This research aims to identify the challenges facing hotels and travel agencies in Marsa Alam as a remote destination. The field study was conducted using a qualitative in-depth face to face interview method with a random sample of different hotel departments' managers and travel agents. The study is based on the descriptive approach in literature review, the analytical approach in the field study and the explanatory approach in interpreting and analyzing preliminary data. The results showed that hotel sector in Marsa Alam suffers from many challenges with a total of 13 challenges and travel agencies also suffer from 5 challenges due to low interest in tourism development, sustainability, competitiveness and management of this remote destination. The study recommends to facilitate and promote tourist investment in Marsa Alam to establish recreational projects; to construct another airport and seaport; renew roads; establish an effective management board for Marsa Alam destination; encourage cooperation between public and private sectors to establish infrastructure and superstructure and implement the principles of competitiveness and sustainability.