This presentation consists of three parts : Part I is an overview of the Ministry of Tourism perception regarding the importance of enhancing Eco-tourism in Egypt . PartII highlights the concept of Eco-tourism and its salient features, and examine its viability within the Egyptian context. PartIII deals with some financial aspects of ecolodge, being an integral part of Eco-tourism. Part I Tourism Development and Environment To ensure sustainable tourism development The magic word is Sustainability Tourism has no limit for growth provided that development is in harmony with the environment. Tourism Development Plan
 

Sustainable tourism depends on :
-  Meeting the needs of the host population in terms of improved standards of living in the short and long run 
-  Satisfying the demands of increasing tourist numbers and continuing tourist attraction .
-  Safeguarding the environment to achieve the two foregoing aims .

The environment constitutes an integral part of tourism’s resources

The focal point is to shift emphasis :
From : Exploiting comparative advantage based on factor endowments

To    :  Developing competitive advantage by ensuring rational management of the physical environment and cultural

The Challenge
*  How to develop tourism capacity and the quality of its products without adversely affecting the physical and human environment that sustains and nurtures them ?

More Specifically  
 * How to avoid or lessen - in an effective and operational manner - the negative environmental impacts that may be associated with uncontrolled mass tourism ?

And
*  How to stimulate new forms of tourism that are amicable to the environment?
Policy  Measures for Conservation of the Environmental Heritage

General :
* Raising public awareness of  environmental issues; 
*   Integrating tourism and environmental studies into the educational system;
*  Strengthening co-operation and co-ordination among institutions involved 
     in infrastructure and environmental planning, and tourism development 

Specific :
* Establishing  and protecting  national parks and  areas of outstanding natural beauty against uncontrolled  
   tourism development
*  Re-habilitating  existing  historical buildings and sites
*  Maintaining tourism product diversity  
   (more emphasis on green tourism)
*  Improving measurements of environ-mental factors and  application of economic appraisal techniques 
    for  the assessment, monitoring and evaluation of environmental implications of tourism development.
*  Providing environmental profiles and manuals of guidance for developers    (e.g., Best Practices)
*   Introducing Planning Controls and Regulations, such as :
-  regional zoning of tourism facilities 
-  building restrictions in designated areas
-  preservation of open spaces along beach   fronts
-  setting up architectural and landscaping design standards
- low-rise developments for tourist facilities  in areas of natural beauty or historical value
-  protection of certain species of plant and animal life
-  prohibition of motor vehicles in protected   beaches or speed restrictions
- setting up proper mechanism for  installation , management and operation of water supply, sewage, solid 
   waste disposal in coastal regions (the concept of  Integrated Tourist Centers)
- energy conservation / use of clean energy;
-  preparation of Environmental Impact Analysis    Study  prior to project approval; 
-  assessment of carrying capacity of tourist locations ( physical, psychological, and ecological ) i.e., the optimum level of facility development and visitor use that will avoid environmental degradation and maintain the balance of nature
*  Providing  incentives to green tourism developers and  to specified areas 
*  Intensifying promotion and marketing campaigns relating to natural travel or eco-tourism

Definition
* Purposeful travel to natural areas to understand the cultural and natural history of the environment, taking care not to alter the integrity of the ecosystem, while producing economic opportunities that make the conservation of natural resources financially beneficial to local citizens (Ecotourism Society. 1992)

Examples of Activities
* Safari trips.
* Bird watching.
* Diving, snorkeling.
* Mountain trekking, hiking .

Eco-Tourism Merits
* Provides visitor services that enhance local heritage and environmental resources .
* Preserves and protects the quality of local resources .
* Improves the quality of life of the local community .

Eco-Tourism Salient Features
* More cosy and less costly 
* Support small-scale local level accommodation (ecolodge ) in contrast to mega-resorts 
* Maintains close contact with local culture and life style

* Involves low carrying capacity and minimum density
Volume :       - No. of visitors, nights, . . .
Density :        - No. of visitors per acre of beaches 
                     - No. of visitors per m2  of restaurants shop space
Market Mix : - No. of visitors / resident population 
                     - Visitors use of public facilities /  resident use

Egypt has abundant variety of physical attractions of natural qualities ( deserts, oases, mountains, coasts... ) .

Positioning :
Select Market Segments, focus on nature – oriented visitors willing to integrate and accept local customs and life – style
Adopt a Niche Market Strategy based on accuracy and real market image

Partnership :
Need for integrated marketing efforts ( public & private ) to ensure effective promotion, proper access to advertising outlets, reservation facilities and adequate transport services

Programming : 
Emphasize special events, seasonal activities, festivals as further attractions to particular destinations 

Packaging : 
Provide Packages, including transportation facilities and services for a single price 

People : 
Emphasize do –it- yourself concept
Provide training for eco-tourism personnel (e.g. local guide)
Seek local community support and encourage local participation

Following and in the light of the findings of market and technical studies :
Conduct  financial analysis of “ecolodge” projects

Steps to be followed :

Estimate “ecolodge” investment costs, by main components (cost of facilities, development and pre-opening expenses, net working capital) over the time span of facility construction

Identify sources of funding; determine financial structure and burden, debt-equity ratio; and compute project’s cost of capital

Estimate current costs by key operating factors and derive cost parameters per room or bed or visitor Project annual revenues; prepare income statement; and conduct cash-flow analysis

Project return on capital invested, applying profitability indicators (e.g. NPV, NPVR, IRR, PI, PP, …. ) Apply financial risk analysis ( break-even, sensitivity, probability distribution ... ) 

Second :
How effective are these financial incentives in reducing capital costs, operating costs; and in securing proper investment climate for eco-tourism ?

Third :
To what extent are banking institutions willing to co-finance ecolodge projects and on what terms and conditions ( soft  versus commercial loans, collateral,… ) ?

Fourth :
What financial packages/incentives could be recommended to foster eco-tourism development in the future?

Fifth :
What lessons can be drawn from other countries’ experiences in securing financial assistance to eco-tourism projects ?