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Wednesday, 24 August 2022

How Egypt plans to become a global yacht tourism destination

Egypt wants to position itself as an emerging yacht tourism magnet on the global scale: As Egypt looks to capitalize on and regulate a burgeoning yacht tourism industry in the country, the Madbouly government greenlit the regulations managing yacht activity in domestic ports earlier this month. The regulations lay out everything from the permits required for yachts to enter and exit the country, the services that different government entities will provide, the requirements from yacht owners, and the docking fees they will be subject to in Egypt. With these regulations in place — and with the help of our favorable geographic positioning — yacht tourism could be well-placed to grow, our sources tell us.

The push to capitalize on this up-and-coming form of tourism makes good sense: Egypt has some 2.4k km of coastlines on the Mediterranean and Red seas, tourist resorts located near historical and tourist cities, as well as prime diving spots and popular marine sports.

The business case is also clear: Yacht tourism is a solid source of FX inflows, considering that it’s wealthy individuals who own or have access to yachts. The daily spend of those visiting Egypt via yachts is 94% more than the average tourist, former tourism minister Khaled El Anany previously said. Globally, the size of the yacht tourism economy, excluding onshore spending, hovers around the EUR 12 bn mark.

The Mediterranean is a hotspot for yacht tourism: Half of global nautical tourism is concentrated in the Mediterranean alone, which draws in over 30k yachts a year, according to the State Information Service (SIS). European countries overlooking the Mediterranean are currently dominating the yacht tourism sector, attracting an annual USD 150 bn from the sector.

It’s also particularly popular among our friends in the GCC: Yacht tourism provides a great window to double the tourism spending of those visiting from the Gulf, our sources in the tourism industry tell us.

There’s also a sizable yacht tourism clientele here at home: There are currently around 1k luxury yachts flying the Egyptian flag in the Red Sea and Mediterranean, Ayman Nassef, marine unit insurer at the Suez Canal Ins. Company told us. That’s in addition to yachts owned by Egyptians, but flying foreign flags. He added that the pandemic has little to no impact on the local purchase of yachts, seeing that those with the capacity to purchase yachts are extremely wealthy and their income wasn’t affected by the pandemic.

The current lay of the (metaphorical) land: Egypt currently has 23 yacht marinas and berths. It is also home to the North Coast’s 500-berth Porto Marina Resort, which overlooks the Mediterranean sea and can accommodate over 1.4k yachts. It is the first international yacht marina in the eastern part of North Africa. We also have Hurghada Marina, which can accommodate around 188 yachts at a time. Egypt is also home to the Taba Heights Marina, which can accommodate up to 50 yachts and provide them with maintenance services as well, and El Gouna’s Abu Tig Marina and Sharm El Sheikh’s Marina Naama.

How much are all these yachts going to be paying? The new regulations set daily docking fees at USD 4-14 per meter length of the yacht, with longer yachts paying more per meter. The fees are set for yachts ranging from 10 meters to 90 meters and above. The fees are fair and are on par with average docking fees in international marinas, Ain Sokhna’s Wadi El Dom Marina Director Ihab Taher told Enterprise.

There’s more marinas coming, too: In a bid to boost yacht tourism, the state is working to build more marinas, including: An international port in New Alamein, a marina with the capacity to accommodate up to 333 yachts in El Galala, and the c.EGP 24 bn Marassi Marina and Yacht Club, courtesy of Emaar Misr, which is set to become the first international marina in the North Coast to accommodate over 260 yachts.

But it’s not just about the physical infrastructure. The government is putting in place a strategy to attract yacht tourism through a ministerial committee headed by Transport Minister Kamel El Wazir and Finance Minister Mohamed Maait. The strategy is set to work out how to raise the efficiency of yacht marinas and build more in the country’s most prominent tourist attractions, based on a revised blueprint for the currently built marinas. The Transport Ministry’s Maritime Transport Sector will be tasked with the application of the strategy and ensuring its sustainability and implementation.

A key pillar of the in-the-works strategy and the new regs: Streamlining procedures and introducing digitization. A complicated web of bureaucracy to receive permits is among the biggest complaints from the industry and yacht owners, which has been slowing down yacht tourism in Egypt, Taher told us. The Transport Ministry has introduced a digital platform for tourist yachts, which will be the one-stop-shop for tourist yachts, managing, developing and issuing the necessary approvals and permits. “The platform currently allows yacht owners to obtain all the necessary approvals from the concerned authorities with ease,” Taher said. The new regulations will also see the ministry issuing unified invoices through EGX-listed, state-owned fintech player e-Finance.

Making things easier will put us at a better advantage above regional competitors for yacht tourism, including Turkey and Greece, Taher anticipates.

But we could also join forces with these competitors for joint tourism programs, which could help support our competitive position, suggests Atef Abdel Latif, a member of the Tourism Investors Association in South Sinai and Marsa Alam. We’re already friendly with eastern Mediterranean neighbors Greece and Cyprus and Egypt recently discussed cooperating on yacht tourism with these two countries. The state has also recently started operating flights between Red Sea resorts and Luxor, which could support these joint tourism programs, House Tourism and Civil Aviation Committee head Noura Ali suggests.

Your top infrastructure stories for the week:

  • We’re adding 500k tons to our silo capacity: The Supply Ministry is building wheat silos in Toshka with the capacity to hold 500k tons of grain.
  • The Supply Ministry has inked contracts with private sector players to build three new commercial trading and logistics centers worth EGP 2.4 bn — one each in Dakahlia, Suez and Kafr El Sheikh governorates.
  • Telecom Egypt and Orange Jordan will launch a terrestrial network that connects Iraq to Europe in 3Q 2022.
  • Rameda Pharma has opened a wastewater treatment plant that is expected to halve its annual water consumption.
  • A new logistics zone in Sokhna: The Suez Canal Economic Zone’s Main Development Company and DP World Sokhna have signed an agreement to build a USD 80 mn logistics zone at Sokhna Port.

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