Egypt: Red Sea Goes Green

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Tourists might associate Egypt with the Pyramids and the Sphinx, but the Ministry of Tourism is hoping that the country will also become known as a leader in sustainability. In 2008, a number of new programmes were launched to protect Egypt's natural resources and preserve its cultural heritage.

An increasing number of visitors means that Egypt is more concerned than ever about protecting its environment, even as it works to promote a growing array of diverse tourist destinations.

In the face of competition from other Mediterranean locations, Egypt has tried to maintain its tourism supply at affordable prices. The strategy seems to have worked, as the country saw a 25% increase in tourist arrivals from June 2007 to June 2008, with numbers growing from 9.8m to 12.3m, according to Tourism Minister Zoheir Garranah. This is a significant increase for a sector that already accounts for 11.3% of the country's GDP and employs 13% of the total workforce. Speaking with OBG, Garranah said that the government plans to increase the number of tourists to 14m by 2011, in spite of probable repercussions from the global financial crisis.

Analysts predict that while some travellers may decide to stay home, those with less limited means will continue to visit Egypt. "We are still comparably priced, so for the middle class tourist, Egypt is still a desirable and affordable destination," Mohammed El Shabrawy, vice chairman and managing partner of American Express Travel Services, told OBG.

However, as the industry expands, developers must be careful to strike a balance between attracting mass numbers of travellers and protecting the country's natural habitats. The Red Sea governorate - which accounts for the greatest number of hotel beds after South Sinai - is a key attraction for leisure tourists, and has been one of the major targets for sustainable initiatives. With its coral reefs and sandy beaches, the region is a popular spot for ecotourism, but also faces the risk of overdevelopment, as plans to nearly double the number of rooms from 51,043 to 96,886 began in 2006.

An example of the Red Sea's sudden prominence as a travel destination was its recent appearance on The New York Times' list of "44 Places to Go in 2009." But in an earlier article, the paper had warned that Hurghada, the region's main resort, has already seen much of its natural beauty eroded, and that visitors are better off diving from smaller coastal towns such as Ain Sukhna or Safaga, or even forgoing the region all together in favour of the Sinai Peninsula.

In a bid to reduce the environmental impact of the growing influx of tourists while maximising economic opportunity, the Tourism Development Authority (TDA)Tourism Development Authority (TDA) and Egyptian Environmental Affairs Agency (EEAA) partnered in 2005 with the US Agency for International Development (USAID) to launch the Livelihoods and Income from the Environment (LIFE) programme. The $20.5m initiative ended in September of last year and focused on three major components of environmental protection in Egypt: integrated water resources management; lead pollution remediation and clean-up in the Qalyoubia governorate; and support for sustainable economic growth in the Red Sea governorate. The Red Sea region in particular received $12.7m, with funding going toward technical support, the implementation of new training programmes and fostering general awareness of environmental issues. More specifically, LIFE helped design community-based solid waste systems in Marsa Alam, Hamata and Shalateen, along with a house reef management system for Red Sea hotels. The partnership also helped the EEAA to designate 14 islands in the Red Sea as protected territory, thus preserving approximately 17,000 sq km of sensitive habitat.

Although the LIFE programme has been completed, it is only the beginning of what looks to be a long-term commitment to making the Red Sea green. In November, at the opening of the UN World Tourism Organisation (UNWTO)-supported conference for the Middle East and Mediterranean regions, "Tourism: Responding to a Turbulent Economy and Changing Climate", Egypt declared the resort town of Sharm el Sheikh to be the world's second "EarthLung" destination after Sri Lanka - a designation that indicates the area will work toward becoming carbon neutral. No timeline has been announced for the Egyptian plan, although the Sri Lankan effort is projected to last ten years.

The government's emphasis on sustainability also offers opportunities for private developers. In July 2008 the Egyptian Ministry of Tourism, AGEG Consultants eG and Orascom Hotels & DevelopmentOrascom Hotels & Development joined together with the German Society for Technical Cooperation (Deutsche Gesellschaft für Technische Zusammenarbeit - GTZ) to create the Green Star Hotel Initiative, an environmentally friendly hotel management system. The initiative will target a number of areas, including a 10-30% reduction of energy and water consumption; waste management and sewage treatment; increased use of renewable energy; and heightened awareness and capacity for environmental protection. Hotels that fulfill requirements will be certified as meeting a certain standard of environmental sustainability. The programme is using the El Gouna area on the Red Sea as a pilot location, with eventual plans to spread the brand across the Middle East.

With Egypt pushing a more proactive policy on environmental protection, now might be the perfect time for developers to shift their energy away from mass tourism to more specialised sustainable investments. Smaller, higher-end projects will protect Egypt's natural attractions and offer high returns for the future, providing a solid investment even in uncertain times

© Oxford Business Group 2009