Al-Ahram Weekly Online   2 - 8 August 2012
Issue No. 1109
Published in Cairo by AL-AHRAM established in 1875

Business in paradise

As tourism falters, the mood can turn gloomy at Sinai's favourite haunts. Victoria Harper, however, discovers that some businesspeople are energised by the downturn

Click to view caption
A spectacular view of DahabOCOs beachfront known as Al-Masbat;
Bazaar worker Tarek says he is taking it one day at a time.

Sitting on the porch of her beachfront restaurant, Miriam watches her daughters mock-sell trinkets to Bedouin children on the boardwalk, a role reversal they really enjoy. Two years ago, Miriam and her husband Stephan took over Jay's, a Rastafarian-themed restaurant in the popular Lighthouse area of Dahab. They invested their savings in what they hoped would be a thriving business. But for now, times are so desperate that Stephan has taken a job back home in Switzerland to keep the restaurant afloat.

"I like it here and will do anything to make it work," declares Miriam. "I'm only leaving if soldiers show up at my door with guns."

A year and a half after the revolution, tourism in Egypt still suffers, and many investors are confronted with problems similar to those of Miriam and Stephan. As images of continued protests and occasional violent clashes flash across television screens around the world, holiday goers have drifted to other destinations. The swearing in of the first elected president, it is hoped, may change the situation. But then again, it's hard to tell.

According to official statistics tourism is down by around 35 per cent. But in areas heavily dependent on non-Arab tourism, the drop may have been greater. In Sinai's Dahab, a popular Bedouin fishing village turned divers' Mecca, shop owners say that business is down by more than a half since January 2010.

Tarek, who works at the Nubian House spice bazaar on the promenade, observes that business has been touch-and-go for six years; first it was the bombing in the marketplace in 2006, then the global economic crisis in 2008. Dahab rebounded both times, but now, with regular news of political instability, things are harder.

Not far from Tarek, a young Bedouin woman in full chador arranges her collection of handmade purses and shawls on the pavement. It's 4:30pm, the sun has tilted just enough to give her a bit of shade, and she wants to be ready when tourists go for their walks at sunset. Khadija (she asked that her real name not be published) is originally from El-Arish, but now lives in Assala, the picturesque northern part of Dahab.

Sitting beside her colourful assortment of handbags, sashes and wall hangings embroidered by the women of her tribe, Khadija shrugs off questions about hard times. She has been working here for two years and she says that she is getting by. Sometimes, she admits, her Islamic attire puts off the customers.

"Some foreigners are afraid of me because I wear a veil," she says perplexed. "I don't understand why, but they act nervous and back away from me."

When I ask her about whether she expects business to pick up now that Mohamed Morsi is president, she voiced what could be taken as a wait-and-see stance: "I don't think it matters much who is president; all I want is enough security so I can go on working."

But not everyone is as nonchalant about the new president as Khadija. European tourists and business people watching the situation appear less critical of the Islamists than some liberal Egyptians. Some point out that if the Islamists begin to change the way things are, foreigners too will change their patterns of travel and investment.

Shadi, a successful Red Sea interior designer, predicted that the mere presence of Islamists is deterrent enough. "The sight of Egyptians wearing Islamic clothing on the beaches is going to discourage foreign tourists accustomed to bikinis and beer," he suggested. "I've already seen it happening in Hurghada."

But Beatta, a Polish woman on her third visit to Egypt, is not so worried. "I know there was a revolution and I heard that there is now an Islamist president, but I don't pay much attention to all that. Unless the government closes the country to tourism, I will keep coming."

For the locals, anything that discourages tourism is serious. Most Egyptians working in Dahab come from other parts of the country. Some have already shuttered their shops or left to find work back in Cairo or other cities. Tarek is originally from Giza and may soon be forced to look for work back home. About 10 per cent of the shops in the souk (market) closed last year, he says, and if things get any worse he too will have to leave. "Right now, I'm taking it one day at a time, one step at a time."

The mood of pessimism doesn't run deep, however. In Tarek's bazaar and nearby shops business may be down by 50 per cent or more, but driving around town one can spot new buildings popping up everywhere. People are renovating their hotels, redecorating shops, adding stone cladding to facades. Businesses are upgrading.

Why invest in the middle of a downturn? The answer is because this is often the best time to find good deals and free time to act on them. When labour is cheap, government building regulations are more lenient and land prices are somewhat lower, so a shrewd investor may decide that it's worth taking a risk.

Ahmed, owner of Safari One Rental and Trekking, is starting work on his own backpackers' hotel. After living in Dahab for nearly 10 years, he is convinced that low-budget accommodation is an unexploited niche in the tourism market. Over the past decade or two, Dahab has been shedding its reputation as a low-rent destination for hippie, and aspiring -- prudently or otherwise -- to a classier form of hospitality. Ahmed says this is asinine.

Egypt is not the only country caught in a downturn, he explains. The whole world is short of money, and tourists want to have fun on the cheap. "Everyone in Dahab is building high-end luxury accommodations. They want to turn Dahab into another Sharm El-Sheikh, but tourists are getting more budget conscious and we've lost the backpackers to Jordan and Southeast Asia," he explains.

Instead of young people going to other countries because they can't afford the $15 a night the cheapest hotels charge, Ahmed's dream is to let rooms for as little as $1 a night. "If I offer rooms for a dollar, my regulars will start to bring their friends. Some of those will take the better rooms; others will join my treks. In the end, they'll have fun and I'll have my business," he says with a smile.

So far, Ahmed has survived the downturn relatively unscathed but others were not as lucky. Those businesses that opened up just before the revolution did not have time to recoup their initial investment, and their situation is becoming more vulnerable by the day. In July 2010, Alex, a former medical doctor who moved to Dahab from Moscow, built Red Cat, a top-notch Russian eatery. He and his business partner Marianna could easily have packed up and left when the revolution started just six months later and business dried up. Their savings began to evaporate, but they stayed on.

Call it madness, foolhardiness, or a stroke of genius, but when business comes back, Alex and Marianna will already have the best known Russian restaurant in town.

For years, the biggest fans of Dahab were Italians and Germans, but recently a surge in Russian tourists has changed the face of Sinai, and its language. Hotels, short-lease apartments, supermarkets, and pharmacies, have now put up signs in Cyrillic. "Egypt is number one destination for Russians," Alex says. The reason, he explains, is that the flight from Moscow is only four-hours long and Russians -- unlike other Europeans -- are rather indifferent to political unrest.

So why not Turkey? He says it's because Turkey is colder, and more expensive. "In Moscow, the sun may come out for 30 days in a whole year, so imagine being here where the sun is year-round," Alex says before disappearing into the kitchen to prepare watermelon lemonade for the next table.

Some nights, Red Cat is almost full, but these are the good nights. On others, two or three tables at most are all he can hope for. Still he wouldn't leave. Balancing against the elegant railing he built himself for the restaurant, gazing out over the sea and onto the mountains beyond, a smile forms on Alex's lean face.

"How can I go back to an office job when I am surrounded by so much beauty?" he asks.

So what did he do during the revolution? Alex recalls he spent much of the downturn perfecting his chocolate cake with orange coulis. A worthy endeavour, I thought to myself later as I sat at a waterfront table to enjoy this ultimate delicacy.

In spite of the Russian influx, Germans are still visible in Dahab. And so is their cuisine, or at least their bread and desserts. Ralph, the owner of the eponymous German bakery, wakes up at three in the morning to provide the town with breads and pastries so delicious that we bring them back as gifts to friends in Cairo.

One of Ralph's faithful customers is Emily who has leased a charming 9-room hotel on the northern beach of Dahab, known as the Eel Garden. Sitting on the beach in front of her blue and white restaurant, a cup of coffee in hand, I almost mistook her for a tourist. Then she jumped up to greet a customer and ran to the kitchen to prepare the order. Slim, blonde, and beautiful, Emily was an HR manager in Berlin before she moved to Dahab five months ago.

Now here is the puzzler: While people like Miriam and Alex started businesses just before the revolution and stayed on out of a mix of tenacity and hope, Emily knew exactly what was going on. She moved to a new country, started a career she knew nothing about, and invested part of her savings just to be here. Lifestyle over business savvy? Perhaps. But for now, she seems hopeful that her business will pick up, or at least break even.

"Two years ago, I quit my job in Berlin and started a free-lance training business. It was starting to take off when I came here on holiday and fell in love with the place," Emily says. "I couldn't resist the temptation; the chance to live in paradise."

For now, Emily is not making even a fraction of the money she could have been making running her own training firm in Berlin, but like Alex -- who would make over six figures a year if he goes back to Moscow -- she likes the idea of having a business in paradise. "I'm just breaking even and hopefully things will pick up, but I'm not here for the money, I'm here for the experience. And I wouldn't trade it for anything," asserts Emily as she places a frothy cappuccino in front of me.

It is not only the starry-eyed foreigners who are sticking to their guns in Dahab. In fact, experienced local tourism operators are betting that this downturn is the best time to prepare for what hopefully will be the upcoming boom. Twenty years ago, Ehab started off in Sinai as a desert safari guide. Today, he and his Irish-born wife Emma run the EMBAH Tour and Travel and one of Dahab's most popular mid-range hotels, Coral Coast. EMBAH works with major European tour operators, so business has always been good.

Things slowed down after the revolution, however, and now the hotel is down to about 25 per cent occupancy. "When business was booming, I saved some money," Ehab explains as we tour his new offices currently under construction in Mashraba, the southern part of Dahab. "When business slowed down we knew it was time to build. You have to have faith to make things happen," Ehab says.

Building the new offices may prove to be a great business idea in the long run, but in the short run it has definitely been of immense value to Ehab's employees who instead of sitting idle at the hotel started helping with the building efforts. Not one to be concerned about the future, Ehab believes that business is like the sea; it comes in waves. If there is a downturn, it must also be the beginning of better things.

As for his positive attitude, he attributes that to his years as a desert safari guide: "It's the wilderness of the desert," Ehab muses. "It makes your heart strong."

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