Trumpeting Tourism


Economic News

22 Jul 2010
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With the end of the year approaching and the chill of winter steadily setting in members of Turkey's tourism industry can gloat following months of robust growth. With the value of tourist receipts so far surpassing expectations, tourism executives anticipate an impressive year-end result. However, while there has been considerable investment in the sector, a number of structural changes will have to be implemented if Turkey is to continue breaking tourist arrival records in the years to come.

For now though attention has been fixed on the positive indicators registered thus far in 2005. The first nine months of the year saw a massive 22.71% increase in tourist arrivals compared to the same period in 2004, according to statistics from the Association of Turkish Travel Agencies (TURSAB). This came on the back of a 27.25% increase in the first nine months of 2004 compared to the same period in 2003.

"We saw 17.1m visitors flowing into Turkey in the first nine months of this year, with a 40% rise in tourists coming to Istanbul alone compared to last year," Cengiz Yucel, researcher and analyst from TURSAB recently told OBG.

Particularly notable has been the influx of Europeans. By September 2005, 3,318,331 Germans, 1,633,707 Russians, 1,497,847 English, 1,220,036 Bulgarians and 1,038,354 Dutch tourists had visited Turkey. This represents a y-o-y increase of 9.74%, 16.07%, 27.3%, 26.45% and 6.42% respectively, according to TURSAB.

Apart from the conventional attraction of sea and sun, analysts link the rise in European visits to Turkey's bid to join the EU and an associated amount of Continental curiosity.

"The fact that Turkey has appeared more and more in the Western press has very much affected tourist numbers," says Yucel. " Six years ago Turkey was only in the press due for terrorist incidents at home. Now the focus is more on the EU negotiation process."

Although constituting the bulk of tourist arrivals, Europeans have not been the only foreigners to flood the market. Turkey lost out on long-haul visitors in 2002, 2003 and the first half of 2004. But from the second half of 2004 the number of long-haul tourists started to increase, with a full rebound registered in 2005, TURSAB figures show. The first nine months of 2005 saw 334,316 tourist arrivals from the US, translating into a staggering 47.41% increase over the same period the previous year. The Japanese continued the trend, supplying 86,904 happy camera-snappers, a 92.59% increase from the first nine months of 2004, while there was a 35.16% increase in the number of Australian visitors, with 76,394 arrivals.

Turkey's neighbours have shown a similar interest, with 215,990 Syrian visitors and 749,992 Iranian tourists flowing in from next door by the end of September 2005. This represents a 45.53% and 64.42% jump in visits respectively.

The reasons for this level of growth are manifold. Diversification of tourist destinations in Turkey, concerted promotion campaigns abroad, improved training of tourism industry employees and investment in construction of tourism facilities have all been cited by the Culture and Tourism Ministry as important factors. This is in spite of the contention by some analysts that more can be done to sustain long-term growth.

Natural disasters, such as the tsunami in South-east Asia, are also likely to have figured in the equation, with tourists looking for alternative destinations as a result. Unfriendly customs officials in the West and laborious entry requirements are also seen as factors in encouraging a greater number of Muslims to travel to friendlier territory.

But there have also been very specific attractions that have helped draw in tourism revenue. Istanbul in particular has served as an important magnet for foreigners over the last year, hosting such events as the Champions League final in May and a leg of the Formula 1 Grand Prix in August.

The latter proved to be a particularly big occasion. A total of 110,000 spectators attended the opening event, of which 50,000 were foreigners. These tourists spent more than $100m in Istanbul, according to official estimates. Murat Yalcintas, chairman of the Istanbul Chamber of Commerce (ITO) also emphasised that the event had been broadcast in more than 200 countries, translating into $3.7bn worth of free promotion Turkey. Not bad for publicity.

Little surprise then that Istanbul is looking to close the gap on some of Europe's most popular cities. Turkish Tourism Minister Atilla Koc recently pointed to the fact that Paris sees 55m tourists every year, Rome 40m, Prague 17m, with Istanbul notching 3.5m annually. With new convention centres having been constructed, conferences taking place and big international events being held locally, analysts expect to see six million visitors in Istanbul next year. The city's bid to become the European Cultural Centre for 2010 will certainly enhance its chances of drawing an ambitious 20m tourist per annum by the turn of the decade.

Visitors in the meantime appear to be increasingly resilient in the face of violence.

"Tourists have seen terrorism in their own countries so confidence cannot be shaken so easily," says Yucel.

The July 2005 bombing in Cesme, which injured 21 tourists, and another in Kusadasi, which killed five people, hardly dented the inflow of sun-starved Westerners. At the time, the government reassured would-be visitors that the required security measures had been taken to avert similar incidents from reoccurring.

Nevertheless, analysts remain concerned about the distribution of investment. Many of Turkey's inland destinations suffer from ailing infrastructure. Anamur on Turkey's Mediterranean coast is a case in point.

" We are very similar to our neighbouring city of Alanya, but we can't attract as many tourists due to road access problems," according to Oren Mayor Huseyin Ulku in August.

Although the Ministry of Culture and Tourism has promised funding, the problem remains apparent enough.

Private investment could also help to address the necessary upgrading of local infrastructure. Analysts believe there has been little shift in promoting the non-coastal regions and Istanbul.

"Part of the problem derives from the fact that all regions are regarded as the same before the law as an investment destination," says Yucel. Incentives such as tax breaks for would-be investors should be implemented in underdeveloped regions to even the playing field. This would give cultural tourism a necessary spur and help Turkey in its push to diversify away from the main sun and sand-dependent tourist season - a vital formula for sustained long-term growth.

Another issue is that regional administrations still cannot generate their own funds for regional promotion. As such, promotion is still carried out centrally by the Ministry of Culture and Tourism. However, analysts believe that devolving the responsibility to the regional level could provide the necessary spur to the branding drive, with regional interests more directly at stake.

This is not to detract from the potential of tourism in the future, with bold projections made by both official and unofficial sources on tourism growth.

" Our target is to draw 30m tourists and earn TL30bn from tourism by 2010. I guess we will make a strong jump this year and reach our goal two years earlier," Atilla Koc said in July.

Still, diversification of tourism activities and destinations across Turkey will be the key to sustaining long-term growth - a fact that the ministry is certainly aware of. Whether the steps that have been taken and those that remain to be taken are big enough will be judged in the years to come.

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