Prime Tourist Destination

Turkey

Economic News

22 Jul 2010
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Turkey's position on the edge of the eurozone is paying dividends for the country's tourism industry. With the Euro continuing to rise and fuel prices pushing up the cost of long haul flights, Turkey stands to gain as a mid-haul destination for British, Russian and Commonwealth of Independent States (CIS) tourists.



Data from the Turkish tourism ministry showed that 3.31m total tourists visited Turkey in June, a 19% increase on the previous year's figure. One of the most striking aspects of the data was the growing appeal of Turkey among British visitors.



The weakness of the British pound compared to the Euro has left many British tourists, already affected by the credit crunch on consumer spending power, looking for cheaper destinations. Figures from the Association of British Travel Agents (ABTA) show a 20% year-on-year increase in reservations for holidays in Turkey, making it the second fastest growing destination for Britons after Egypt (where reservations grew 28%).



Mark Tanzer, CEO of ABTA, told British press on July 20, "With a changing economic climate, many existing trends have become more pronounced. Spain for example, is still the top destination this year, but as a mature destination, and with the strong euro, greater growth is being experienced in the mid-to long-haul destinations outside of the eurozone."



There were fears among some travel agents that the UEFA European Football Championship, which took place in June, would attract tourists to Austria and Switzerland at the expense of Turkey. But these fears failed to materialise. It is likely that England's failure to qualify for the championship has assisted the high British tourist figures.



The first quarter growth in tourism arrivals bodes well for a country that is chasing ambitious goals in terms of total visits and tourism receipts. The Turkish Tourism Authority aims to attract 25m visitors and $21-22bn in receipts in 2008. In the long run, the goal is to attract 50m tourists and $50bn in receipts by 2023.



In 2007 Turkey attracted 23m tourists, making it the ninth most visited country in the world. British tourists rank third behind Germans and Russians in terms of visitor numbers to Turkey.



"We expect to see German visits to Turkey to continue to grow at a rate of between 8 to 10% in the coming year" Koray Yetik, secretary general of the Turkish Tourism Investors Association (TYD), told OBG. "The Russian, Ukrainian and Kazakhstan markets, on the other hand, are growing at double-digit rates. Last year 3m Russians received their first passport and the majority went to Turkey," he added.



To meet the increasing demand, local and international hoteliers are working hard to build capacity in the popular tourism hotspots of Istanbul and the 'golden corner', the coast between Izmir on the Aegean Sea and Antalya on the Mediterranean Sea. In June Anatalya was the chosen destination for 39% of tourists while Istanbul accounted for 20%. W Hotel opened in the neighbourhood of Besiktas in May and five star hotels including Park Hayatt Istanbul, Marmara Sisli, Divan Istanbul Asia and the Poseidon Underwater Hotel are slated for construction before the end of 2010, when Istanbul will be the European Capital of Culture.



Despite the numerous steps in the right direction, Yetik says Turkey still lacks recognition as a foreign investment destination in the tourism sector. "Of the total $34bn invested in Turkish tourism, only $3bn came from foreigners. In addition, only around 10-11% of import goods go towards tourism investments" he told OBG.



Besides, according to Yetik, the tourism sector faces a potential shortage of human resources. "Currently around 5% of the Turkish workforce, 1.2m people, are employed in the tourism sector. This number will increase to 2m by 2013. Each year approximately half of the students graduated from the country's hotels schools accept jobs in the tourism industry mainly because of the salaries and fringe benefits do not match their expectations," he said.



Russian speakers are particularly in demand but there are few options for Turkish students to study the language. The majority of the estimated 50,000 foreigners working in Turkey are Russians. "The need for improving skills in the tourism sector and the upgrading of the infrastructure are key challenges in the coming years," said Ozbey.



With 258 Blue Flag beaches - the third highest number for any country worldwide - there is good reason for Turkey to focus on the 'sea, sun and sand' market. But if the country is to reach its ambitious visitor goals and avoid turning the coast into overdeveloped concrete sprawls often associated with parts of Spain's Costa Del Sol, new destinations and niches need to be developed.



The Tourism Strategy to 2023, with its emphasis on areas of cultural, health and MICE tourism, has laid out the blueprint for the country's future development. However, so far, progress has been slow, not least because such ventures are currently far less profitable than those in the 'golden corner' and Istanbul. "There are fantastic landscapes and cultural sites in Anatolia but investors won't enter the region unless a generous programme of subsidies and incentives is offered by the government," said Yetik.

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