Economic Update

Published 22 Jul 2010

With the classic combination of sun, sea and sand drawing the large majority of foreign tourists into Turkey over the summer months, members of the industry have been looking to diversify away from their dependency on the coastline. Little surprise that the Ministry of Culture and Tourism has been pushing Turkey’s geothermal credentials forward in 2006, with the intent to better capitalise on the country’s potential as a destination for those with health problems or in need of some spa-side pampering.

Investments have already been made to this end. In January this year a joint French/Turkish venture announced a $45m development in the western province of Denizli, with a completion date in 2013. As many as 1500 Europeans are projected to flock through the doors of the new spa on a daily basis once the project is up and running.

Like the spa resort towns of Pamukkale, Denizli and Cesme, all close to Turkey’s Aegean seaboard, the country’s third-largest city Izmir is working hard to become internationally renown for health and spa tourism. Izmir’s Balcova district is a particularly popular resort, hosting approximately 10,000 foreign visitors annually. Located on the site of a spring known as the Baths of Agamemnon, the healing waters at Balcova have been drawing visitors from the region and beyond since ancient times

The construction of 10 geothermal hotels in Cesme and in Fethiye in the south and Afyonkarahisar, Nigde and Nevsehir in Central Anatolia also testify to the potential offered by the country’s bubbling springs, and to the incentives being offered by the state to boost tourism, now Turkey’s biggest single foreign currency earner.

To further boost investment and promotion, the Ministry of Culture and Tourism has identified four key regions as offering the greatest geothermal potential. The southern Aegean, the province of Antalya on the southern Mediterranean coast, the southern Marmara region close to Istanbul, and Central Anatolia will receive particular attention in the years to come, with regional administrations understandably keen to hook up with the private sector in maximising tourist receipts.

Despite this, representatives of the tourism industry point to how much of Turkey’s geothermal potential remains untapped. Even though the country has the seventh-largest geothermal capacity in the world, it ranks only third in Europe in terms of availability of hot spring resorts. While Turkey has more geothermal resources than any other European state, at present only 600 out of 1300 springs are being utilised. Currently, just one percent of Turkey’s total hotel occupancy derives from thermal holidaymaking.

This is not to say the number of tourists flown into Turkey for health reasons isn’t on the rise. Last year, almost 165,000 foreign tourists, out of total arrivals of just over 20m, entered the country to take advantage of Turkey’s treatment centres, according to data from the State Institute of Statistics (DIE). This represented a 23.7% increase on 2004. By comparison, only 46,000 foreign tourists listed seeking a treatment at a spa as the reason for their visit in 1998. Insiders now believe that the number of tourists visiting for a course of therapy will reach somewhere between 1.7% and 2% of total tourist arrivals over the next decade, a significant jump considering that the figure stands at a mere 0.8% today.

An expansion of the market should be possible assuming that the government pushes ahead in improving the local infrastructure for health tourism. An estimated 50,000 beds are expected to be available in Turkey’s geothermal hotels within two years, compared with the 15,000 currently on offer. Nevertheless, the Ministry of Culture and Tourism continues to market geothermal tourism as part of a more general tourist promotion campaign – a focus that has drawn some criticism from members of the industry. To maximise the number of heath tourists entering Turkey, governing authorities should engage in a specialised and targeted promotion campaign, industrial insiders say. Easier said then done though, considering the budgetary constraints that the ministry continues to face.

Whilst the apparent interest of Western tourists in thermal springs has, to no small degree, triggered a spike in geothermal-related ventures between the private sector and local municipalities in Turkey, observers would do well to remember the strength of domestic demand. Foreigners occupy 10% of local beds, with 90% taken up by Turks on weekend trips. However, with new and upgraded facilities the balance could shift, further boosting Turkey’s already impressive tourism earnings. As is so often the motto in tourism, what is good for you could well be good for us.