Six Continents larges it in Egypt

As it prepares to open more properties in the country, the UK-based company disagrees that Egypt is suffering from hotel over development.

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By  David Ingham Published  September 18, 2002

Six Continents Hotels is gearing up for a big expansion of its activities in Egypt. InterContinental Garden Reef Resort Sharm El Sheikh will become the company’s sixth InterCon property in Egypt when it opens in October, and the company will be managing two hotels at the CityStars Heliopolis Cairo.

“The beautiful new InterContinental resort at Sharm El Sheikh, and the two new CityStars hotels, form part of a major development programme in Egypt where we will have 16 properties under management by the end of next year,” says Raymond Khalife, president, Six Continents Hotels, Middle East and Africa.

The Sharm El Sheikh property is being positioned as a convention and seminar centre. It will include a multi-purpose main conference area, four smaller meeting rooms and a business centre.

CityStars is a $600 million complex, scheduled to open next year, which will combine shopping, entertainment, office and residential facilities.

These new developments are the latest additions to a portfolio that began to expand early this year when Six Continents took over three Egyptian properties in Alexandria. These are now operating as the Inter Continental Windsor Palace Alexandria, the InterContinental Le Metropole Alexandria and the Holiday Inn Resort Alexandria.

Six Continents' big expansion of its activities in Egypt might be surprising, given the fact that the country’s tourism development policy, particularly in the Red Sea area, has come in for a lot of flack recently. Detractors say that too many developers have been allowed to plough into coastal areas, driving room rates down to unsustainable levels.

Magdi Samman, Six Continents’ MEA sales and marketing director, insists, however, that the Red Sea remains a durable destination. “This criticism has largely been aimed at the Red Sea region which, over the years, despite instability from time to time, has proved that it is a product that is constantly evolving, and able to stand on its own two feet, and appeal to new market segments,” he says.

At a time when tourists from Germany and Italy are declining, he says that visitors from other Middle Eastern countries are increasing. “From our point of view, as a company which manages five Red Sea resort hotels, out of a total of ten InterContinental, Crowne Plaza and Holiday Inn properties in Egypt overall, we feel it's necessary to maintain a generous inventory of rooms in order to build a destination and put it on the map,” Samman says.

Although he concedes that 24,000 hotel rooms in Sharm El Sheikh may seem like a lot, he insists hotels there were full in August.

To back up his argument about Egypt’s viability, Samman reveals that Six Continents’ contracts with the owners of the hotels it manages are structured to reward performance.

“Our income from the hotels we manage is influenced by revenue and occupancy, and we have a great deal of confidence in our Egyptian properties,” he says. “We see our relationship with each of the owning companies and financial institutions as a partnership. We work hand in hand to make each partnership more profitable for each of the parties.”

Six Continents Hotels now manages 64 InterContinental, Crowne Plaza and Holiday Inn properties across the Middle East. Egypt’s fifth Holiday Inn Resort opens later this year at Taba and two more InterContinental resorts open before the end of 2003 at Taba Heights and Soma Bay.

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