Turkey's state incentives ready tourism sector for investment

Wyndham Grand Istanbul Kalamis Marina Hotel, Turkey. Photo credit: Wyndham Hotel Group

Turkey's low investment and operational costs along with several state incentives have made the country ready for major investments in the tourism sector, according to Oya Narin, chairperson of the Turkish Tourism Investors Association. 

Narin told Hürriyet Daily News she predicts Turkey's tourism industry will progress throughout 2018. Although she expects the country to record the same number of tourists this year as recorded from 2014 to 2015, Turkey can set a record if tourist numbers exceed 40 million. "But we need an improvement in prices, which requires changes in sales techniques and different marketing techniques. We need better management and promotion of destination points. In short there is a need for a transformation and a new restructuring," Narin told Hürriyet Daily News.

The Turkish Tourism Investors Association has already put the country on track to transformation. The state held a tourism congress in November 2017. The subsequent report from this congress focused on the need to begin transforming the tourism sector. 

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Now that the country has already expanded its accommodation capacity with updated hotels, the sector's goals are to increase the tourism period, which currently stands between 150 and 180 days to 365 days while adding more residences, condos and vacation clubs for tourists to spend more time in Turkey. The association has planned to appeal to older age groups, build health tourism and develop the necessary facilities for visitors to stay any time throughout the year. 

"When you look at Bodrum, for example, there is a dynamic life throughout the year. But in other destinations, the moment you leave the center there is only life during summer. When there is no sociocultural dynamism, we cannot operate there. We need to equip our destinations as world cities offering gastronomy, entertainment, natural, cultural and historical beauties. Istanbul is a world city, and we also have Bodrum. But we need to bring similar dynamism to the rest of our touristic destinations," Narin said. 

Some state initiatives established to boost investment include extending 49-year leases for some tourist facilities, enabling the practice of timeshare property ownership, developing assisted living facilities and branding and enabling direct sales and tour operators. Other incentives involve tax exemptions, interest rates and personnel to be employed. The country's location has also attracted investors with its coasts, history and "access to at least 1.5 billion people within a three-hour flight time."

However, Turkey does come with its setbacks, including security issues and disadvantages from fluctuating exchange rates. "They bring an advantage in terms of sales prices and make the environment more attractive for foreign investors. But at the end of the day these fluctuations are temporary. As investors we need to have a long-term outlook," Narin said. 

The emerging market is also susceptible to changing regulations due to its high growth rate. However, Marin told Hürriyet Daily News, "You have to look at the returns. In some stable environments growth rates and profit margins remain low. Turkey is a growing country, and when there is such energy you have to be dynamic and open to changes. The success of politicians depends on adapting to the changes."

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