HISHAM ALY Chairman and Managing Director of Sonesta Beach Resort & Casino

P.M Communications: As one of the first developers in Sharm El Sheikh, could you please share with our readers the way you started your hotel business and created Sonesta Beach Resort?

Mr. Aly: I came to Sharm El Sheikh in 1987 and I was one of the first investors to discover the beauty of this area. For me, Sharm was a place to relax. I fell in love with this area, as I love diving and fishing, and from the moment I would get into Sinai, I would somehow feel purified.

At the beginning, it was a very big challenge because the place was not like it is today. When I first came here there was only a very small airport, I do not even think I should call it an airport, it was just a runway and there were only a couple of rooms. There was also no water here and the only source of water was a place called El-Tur, 110 km away from Sharm El Sheikh, so we had to dig into the mountain.

The accommodation for the construction workers did not exist, so we managed to setup a little compound for them and started the project. The first problem we faced was that all the necessary material, such as cement, bricks, wood, etc., had to come from Cairo, because there was literally nothing here. I have a lot of experience in construction, as I worked in the construction of the first metro line in Cairo and other projects done with the USAID.

At that time, the government officials urged me to buy the land here and invest in this area, so I signed the contract. I started building and the people were looking at me and saying "Who is this crazy man building a hotel in the middle of nowhere?!" But I am a constructor and I love creating a paradise from nothing. That is how we created Sonesta! There were only two five star hotels at that time and the business was great, the room rates were high and all the money that we had invested returned in just a couple of years.
That is why we continued investing and we created the Sonesta Club. We also built our own desalination plant, the first one in the area. Step by step everybody started looking at Sharm El Sheikh and new investors came very quickly to see what was going on here and the place started booming.

P.M. Communications: Who were the first tourists coming to Sharm; where were they from?

Mr. Aly: The first tourists coming here were mainly Germans. The British started coming only 6 years ago. We were promoting in the UK but we did not have something special to attract them. Sometimes it is hard to make the Europeans change their typical destinations, whatever you promote. If for example, the British like spending their holidays in Spain, they will always go to Spain.

In fact, President Mubarak was the one who started promoting this destination. He insisted on hosting in Sharm El Sheikh all the peace conferences taking place in Egypt, and that is how the name of Sharm El Sheikh became popular internationally.

As for the British, the repeated visits of Prime Minister Blair were crucial. They started wondering why would their Prime Minister go in the middle of nowhere to spend his Christmas holidays?! They knew he must have had a good reason and they started coming to see for themselves. The word of mouth is very important in our business and it was a great promotion for us. If you go somewhere and then tell your friends how nice it was and what a great time you had, you will motivate many people to visit that place.

Another very important thing is that today there are regular flights between Sharm and the UK. At the same time, the hotel infrastructure has greatly improved and we can cater to the demand of all profiles of tourists. We have also increased our promotion in the British market. The number of tourists coming to Sharm for just a week or two has decreased. Now, more and more people want to own their own place here and a lot of foreigners are buying a second home in Sharm. Sharm El Sheikh is not a big society and we look forward to the mixture of the British and Egyptian culture.

P.M. Communications: Unlike other resorts currently being developed with master plans along the Egyptian coasts, Sharm El Sheikh has grown in an organic, spontaneous way. How do you feel about the way the Sharm is developing and how do you see it 10 years from now?

Mr. Aly: I think that Sharm has developed in a very nice way because if there was only one style, it would be boring. Sometimes when a project is too planned it becomes very boring. It is like walking through a compound from one villa to another and the only difference you see is the furniture. In Sharm, different owners with different tastes and mentalities offer different styles and different facilities. Everyone is free to do what he wants with his property, and I cannot go to an investor who owns a piece of land and tell him what he has to build. There is one rule that we all stick to which is that we are only allowed to build on 20% of the land that we own, the rest has to be greenery.

Sonesta for instance, has been built in Arabic - Moroccan style. When you go inside the hotel and walk around very soon you will say: "This is Egypt"! The Four Seasons offers luxury, while other hotels have boutiques styles, etc.

I personally like Sharm the way it is and the way it grew up. In the future we will stop every construction. As an Association, we said that enough is enough; we cannot have more than 50,000 rooms in this destination. Currently, we have 42,000 rooms, but we will reach 50,000 rooms once the units under construction will be finished, and then we will have to stop.

We need to focus more on entertainment projects, because 50,000 rooms without entertainment will not only be boring, it would become a nightmare.

P.M. Communications: Could you tell us more about the activities of the Investors Association?

Mr. Aly: The Investors Association is working very hard with a strong support from the government in order to upgrade Sharm's facilities and services, so that our visitors feel that they are in a civilized place from the moment they come out of their plane. Our job is to try to solve all the problems that the private and public investors are facing.

For example, we are working on a project called Sharm Limousine. A tourist cannot ask for a taxi and get an old taxi model from 1980! Soon they will find only new cabs on the streets of Sharm. We are also planning to make some facilities for public transportation.

We are also paving the roads as it is very important to minimize the accidents. We are discussing this issue with the government. We need real roads and a highway in order to minimize the accidents as they do not happen always because of the drivers or the buses; sometimes it is because of the bad state of the roads.

In addition, we are establishing a big recycling plant, which will be totally constructed by our Investors Association. We are also planning to build Olympic training facilities in a resort where different international teams will be able to come and to train during the whole year.

We are keen on doing something for the kids, something like an amusement park. We already have one and it is ok for the time being, but we are working on an A1 park. We will also build amusement theaters with programs for adults and kids. Also, near the mosque there is a museum that is under construction.

I have the best Casino in the Middle East region, the Sinai Grand Casino. When you go there you will find yourself in Las Vegas and there is another Casino coming.

The good thing about Sharm is that it has something to offer to everybody; when you come with your family, you will find yourself in a family destination, when you come alone you will find yourself in a destination offering a lot of varied and exciting entertainment.

P.M. Communications: Would you say that the dialogue with the government has improved since Dr. Nazif's Cabinet has been appointed?

Mr. Aly: The current Minister of Tourism, Mr. Garranah, is our friend and he understands very well the business and the needs of the investors. We are both coming from the same school, we suffered together and we faced the same problems together. It is nice to talk with someone who has the same mentality as us. We all know that his time is very precious, but when we need something, we can call him and he will be there for us. He likes being updated with the latest news in the sector and he listens to us. I can say that, indeed, we have a very good communication with the new Minister of Tourism.

In the past, there was a big conflict between the private and the public sector and we suffered a lot. But now, we have the support of the Minister and we know that he is doing his best to bring Egypt to the top level of the world tourism scene.

P.M. Communications: In 2006 more than 9 million tourists visited Egypt and Ministry's goal is to reach 14 million tourists by 2011. How realistic and sustainable is this projection of growth?

Mr. Aly: If the Ministry is projecting this goal, it means that they are working in this direction and the plan is realistic. As an investor, I am speaking the same language. When I tell you that my hotel will have 90% occupancy next year, then it will be 90%, because I know what efforts I will make in order to reach that figure. So when we say we will do something as investors, we will deliver because we know how to do it. Minister Garranah was an investor before becoming a minister, so I think he will deliver!

P.M. Communications: The Egyptians are famous for their traditional hospitability and friendliness. However, in order to cater to the needs of high-end tourists, there is an urgent need to upgrade the quality of services. How do you deal with this challenge?

Mr. Aly: This is a very important question and, to be honest, we have suffered a lot because of this issue when we first started building and managing our hotel. Our human resource department organizes training programs in a professional way and it costs us a lot of money, but it is important to invest in our staff in order to have qualified professionals who can bring the guests back. A guest will never come back just because the hotel is beautiful, but he will come back if the service was good and the personnel made him feel at home.

Mr. Hussein Salem and I suffered a lot when we opened our training schools of Sonesta and Mövenpick. We trained a lot of staff and other hotels came to steal some of our employees. Some people may call this healthy competition, but I personally think it is unhealthy for the employees. For example, I do not think it is good when a restaurant manager is leaving you, not because he is unhappy, but because he is becoming a food and beverage manager in another hotel! How can someone have such an important function with such limited experience?!

It was quite scary, but we continued training our people and we established training schools. Also, the Ministry of Tourism has allocated some funds for training the human resources. There is nothing to worry about. Egyptians are very clever, and many of our employees start speaking basic Italian, Russian, English, or French just after a couple of months. These people are self taught, they learn through their communication with the guests. So this communication in itself becomes a school of training in addition to the professional training that we organize.

We also take very good care of our staff. They live in spacious, air-conditioned rooms and get basically the same food as the guests. This is part of our human resources philosophy: we treat our staff kindly and then they are ready to be trained properly. Because when you treat people well, they will be receptive to the training and in turn, they will deliver the standard of service that we expect.

P.M. Communications: With the implementation of the new property law in Egypt allowing foreigners to buy second homes on a free hold basis and on a 99-year lease in Sinai, there has been a significant interest from foreigners to buy properties here. How important is residential tourism for Sharm El Sheikh?

Mr. Aly: Residential tourism is very important for Sharm El Sheikh. Someone who has an apartment or a studio here will bring at least hundred guests in his lifetime. This is also an indirect promotion for the hotels, because not everyone will buy a property here, but when people talk about where they went on vacation, it is better than any kind of marketing.

Currently, there are only about 2,000 units available for sale in Sharm, which is not too much. Nowadays practically everything is sold out because 60 m2 only cost 60,000 Euros over a three year period to be paid in installments, meaning that every year you will have to pay only around 20,000 Euros.

I plan to construct units for sales, but I have not start marketing my project yet. I will go to London to attend the exhibition of selling and buying apartments, because I want to see the latest trends and know what the customers want. Once our master plan is finished, we will be able to rent the property for the clients and we guarantee a 10% return on investment during the course of the year. This is phenomenal when compared with the return you could expect if you went to the bank with the same 60,000 Euros and only earn around 2%.

P.M Communications: Do you think that Egypt has the potential to become "the new second home for the British"?

Mr. Aly: It is a very difficult question. As you know people like stability, so we need stability in our country and in the region first. The Egyptians are the friendliest people in the world, so when there is stability, I predict that everyone will want a home in Egypt. Besides the great value for money and the amazing year round climate we have, we also respect the foreigners very much.

Some foreigners even come to Egypt to save money. The concept of going on a holiday to save money sounds strange, but when compared to living in Europe, it might almost be cheaper to come to Egypt and stay for a week than stay in Europe paying for only necessary things. I once met an Italian who told me that she has an apartment here and comes to Sharm often because in Italy she spends too much money, so she comes to Sharm on holiday to save money!

P.M Communications: Over the last 20 years you have invested a lot of time, energy and love in Sharm El Sheikh. What is the achievement that you are personally most proud of?

Mr. Aly: I am very proud to see my project growing up as the result of my work; it is like a baby to me. I am different from other investors who came just 5-6 years ago in airplanes and started their business while staying in a 5 star hotel. I slept in a tent when I first arrived here, so I really have seen this project from its infancy to its completion. Now that the first investors have done well, other investors are following our example, but we will always have the merit of being the first ones willing to risk everything for the place we love. This is why I am so proud of my projects here, because they were risky, but I believed in them from the very first day.

P.M Communications: With your entrepreneurial spirit and energy, do you have plans to develop outside of Sharm El Sheikh and if so, where?

Mr. Aly: Yes, I have my sights set on Marsa Alam. I see this destination like Sharm El Sheikh because it is a relatively virgin area still and I love seeing the potential in a place where there is nothing. When I see a beautiful location and picture a swimming pool with lots of people lying around it and kids playing in the water, I get motivated to continue developing with the same passion that I had in the beginning for Sharm El Sheikh.

Nevertheless, I would like to say that Sharm El Sheikh is one of the best destinations to invest in. I would like the British to come and see the possibilities for themselves in a land with holy roots, an unparalleled climate and unique crystal waters. Their house could be set amid beaches with some of the world's most amazing coral reefs and marine life or they could just relax under the sun that bathes Sharm El Sheikh all year round. Come to Egypt and you will see!

P.M Communications: Thank you for your comments.