By Reem Abdellatif
CAIRO: Egyptian Resorts Company (ERC), a developer of mega communities, is seeing occupancy slowly return after the January 25 Revolution, with a 40-50 percent capacity.
“The first couple of weeks after the events of the revolution, we saw capacity drop as low as 1-5 percent, so what we are seeing now is definitely on the right track,” Nader Abdallah, financial analyst at ERC, told Daily News Egypt.
When comparing today’s occupancy with the rates before the revolution, Abu Bakr Makhlouf, head of investor relations, pointed out that right before January 2011, capacity was close to 100 percent.
ERC, home of Tropitel, where the first Buddha Bar Hotel is due to open in Egypt, is planning to launch very soon a new public beach in the downtown area of Sahl Hasheesh, which they own.
The public beach will be open to all visitors in the resort town, including residents as well.
“We were planning to launch the completed downtown area, along with our new public beach this summer,” said Makhlouf. “But, because of the recent events in the country, we decided to put it off until we get a feel of how things are going to go.”
Operating in the town of Sahl Hasheesh, which is 20 km south of Hurghada in Egypt’s Red Sea coast, ERC controls the land supply in the area.
Although land sales are the most profitable measures for the company, ERC has not sold any land for the past two and a half years.
“We control supply because imagine if 50 hotels opened up at the same time in the same district, this wouldn’t make sense, we’d actually be hurting the market,” said Makhlouf. “We also control whatever gets built, we manage everything in order to make sure infrastructure is all organized and no random compounds or houses are built.”
Today, one of ERC’s main goals is to transform Sahl Hasheesh from a resort town into a year-round community.
Although sales now in Sahl Hasheesh are very low due to the recent political turmoil that hit investors across the country, ERC managed to sell $22 million worth of property before during quarter one in its Sawari property.
Orascom Development Holding (ODH) manages the development of Sawari, located in Phase II in the Marina of Sahl Hasheesh, and ERC remains the owner.
Makhlouf pointed out that Sawari is a rather unique project, setting it aside from other resorts and vacation residential units in the country.
Mediterranean-style architecture decorates the coast of the Sawari Marina, making it a unique destination in Sahl Hasheesh.
“Sawari is the only marina in Egypt where you have a beach and entertainment facilities at the same time, while in other places you have to venture out to find restaurants or entertainment venues,” he added.
Currently, as business for tourism and real estate is slow, ERC is focusing on investing in the infrastructure of their current venues as well as developing marketing and public relations campaigns to target Egypt, Gulf countries, and parts of Europe.
“We are preparing the business now so that when things come back, we’ll be ahead of our competitors,” said Makhlouf.
The company is also in the process of creating representative offices in Moscow, Qatar, Dubai, Bahrain and Saudi Arabia.
According to Makhlouf, this network of bureaus will represent the company abroad and help them complete their infrastructure in order for the company to always be one step ahead.
Although there are several investors discussing possible ventures and expansions with ERC, they are currently pending stability and security in the country, Makhlouf added.
Sahl Hasheesh, which is about two-thirds the size of Manhattan, currently has three phases, while Phase I has all been sold and Phase II is in the process, ERC will not touch Phase III for the next five to six years until they start selling land, according to Makhlouf.
The town has its own office parks, schools, hospitals, and entertainment as well as food venues.
Founded in 1995, ERC has been publicly listed in the Egyptian Stock Exchange since 1999; it is a public-private partnership.
ERC has several strategic partners including companies like Davis Langdon, Mobility in Chain, Buro Happold, Environics, and ODH.
Operating in the town of Sahl Hasheesh, which is 20 km south of Hurghada in Egypt’s Red Sea coast, ERC controls the land supply in the area.
