The indigenous people of South Sinai, the Bedouins, generally did not benefit from employment in the initial construction boom because the wages were too low to make it worth their while. Sudanese and Egyptian workers from other areas were brought in as laborers instead. The Bedouins increasingly moved into tourist industry positions such as driving taxis, guiding sight-seeing tours on camels or in jeeps, and managing cafes or campgrounds, but the competition from foreign tour operators, Egyptians from the Nile Valley, and with each other, is fierce.

Since the mid-1980s, the Bedouins who held desirable coastal property have lost control of much of their land as it was sold by the Egyptian government to hotel operators. In the summer of 1999, the latest dispossession of land took place when the army bulldozed Bedouin-run tourist campgrounds north of Nuweiba as part of the final phase of hotel development in the sector, overseen by the Tourist Development Agency (TDA). The director of the Tourist Development Agency dismissed Bedouin rights to most of the land, saying that they had not lived on the coast before 1982. Bedouins had been living on the coast, but their traditional semi-nomadic culture has left them vulnerable to such claims. Most of the Sinai Bedouins have been in Sinai since the fourteenth to eighteenth centuries.