Egyptian Resorts expect Egypt holidays to boost land sales for 2011
Egyptian Resorts Co. is investing its efforts in the hope that the boom the Egypt holidays market are experiencing at the moment has a ripple effect in boosting their land sales for 2011.
Putting their hopes in the development of the Egypt holidays market, the second- biggest publicly traded Red Sea resort developer, Egyptian Resorts Co. expects a recovery in tourism to boost sales of land in its Sahl Hasheesh project in 2011, Chief Executive Officer Mohamed Kamel revealed.
“We’re basing our optimism on sales in 2011 on more hospitality business,” Kamel said in an interview at his office in Cairo yesterday. “What we are seeing is despite the sentiment on the residential market is that hospitality is not suffering as much. Tourism figures speak for themselves.”
This year, Egypt holidays recorded an impressive 24 % increase in tourism revenue in the first quarter of 2010 as the industry recovered from last year’s global financial crisis. Such figures were unveiled by tourism minister Zoheir Garranah during an interview in April. He also revealed that revenue rose to $2.7 billion as tourist arrivals grew by 29 % to 3.46 million.
“We were betting in early 2009 that the Egyptian tourism industry would not be as badly affected as everyone thought,” Kamel added. “Our theory was not that people would not go on holiday but that people will look for inexpensive destinations to go to. Egypt remains one of the least expensive destinations in the entire Mediterranean.”
The general health of Egypt's economy, depends heavily on tourism and the quantity of foreign visitors taking Egypt holidays and injecting cash into the hotel and hospitality sector. The country's second source of income is foreign direct investment and the Suez Canal, for foreign currency. Tourism, which accounts for more than 12 % of jobs, generated $10.76 billion in 2009, according to figures published by Egypt's tourism ministry.
Egyptian Resorts, which owns a 41 million square meter plot of land 22 kilometres south of Hurghada on the Egyptian Red Sea coast, hasn’t sold a plot of land since 2008, Kamel said.
“We could have sold land in the past 18 months but we would have been hurting ourselves in the long term instead of helping the overall project,” he said. “We would have oversupplied the market with residential units and we would have been selling this land at a lower average price per square meter then what was achieved in 2008 which was $142.5.”
Egyptian Resorts is currently in talks with a number of sub-developers in the hospitality business, some of them who already own land in Sahl Hasheesh, to sell them plots as credit lines for these developers ease up, he said.
Egyptian Resorts shares fell 1.5 percent to 1.92 Egyptian pounds at the 1:30 p.m. close in Cairo today, valuing the company at 2.02 billion pounds ($354 million). The company’s shares have gained 16 percent this year, compared with a 3.2 percent gain in the benchmark EGX30 Index.
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