International hotels group Le Meridien has called for an end to the price war in Egypt and emphasised the need for an open skies policy after becoming the first major hotel chain to pull out of the Red Sea resort of Sharm El Sheikh in March.

The group's senior vice president for sales and marketing, Russel Sharpe, also called for tighter regulation of the industry in Egypt, adding a major readjustment in thinking was necessary before the Red Sea resort can justify its ambition to become a global 'hot spot'.

He said the raw product with its acres of deserted beach, mild winters and unspoilt dive sites was undeniably attractive, to both tourism chiefs and sun-starved holidaymakers from northern climes.

But a solution of flooding virgin sites with mile after mile of hotel rooms - without attention to the requisite infrastructure needed to support an influx of visitors - had created a situation where hoteliers saw rates for what was a superior tourism product drop through the floor, he said.

Sharpe said the writing was on the wall for Egypt tourism even before September 11 which led to a 15 per cent plunge in traffic in 2001 over the previous year.

"The situation was bad enough in Hurghada, but even with this example and a superior product, the situation in Sharm-El-Sheikh has deteriorated to the extent that what was once a $150 a night market has flopped to a $17 nightmare," claimed Sharpe.

He called for a reappraisal of government policies and marketing strategy to prevent the implosion of Red Sea tourism.