts Mubarak will step down once his new Prime Minister has established a coalition government.
Ward agrees and is keen to emphasise the non fundamentalist nature of the crisis:
“This is about is food prices and quality of life. Egypt is a moderate country, it has nothing to do with religion or terrorism”, he says.
Buying opportunity?
Although it is difficult to believe that the worldwide media storm currently engulfing the country will not have a short-term effect on overseas property transactions, the risk to property rights seems low and for the brave investor the crisis will create a short-term buying opportunity.
“We are expecting to see the [foreign exchange] markets to re-open at 9.6 or 9.7 (Egyptian pounds to the British pound], around 20% lower than last week” says Ward. “Buyers will be able to save £10,000 on a £50,000 property”,says Ward.
It is difficult to predict the damage this weekend's media coverage will have on demand, but for those working and holidaying on the Red Sea it seems to be more or less
business as usual. At least for now.
Source: Global edge
User Comments
Hi Colin I do understand how you feel when you see the hype put on the situation in Egypt by the Western Media. My company, Egypt Real, are based in Hurghada and I have been out with clients for each of the last three days; all were apprehensive but none have canceled. The Egyptian people are some of the most friendly in the world and Mubarak's departure, whether now or in a few months is extremely positive.
Hurghada and Sharm are quiet and it is very much business as usual; we have had no internet for the past week and no Skype.
Of course some people will be unnerved by the media reports but it is worth remembering that this is not about ethnic or religious differences; this is the people against a repressive, corrupt government. Everyone agrees they have to go; the differences are about how soon.
Prices may or may not be affected by this but the pound will open up to 10% stronger when the banks reopen tomorrow and this will be a great buying opportunity for the serious investors who can see beyond the current situation.
Peter Mitry,
Egypt Real
Hi Colin,
The situation is terrible but not in the holiday locations. I've spoken to lots of people on the ground about this.
We don't have any Egyptian advertisers. It's easy to judge a massive country when you are miles away from it.
I strongly believe this will turn out to be a buying opportunity although the effect on transaction volumes in 2011 is unlikely to be good as most holiday home buyers won't see it that way.
Ashley Rigg,
Global edge
With tour operators throughout Europe cancelling flights, I´m lost for words to read a headline from Global Edge stating "surprise surge in red sea tourism".
I´m surprised that anybody in Egypt would blame "negative media coverage" for an anticipated drop in tourist numbers.
Many countries, including the USA, China, Japan and Holland are not merely telling people not to travel, but are actively evacuating citizens already there. Are they overreacting to the negative media coverage too?
I realise Sharm el Sheikh is nowhere near Cairo, Suez & Alexandria, but it is part of Egypt. An autocrat who has been in power for 30 years is responsible for killing a couple of hundred protesters, injuring thousands more and is facing an unprecedented challenge to his power.
Doing your bit to protect struggling developers and property agents is all well and good, but let´s draw a line somewhere shall we?
Kind Regards
Colin
Colin Murphy,
Torcana Ltd