Special report: Turkey: Tourism's faltering success

IT IS surprising that Turkey's tourism industry took so long to develop, considering the resources the country has to offer.

Its chief asset is its long coast line along the Aegean and Mediterranean seas, but Turkey also has a vast wealth and range of cultural monuments, including the mosques and Byzantine churches of Istanbul, and the ruins of ancient Ephesus, and dramatic landscapes like the chimney rock formations of Cappadocia. Mountain terrains are proving ideal for trekking and ski resorts have been developed.

The country's tourist industry is starting to promote faith tourism to its many Muslim and Christian pilgrimage sites and it has the natural resources to cater for specialist interests, like bird-watching and caving.

But Turkish tourism did not seriously develop its potential until the mid-Eighties. The country's relative poverty meant it could offer value for money. The Government offered incentives to investors in order to develop infrastructure. The industry boomed. Now, says the Ministry of Tourism, it is the fastest growing sector of the economy and the fastest developing source of employment.

In 1980, 1.3 million tourists arrived and the country realised only $326m in receipts, according to Tursab, the local association of tour operators. In 1997, there were 9.7 million visitors, and $7bn of receipts.

Receipts have grown by over 18 per cent for the last two years, but so far this year they are down. Tursab blames declining incomes in EU countries and increased competition from other Mediterranean destinations. Devaluation of the Greek drachma and reduction of VAT in Spain have made holidays in those countries cheaper.

The Ministry agrees with the analysis and blames the football World Cup as well. But Tursab says the government has not done enough to help tourism. "They don't agree that tourism is a major sector of the economy," says Erol Karabulut, Research and Development Director at Tursab. "We contribute $8bn to total exports of $25bn but the government doesn't give us any special attention. But this year is the breaking point. Now the market's been declining, they want to help."

But Mustafa Siyahhan, Assistant General Director of the Ministry disagrees. "I would say the government has provided considerable assistance. Most of the bed capacity was created with assistance from the government. But I would agree we need to help more with marketing."

The Ministry says this year it will have run advertising campaigns through the media of 43 countries by the end of June. The government is also investing in its transport infrastructure, with new international terminals opening at Antalya and Istanbul airports.

The types of incentive currently on offer investors in tourism include long-term grants of government-owned land at lower rents, tax exemptions, import rights, the right to employ foreign staff, and low utility rates. But incentives are no longer on offer for the Aegean and Mediterranean coasts. The Ministry is worried that over- development is destroying Turkey's tourist assets.

Overdevelopment has also left the Mediterranean with too many hotels. The Ministry and tour operators are working together to entice visitors to new destinations, like the relatively under developed Black Sea coast and south-east Anatolia.

The South-East offers a number of cultural and religious monuments, but its tourism potential has been devastated by Kurdish terrorism in the area. Now, with the terrorists pushed further east and out of urban centres, the industry is hoping to persuade tourists that the area is safe. "It's so hard to make people go. If they go and see what's going on, their opinions will change," says Mr Karabulut.

Justin Huggler