Entrepreneurs with a dream to modernize the booking process for vacation rentals are working to maximize the potential of real estate wealth at premier holiday destinations, primarily the North Coast. Invest-Gate speaks to the founders of Agaztak and Elsa7el.com, highlighting how such tools are altering the opportunities for vacation homeowners and rental consumers alike.
One of the first apps launched with this vision is Agaztak; Founder and CEO Hisham Refaat says that the idea dawned upon him during his vacation with friends in the government-owned Marina El-Alamein resort in the summer of 2012, as they mused about how so much “beauty and real estate wealth…could be so underutilized.” Hence, he tells Invest-Gate that he came up with the idea of creating a real estate portal easing the booking process for local consumers and turning the North Coast into an international tourist destination.
“I think, in terms of potential, this is a great destination, with its white sandy beaches given the limestone geology of the area and the turquoise seawaters as opposed to the darker shores on the European shoreline,” Refaat notes.
Another reason for the appeal of the North Coast, he mentions, is that the water is at internationally-acceptable swimmable temperatures (20°C) for eight months in the year, as opposed to five months on the other side of the coastline. The opportunities for launching a rentals portal are further magnified by the fact that the number of privately-owned rooms in the North Coast exceeds the number of hotel rooms available nationwide.
Founder of short-term vacation rentals platform Elsa7el.com, Karim Megahed, came up with the idea of the portal after a booking experience with his family in a North Coast resort went awry. He identified a gap in the market, as the likes of Airbnb.com and booking.com do not offer private listings, and made use of the massive supply and demand for rentals on the Mediterranean coastline.
“We capitalized on the North Coast because it has the most market participants,” he says, noting that several locations across Egypt with a wealth of privately-owned properties are home to limited hotel rooms.
Megahed plans to expand Elsa7el.com nationwide, regionally, and eventually, globally, under a different brand name. The expansion to Al-Sokhna will take place by October, followed by an expansion outside Egypt by next year. Like Refaat, Megahed’s vision is to heighten international tourist inflows to the North Coast; “I have been to the other side of the coastline, I have visited Spain and Italy, but honestly, our side of the beach is so much more beautiful,” the Elsa7el.com founder noted.
Megahed adds that the three consumer airports on the coastline running from Marsa Matrouh to Borg El Arab allow for further partnerships with low-cost airlines, particularly when ride-hailing apps such as Uber and Careem are making transportation on the coastline easier than before. As the purchasing power of foreigners heightens in Egypt with the declining value of the local currency, all that remains to achieve the vision of expanding the clientele pool beyond the local one is to adequately market the coastline abroad. “I have never seen the Tourism Development Authority marketing the North Coast aboard. Instead, we focus more on marketing the Red Sea, Aswan, and Luxor. Tourists are not highly interested in resorts; they prefer the feel of a town…The North Coast, today, is not the way it used to be, there are restaurants and nightlife…it is ready to attract international tourist inflows,” Megahed argues.
Elsa7el.com is unique in offering selective, high-end listings and customer support, according to Megahed. The Elsa7el.com founder says that his team focuses on accuracy and often offers a payment-on-delivery service, in addition to their usual online payment service, due to the low credit card penetration rates in Egypt.
“Our biggest challenge is the local culture and the fear of online payment. We are in 2017; we need to overcome this fear in order for our economy to boom and for us to use the Internet to our benefit,” he tells Invest-Gate.
Agaztak’s service includes a ground team offering check-in and checkout services, as well as housekeeping, catering to the same high-end clientele that elsa7el.com targets.
The Egyptian tourism industry has been suffering from low inflows since the uprising back in 2011 and particularly after a Russian passenger jet crashed in the Sinai in October 2015.
Several small-scale terrorist attacks have also taken place since then, including an attack that killed two German tourists in the Red Sea resort town of Hurghada last month.
Refaat notes that the security concerns over Egypt are one of the primary challenges his business faces. “We also need help from the government, developers, and homeowners. We need the North Coast to be included in the Tourism Development Authority’s marketing campaigns… We need access to government-owned resorts such as the Marina. Also, we urge homeowners and developers to help us with modernizing units that fit international standards,” he suggests.
As occupancy rates fall in the Sinai and Red Sea governorates and primary international tourist attractions such as Sharm El Sheikh and Hurghada, promoting the North Coast in international markets takes a backseat.
The outlook for maximizing international tourist inflows to the resorts lining the North Coast may seem slim under the current security situation in Egypt. However, initiatives easing the process of booking private property develop the opportunities for vacation homeowners, local tourists, and eventually foreign tourists.