Case Study – Turkey (Field study)

History and Development of Tourism in Turkey

Istanbul has long been a popular tourist destination for its rich history, its natural beauty and its location
linking Europe with Asia. The popular overland train linking Paris to Istanbul, which ran from 1883 to 1977,
was known as the Orient Express. Attempts to establish an organised tourism sector in Turkey started in
1923 when the ‘Travellers Association’ was established, which seven years later became the ‘Turkey
Touring and Automobile Club’. This played a major role in promoting attractions through its publications
of road maps and brochures, and it implemented awareness and educational programmes to develop
tourism in its early years.

By 1934 the government started to pay attention to the sector by having an administrative department
for tourism as part of Ministry of Economy, which enabled the birth of the National Tourism
Administration in Turkey (NTAT). In 1949, the NTAT was restructured to become the Directorate General
of Press, Publication and Tourism. The government's interest in tourism as a source of foreign currency
and jobs was expressed by the Tourism Encouragement Law in 1953, followed by a five-year development
plan. Further efforts were devoted to regulating tourism businesses, licensing and encouraging
development of the sector by the establishment of a Tourism Bank. In 1957 the Directorate General was
upgraded to a Ministry and represented in the Cabinet. In 1963 tourism was placed as a secondary priority
in the development plan under the heading of the service section, although the stated objectives of
tourism were to contribute to the national economy through its earnings, encourage domestic
holidaymakers, provide jobs and ensure sustainability of natural and cultural tourism products.

The sector has implemented several five-year plans which led to the development of mass tourism, with
several beach resorts. During the first plan (1963-1967) the public sector established the basic
infrastructure, stimulating the beginning of private sector investment in hotels and other leisure facilities.
By the end of the second plan in 1972, the tourism sector had started to show significant growth, and over
the four year period 1970-1973, international arrivals almost doubled from 724,000 to 1,341,000. At
about the same time the Association of Turkish Travel Agencies (TURSAB) was launched. This non-profit
organisation helped to organise travel agents, encourage them to grow and provide appropriate services.
Mass tourism growth was encouraged in the third plan (1973-1977), with the government allocating
public land for investors to develop.

In the next five years the growth rate slowed down due to inadequate marketing, lack of infrastructure to
boost tourism and the economic difficulties the country was going through. In 1982, a new Tourism
Encouragement Law was put into effect, which offered generous incentives to the investors, resulting in
foreign investment and an increase in bed capacity, especially in the south and southwest regions of
Turkey. Attention was also given to education and vocational training as well as improving the quality of
the products and services.

By 1985, the tourism authorities realised that sustainability of products and protection of environment
were necessary. The next plan started to diversify the tourism offer, although the traditional mass tourism
continued to expand. In the 1990-95 plan there was a clear emphasis on environmental sustainability and
cultural protection as well as further diversification and human resource development.
During the 1990's the region faced serious crises, namely the Gulf War (1990-91), a civil war in former
Yugoslavia (1991-2001) and devastating earthquakes in 1999 in northwestern Turkey. Nevertheless,
tourism in Turkey showed its resilience and continued its growth during most of these years. In 1995,
there were 7,083,000 international arrivals, with foreign exchange earnings of US$ 4,957 million.
However, 1999 saw an abrupt decline of 25% in international visitors from the previous year, from 8.96
million in 1998 to 6.893 million in 1999 (Yalol, 2015).

Since the Millennium the tourism authorities have been focusing on quality improvements, intensifying
marketing, diversifying the products offered and improving accessibility to products by investing in air
transport. Meanwhile tourism has been included in the national strategy “Tourism Strategy of Turkey-
2023”, announced in 2007, and which is enabling the sector to implement strategic planning, and to
enhance public-private as well as national regional collaboration.

In the first fifteen years of this millennium tourism in Turkey grew substantially. Between 2000 and 2005
the number of international arrivals increased from 9.59 million to 20.27 million. In 2011 most of the
South Mediterranean Countries recorded a reduction in the total contribution of tourism and travel to
GDP, except Turkey which recorded the most important growth in the world, at 11% growth, according to
the WTTC (reported by Lanquar, 2011). Arrivals reached a record high of 39.81 million in 2014, with foreign
exchange earnings of US$ 38.766 billion (UNWTO, 2015). In that year, Turkey ranked as the 6th most
popular tourist destination in the world. The share of people employed in tourism (out of total
employment) also improved steadily, from 5.3% in 1990 to 7.7% in 2005 and 8.3% in 2015, with more than
2,193,000 jobs. Over the 20 year period 1990-2010, the number of people employed in tourism grew by
219% while international arrivals increased by 439%, indicating an increase in efficiency and productivity
over this period.

Since then, Turkey has experienced a decline in international arrivals. Its problems arose partly from its
location neighboring the conflicts in Syria and Iraq. This has led to a series of terror attacks and a failed
coup in July 2016. In consequence, Turkey’s economically vital tourism industry has been significantly
depressed with arrivals falling from its peak of 39.8 million in 2014 to 25.4 million in 2016. According to
the Hoteliers Association of Turkey (reported in The Guardian, 2016), hotels experienced a decline of 50%
in bookings in 2016 during July and August – normally their busiest months, while according to the WTTC
(2016), the contribution of travel and tourism to Turkey’s GDP was 12.9% in 2015 but declined to 12.5%
in 2016.

Research with European tour operators indicates considerable apprehension in the marketplace about
travel to Turkey on the basis of personal safety. This has led to the downturn in levels of Risk & Crisis
Management in Tourism Sector: Recovery from Crisis in the OIC Member Countries 80 visitation despite
Turkey’s outstanding value-for-money as hoteliers and ground operators offer heavy discounts in order
to entice tourists back.
Table 1 International Visitor Arrivals and Foreign Exchange Earnings - Turkey

Crises Affecting Turkish Tourism

Specific crises that have affected Turkish tourism over the last two decades fall into a range of categories
including natural disasters, political unrest and disease outbreaks.

 1999: Izmit Earthquake – This occurred in northwestern Turkey and affected a densely populated
area, resulting in the death of over 17,000 people and rendering around half a million people
homeless.
 2003-2011: Second Gulf War - There is no clear evidence of any impact on tourism in Turkey
during this period, with steady growth in arrivals, from 13.34 million visitors in 2003 to 34.64
million in 2011 (UNWTO, 2012).
 2006: Avian Flu - This global pandemic had a significant impact on tourism to Turkey with
international visitor arrivals declining by 7% to 18.9 million from the previous high point of 20
million in 2005. Tourism from European markets was badly affected, with arrivals from the
Netherlands declining from 250,000 to 100,000 over this period.
  2011 to Present: Syrian Civil War – The ongoing civil war in Syria is part of a wider wave of unrest
starting from the 2011. The Syrian crisis has a direct impact on Turkey in more than one way.
Besides the problem of refugees that it has to deal with, the country recently was a victim of
terrorism partly related to the Syrian conflict. Although Turkish tourism has proved resilience to
several crises including social unrest and violence, the impact of repeated terrorist attacks and
the upheavals of the last two years have proved to have a significant negative impact on tourism.
 2015: Downing of Russian Warplane – In November 2015 a Russian Su-24 attack craft was shot
down by a Turkish F-16 in the Turkey-Syria border area. Russia responded by applying economic
sanctions on Turkey, including a travel ban to Turkish holiday destinations. However, the number
of Russian tourists to Turkey in 2014 was 4.5 million, which is only 40% of the total decline in
arrivals from 2015 to 2016, indicating that other factors such as the frequent terrorist attacks, the
political uncertainty and the image of the country played a major role in the depression of the
sector in 2016. As the conflict between Russia and Turkey nears a resolution, it is expected that
in 2017 Russian visitors will return. Whether that will be enough to restore the tourism industry
will only be determined at the end of the 2017 tourism season (Ozen, 2016).
 2015: Various Terrorist Attacks - In 2015 the number of terrorist attacks of various intensities and
source had a direct impact on tourism in Turkey which extended to the following years. In general
terms tourism recovers more quickly if terrorist attacks are not repeated (as discussed in Sections
1 and 2). But in 2015, the attacks were frequent, therefore the impact was felt with more than
30% fall in the number of the European visitors who comprise over a half of the international
arrivals to Turkey (Lowen, 2016).
 2016: Coup Attempt – A coup attempt by terrorists took place in Turkey on 15 July 2016.

Source: Cokcevik, pers. comm. 2017

Recovery from Crises in Turkish Tourism

Up to 2015, the Turkish tourism sector demonstrated resilience in recovering from the various crises that
had occurred over recent decades, although they may have prevented the country from maximising its
full potential as a tourism destination. However, the combined impacts of the Syrian Civil War and the
2016 attempted coup d’état have combined to form the worst crisis experienced so far, impacting on
perceptions of Turkey and contributing to a significant (39%) downturn in visitor arrivals in 2016 (Cokcevik,
pers. comm. 2017).

The wider regional crisis has also had a cumulative (negative) impact on the image of Turkey in the
country’s main source markets, including its proximity to Syria. In particular, terrorist activities have raised
concerns about safety and security generally.

To counter the decline, Turkey is intensifying its overseas marketing efforts and seeking to diversify its
source markets with increased emphasis on the Middle East and Asian markets (Cokcevik, pers. comm.
2017). Specific initiatives have been:

1. Cooperative Marketing Plan – Following the Avian Flu outbreak in 2006, a US$ 50 million marketing
campaign was organised in Turkey’s key markets. The campaign was funded 50/50 by the government
and the tourism industry. Marketing activities included advertising in key markets, public relations
campaigns, and incentive tours.

2. Pricing – the price of hotel rooms and holiday packages were reduced in the aftermath of the Avian Flu
epidemic and other crises.

3. Image Building – Particularly since the outbreak of civil war in Syria in 2011, Turkey has engaged in a
programme of image building, comprising perception management in key markets through social media
and familiarisation trips for tourism trade and media representatives. Specific initiatives have focussed on
the cruise sector. In all cases, media, tour operators and cruise companies were appraised of security
measures that had been put in place for foreign visitors to Turkey. However, the Ministry recognises that
image building will require a sustained approach over the medium to long term.

4. 2016 Action Plan – In January 2016, the government of Turkey announced an Action Plan to counter
the crisis impacting on the country’s tourism sector, comprising a suite of interventions including:

 Direct Subsidies: US$ 75 million in direct subsidies to the tourism sector, including ‘flight
support’ for Group A certified travel agencies (US$ 6,000 subsidy for a plane bringing 100 foreign tourists
– i.e. US$ 60 subsidy per capita). Initially, this subsidy applied to charter flights at certain airports but it
has now been extended to a wider range of airports and some scheduled flights, and to cruise lines.

 Indirect Subsidies: The accommodation sector has been supported by indirect subsidies in the
form of bank credits and tax postponement (US$ 85 million has been provided in indirect subsidies). 30%
of Turkey’s accommodation is on public lands for which owners/operators pay an annual lease/rent. This
rent has been deferred for 3 years. In the south-east of the country, which is less developed from a tourism
perspective, the government has postponed all taxes (including certification fees).

 Employment Initiative: In the 2nd half of 2016, the government announced an employment
package in response to job losses in the tourism sector in Anatolia. The package involved payment of
wages and social security for 9 months, and also paid the wages of intern students. In 2017, the
employment initiative was extended to tourism businesses around the country.

 Business Development Strategies: Many Turkish businesses have implemented new business
strategies to remain competitive. These include product differentiation and repositioning. In the case of
the latter, many tourism businesses have focused their attention on the domestic market.

 Risk and Crisis Plans: A number of larger Turkish tourism resorts and hotel groups have their
own protocols to deal with crises. The Intercontinental Hotel Group, for example, has a Risk and Crisis
Protection Team at its headquarters in London. Risk profile reports are consistently updated, and risk and
crisis priorities are (in order of priority) to protect visitors/guests; protect the hotel brand and reputation;
protect the investment (Arslan, pers. comm. 2017). The intercontinental hotel group’s Risk and Crisis
protocols for Turkey are substantially the same as those for other countries.

Other strategies put in place by the sector include:

 Communications – with staff, partners and customers to constantly reassure trade partners and
guests that Turkey is a safe destination.
  Differentiation – By creating a significant difference during the time of crisis, tourism enterprises
can be successful.

 Sales – Review of ‘lapsed’ accounts with trade partners including travel agencies, tour operators,
and wholesalers. Major sales pitch targeted at lapsed account holders to re-capture lost business and
increase hotel occupancy rates (Arslan, pers. comm., 2017).

Critical Success Factors in Resilience of Turkish Tourism

The key factors which (until 2016 at least) allowed tourism in Turkey to remain relatively healthy are as
follows:

 The commitments from various governments since the 1980's that tourism is a priority, with
significant legislative, political and financial support allocated to the sector. These included government
incentives to invest in tourism, which have encouraged local and foreign investors to play a larger role in
the development of tourism establishments, especially beach resorts, bringing the number of beds to one
million.

 Increased use of the internet to reinforce the country’s positive image and reputation by
enhancing official websites and making more use of social media. A particularly attractive Facebook site
on Turkey for instance is ‘Tourism & Art & Turkey’, where a series of attractive photos and brief comments
are posted. Gulbahar and Yildirim (2015) also found that Turkish hotels were prolific users of social media,
particularly Facebook, but also Instagram, Twitter, LinkedIn and Foursqare (with hotels which were part
of international chains more likely to use these channels than locally owned hotels). The result is that
Turkey is among the top 10 destinations in the world, as ranked by social media users.

 The richness of the country in its cultural heritage, history, archaeological remains, landscape
and natural beauty and beautiful beaches.

 Though most international arrivals to Turkey come for sun/beach holidays, in recent years the
country has become also known for cultural tourism, health tourism and spas, golf and other sports
tourism, marine activities, and development of the MICE sector.

 Competitiveness in terms of variety of attractions, quality of products and services and value-
for-money.

 Proximity to the main source markets of Europe, Middle East and North Africa and accessibility
via good connections with most source markets, partly as a result of government investment in the
national airline Turkish Airlines; this again is part of the prioritization of the tourism industry.

 Similarly, the government and private sector have invested in creating better port facilities for
cruise ships. Cruise Line International Association – CLIA (2017) research reports that the cruise industry
is on the rise with the use of new types of cruise ships. The project of building 13 city ports in cooperation
with Greek cruise ports will facilitate growth in this sector and build on an already significant market: in
2011 Turkey received 2.2 million cruise passengers.
  In recent years, because of political and social developments in the MENA region including the
developments from 2010, many Western countries have applied extra restrictions on visas to citizens of
countries in the region. This means that Turkey is well placed to attract tourists from Middle Eastern and
North African states because of its Islamic culture, excellent halal food and affordable prices. It has
encouraged the Islamic market by abolishing visas for people from some countries, while easing the
process by allowing online applications for others.

 Turkey is a good business centre in terms of textiles and clothing for Muslim culture, with
competitive prices. Visitors from MENA countries mostly stay in big cities especially Istanbul, where
shopping is plentiful. They stay in hotels for short periods but for longer stays they normally get private
flats and private accommodations, in proximity to shopping areas.

Weaknesses and Threats to Turkish Tourism

 The principal threat to tourism in Turkey is the image of insecurity, which caused a significant
decline in the number of international arrivals in 2016 and which may extend to 2017.

 A longer-term risk is the emphasis until recently on mass tourism, which has resulted in
intensively used beach resorts. The rapid and intensive construction of hotels has had environmental
impacts on the beaches, other coastal areas, agricultural land and forests; the presence of large numbers
of visitors also has social impacts on local communities (Kuvan and Akan, 2012). This may undermine the
success of tourism in Turkey unless environmental management regulations are adhered to and product
diversification is successfully achieved.

 A further weakness is that while tourism in coastal areas benefits the country's economy, it does
not reduce inequality between regions (Tosun et al, 2003).

Conclusion
Tourism in Turkey has grown steadily since the 1980s. The sector is mainly focused on mass tourism, with
bed capacity of around one million supported by cultural attractions and other activities. In recent years,
the authorities have recognised the need to diversify its offer, expanding health and spa tourism, marine
activities, golfing and MICE tourism. The 'Tourism Strategy of Turkey-2023' emphasises diversification of
products and the sustainability of tourism, focusing on different regions with a new approach away from
the traditional ‘Sun, Sea and Sand’ mass tourism. The strategy also attempts to increase the resilience of
the sector by involving a wider range of stakeholders from local communities and civil society in the
planning and implementation of tourism in order to minimise environmental and socio-economic impacts
(recommendations made by Cetinel and Medet, 2009).

UNDP and the Ministry of Culture and Tourism of Turkey have a longstanding partnership since 2007,
focusing on various segments of tourism for local economic development. “Future is in Tourism” Project
which is being implemented in partnership with the Ministry of Culture and Tourism, UNDP and one of
the leading entrepreneurial Turkish group sets a good example and an ideal model for the private and,
public sectors, as well as improving NGO partnerships as they play a great role in developing community
based tourism implementations. “Future is in Tourism” is designed to provide local tourism actors and
NGOs with necessary guidance, tools and resources to strengthen their capacities in order to contribute
to the sustainable tourism development through partnerships with public and private institutions.

Although tourism grew rapidly until 2015, since then the country has been hard hit by a series of terrorism
attacks, leading to an abrupt decline in international tourist arrivals. In January 2016, the government of
Turkey announced an Action Plan to counter the impacts of the crisis on tourism, and currently the
authorities are intensifying their marketing efforts to restore the image of the country. Meanwhile they
are expanding their marketing efforts to Asia and the Middle East.