The government announced earlier this week that it is working on finalising a promotional plan for investment in Galala City on Egypt’s Red Sea coast that will help to put it on the investment map and spotlight potential projects on overseas promotional trips in the Gulf and East Asia.
There will also be an international conference to showcase those opportunities, said a statement by the General Authority for Investments and Free Zones (GAFI).
The projects included in the plan include a yacht marina, a coastal hotel, a water park, a hospital, and an upscale residential district.
The news came just a few weeks after the launch of Marassi Red Sea, a partnership between the UAE’s Emaar and Saudi Arabia’s City Stars Group, with long-term investments in a project that stretches over more than 2,000 feddans in the Soma Bay area, 30 minutes from the Hurghada International Airport.
With investments valued at $18 billion, this is one of the largest real-estate and tourism agreements signed recently in Egypt.
The interest in the area has raised questions about investing in Red Sea projects at a time when there is also growing interest in the North Coast, both from Egyptian and foreign investors.
Emad Al-Saai, a logistics expert, noted that there is a growing appetite among Gulf sovereign wealth funds for real estate investment in Egypt and not only on the Red Sea. The investments are focused primarily on tourism and leisure properties, he said, and are driven by two main factors: hedging fluctuations in dollar and gold prices and the search for stable, long-term returns.
Recent tourism projects involving Gulf investors in Egypt have been structured as partnerships with local counterparts, Al-Saai said. He explained that this approach allows investors to avoid the burdens of management and operations during project implementation.
Under these arrangements, the Egyptian partner is responsible for securing approvals, obtaining building permits, and providing construction materials and finishing supplies, as well as obtaining operational licences.
Partnership arrangements avoid the large upfront financing required to acquire extensive plots of land, while distributing implementation across stages and paying most of the value over several years, Al-Saai said. In return, Egypt receives a share of future revenues, ensuring greater financial stability and more sustainable management and operations.
This new partnership model guarantees stable, long-term returns for sovereign funds, regardless of fluctuations in the dollar and gold markets. For example, Qatar’s latest deal on the North Coast, valued at around $28 billion, is expected to generate annual returns of $3 to $4 billion with close to zero risks.
Al-Saai considers the Gulf’s pursuit of real estate partnerships in Egypt, ongoing for at least 30 years, as an indicator of confidence in Egypt’s long-term stability and growth.
He said there could be possible competition between tourism projects on Egypt’s Red Sea shore and those on the eastern side of the Red Sea. But he noted that the eastern coast of the Red Sea is mainly mountainous, leaving little hinterland to accommodate large-scale tourism developments.
If large tourism projects on the eastern shore were truly sustainable, they would have attracted more investment from Gulf sovereign wealth funds, he said.
Coastal and cultural tourism is not the main investment focus of Saudi Arabia, he said, given its historical association with religious tourism.
Saudi Arabia has recently announced plans to implement several large-scale tourism projects along its Red Sea coast as part of its Vision 2030 strategy. Among these is the Red Sea Project, part of a broader Red Sea Tourism Strategy led by the Saudi Public Investment Fund under the banner of Red Sea Global.
The project spans 28 square km on the kingdom’s western coast and includes 90 natural islands.
Abbas Al-Zaafarani, former dean of the Faculty of Urban Planning in Cairo, said that the “tourism investment that Saudi Arabia seeks to promote along the Red Sea coast or in northern regions, as outlined in Vision 2030, reflects a broader strategic trend among Gulf states that rely on tourism as a key development sector.”
But he said that tourism could be a fragile sector requiring many years of promotion and infrastructure development to attract international visitors and that it was liable to security incidents, border conflicts, or natural disasters.
Such disruptions could halt tourism activity abruptly, affecting related businesses from airlines and hospitality to restaurants, bazaars, and employment opportunities, he said. For this reason, relying on tourism as a long-term development driver must be approached cautiously and be based on careful assessments of risk, Al-Zaafarani noted.
In 2024, 15.78 million tourists visited Egypt, a record figure. Egypt also recorded growth in tourism revenues, reaching $15.3 billion in 2024, an increase of nine per cent compared with 2023.
Saudi Arabia was visited by 116 million tourists in 2024, up six per cent from 2023. The figure includes 86.2 million domestic tourists and 29.7 million foreigners.
Dubai received 18.72 million foreign tourists in 2024, while hotel occupancy across the UAE reached 24.9 million guests during the first 10 months of the year.
Bassem Fahmi, a UN development planning advisor, said that based on these figures, there are additional motives for investing in Egyptian tourism on the Red Sea, particularly by foreign investors.
He pointed to a global trend towards tourist developments, especially luxury tourism and eco-tourism that preserve the distinctive natural environment, culture, and heritage of each region.
He added that transforming an area into a world-class tourist destination is a long-term process, during which diverse experiences are built with travel agents, traditional tourists, and adventure seekers. It is the accumulation of these experiences that establishes the reputation needed to present a region or project as a global tourism hub, he stated.
Regarding the competitiveness of the Red Sea, Fahmi noted that Saudi Arabia possesses unique advantages in terms of location, environment, coral reefs, rare marine life, and islands, enabling it to develop a distinctive and high-value tourism sector in the long term.
However, he said that it is not in direct competition with the corresponding coastline in Egypt, which has different but equally valuable features.
This, he argued, calls for integration rather than competition, as both sides have the potential to transform the Red Sea into a shared safari region offering tourism experiences difficult to replicate anywhere else in the world.
Fahmi added that advanced flying boats now make it feasible to connect Egyptian and Saudi islands, allowing them to be incorporated into a unified tourism programme. The Egyptian tourism sector predates the Saudi sector and those of other Red Sea countries, providing a wealth of experience and expertise that can be shared effectively through joint strategic planning, he said.
Coordination between both sides for Red Sea tourism projects would be the optimal approach, he added, maximising the use of resources and knowledge to achieve regional integration and mutual benefits.
* A version of this article appears in print in the 4 December, 2025 edition of Al-Ahram Weekly
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