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red sea resort taking shape

by hazel heyer

just when you thought egypt was close to saturation point for attracting overseas tourists, fresh developments on the southern red sea coast are gearing up to draw even greater numbers. port ghalib, an integrated port and resort community being built on 18 kilometers of pristine red sea coastline some 210 kilometers south of hurghada, is moving from blueprint to reality as marketing efforts begin in earnest on the first batch of prime residential units later this month.

developed by kuwait's m.a. kharafi group, the project is following a $1.2 billion master plan commenced in 2000. the plan envisions a multi-purpose resort community - served by air and sea - comprised of nine uniquely themed villages that include luxury residential units, resort hotels, retail space, a golf course, a yacht club and conference center - all served by privately operated water desalinization, sewage treatment and power production facilities.

whereas other resorts accommodate egypt's mainstream or already existing hotel brands, port ghalib will introduce a spa developed in collaboration with sun international, the creators of the famed sun city in south africa. already in operation is the 200-room coral beach diving hotel, a dedicated diving resort that opened in september 2005. three themed luxury resort hotels under construction will add 950 rooms by 2007.

the proximity of marsa alam international airport, just five minutes' drive from port ghalib, has had an undeniable impact on the region's rooms inventory. "in 1998, after we were awarded the airport bot (build, operate, transfer) contract, there were about 800 rooms in the area served by the airport. in 2001, when we opened the airport, there were about 1,500 rooms in the area. at the end of 2005, there were 7,500 rooms in the area served by the airport," says james pringle, senior counselor for the m.a. kharafi group. "the airport has been a major driver of tourism investments in the area, creating 25,000 new jobs and establishing the marsa alam destination on the international market."

the privately operated airport is intended to feed the port ghalib resort community, which is being developed in three phases over 12 years. all area dedicated to the marina village core project - port ghalib international marina, the three luxury hotels and the sun international spa, the conference and exhibition center, 15,000 square meters of retail and entertainment space, and 480 waterfront residences - is planned for launch in july 2007, about six months behind schedule.

pringle says the delay was due to unforseeable circumstances. "contractors have had a difficult time getting security clearances for workers since the sharm al sheikh [bombing] incident in july 2005, which in turn affected execution productivity by about 60 percent," he explains. "today, we are working closely with authorities now that the tragedy is behind us. we anticipate opening next year."

the construction holdup has consequently delayed the marketing campaign of the resort's residential units. pringle relates that m.a. kharafi group president nasser kharafi felt that unlike dubai, where units are often sold off-plan before anything is actually built, it was important that the port ghalib project approach completion before any sales and promotions began. "due to the challenges of egypt and for our own credibility, mr. kharafi felt port ghalib had to be very well under construction before we even start marketing houses," he said. "this way, people could come see, feel and touch the infrastructure, the marina, the hotels, the housing, and have confidence in the development and company."

pringle is bullish on the prospects. he predicts that when the marketing campaign for the first 480 residential units begins later this month, gulf and european buyers will snap them up. "we expect to sell out 480 units almost immediately."

he is equally confident about the project's future. "port ghalib is a long-term project, which started when egypt was receiving just 2 million visitors a year. we forecast that egypt will get 15 to 20 million visitors annually by the time port ghalib's final, longer-term phase is up and running," he said. "on the board are residential projects for 4,000 units."

but will the destination resort be able to compete with already established el gouna, soma bay, safaga resorts or the nascent marsa matrouh? pringle insists he doesn't see them as competitors. "these are quality developments for which we have respect - they reflect proper master-planning, land-use and environmental sensitivity. any development along those lines is good for egypt."

amr badr, abercrombie & kent egypt's managing director, says port ghalib offers tourism a fresh, new product. "now the industry is moving to the more exclusive destination of marsa alam. it's serene. it's development fits well with the model of the off-the-beaten track beach adventure or exclusive spot with a unique proposition." he said the port ghalib project is helping draw visitors to the deep south, which fits in line with the tourism ministry's strategy to diversify the tourism product, catering to a range of demands of clients, new and existing.

badr said that since egypt has overdeveloped hurghada to an extent, his exclusive market demands remote beach adventures further south. "it carries a lot of future for our market."

and the prospect of moneyed clientele. pringle explains that $22-a-day hurghada-style beach hotels attract one type of tourists, but quality resort destinations geared towards golf and spa-type customers allow egypt to capture higher-end, upscale market segments. "well-planned" spa resorts also help egypt compete in the international marketplace with dubai, for instance.

but that's not to say all resorts are alike. "a holiday in our resort will be different from others," he insists. "we welcome differentiation, variety and diversity, as this will eventually work for all of us."

new york-based ayden nour, the egyptian tourism authority's chairman for north america, believes the deep south appeals most to the european market, which updates its destination choices constantly. "sharm al sheikh has become very crowded and populated. tour operators in europe now request something new. marsa alam is a piece of cake to sell to their market as new and unheard of destinations usually get a good response from operator target audiences."

more challenging, however, is selling the resort destination to north american travelers. they won't travel 10 hours to go for sun, sand and sea - preferring instead classic historical packages. "recently, however, we have included a night or two in marsa alam, instead of hurghada and sharm, in some programs," nour said, adding that travel agents are still experimenting.

while the deep south operators are focusing their efforts on attracting european tourists, unfortunate events have reminded them of the fragile nature of the business. ahmed balbaa, chairman and ceo of balbaa group, whose five-star kharamana village hotel lies 30 minutes from port ghalib in marsa alam city, said business slowed down after italians stopped coming - following the sharm bombing and a recession in italy. "we felt the crunch when the italian market, now ranked fourth in egypt, produced very low demand. marsa alam is promoted heavily in italy, so when the market slows down [there], it hits our business."

so too does news of environmental degradation. environmentalists stress that the delicate ecosystems of the deep south's coral reefs could be at risk unless adequate measures are taken to protect them from the onslaught of tourism. the egyptian environmental affairs agency (eeaa) has responded by installing shamandouras, buoys that act as fixed mooring points, on coral reefs in the spectacular samaday reefs region near marsa alam to protect the reefs from anchor damage.

"the environmental awareness unit of red sea national parks gave all diving centers and tourist villages based in hurghada and safaga, [specific instructions] in connection with responsible diving in the area of the samaday reefs, to protect marine life," says hesham kamel, general manager of red sea diving safari. he added that a $11.4 million program financed by an italian grant and under the supervision of the eeaa and undp was supporting work to protect sensitive marine ecosystems in the area.
in the end, he assured, businesses operating in the deep south are the winners. environmental protection is simply good business.

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