We expect that 2007 will come out up 8 percent higher than 2006 [tourism] rates and that the number of foreign tourists coming to Turkey will be around 21.4 million

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‘Tourist paradise’ Turkey cautiously optimistic for 2007
Turkey’s tourism industry saw serious drops in tourist numbers through
its 2006 season, but is seeing positive indicators that reservations
from Europe are going to pick up again this year.

Oktay Varlıer, president of the Tourism Investors Foundation, said
structural problems in 2006 combined with generally negative trends
made last year’s season the first since 1999 to finish lower then the
previous year, according to the Anatolia news agency.

Overall world tourism increased in 2006, said Varlıer, growing 4.5
percent compared to the previous year, though it was Greece, Spain and
other Aegean countries that reaped the most benefits from this growth.
Varlıer noted that although Turkey didn’t experience a disaster like
1999’s earthquake last year, 2006 did not allow the tourism sector to
attain its goals. He explained: “There were two main factors in the
lack of success in 2006. One was the disruption of our greatest
advantage, the price-quality balance, and the other was our careless
responses to things like bird flu, the cartoon crisis and the murder
of the priest. We see that economic balances in the sector have been
disrupted.�

He went on: “The giant 50-percent increase in tourism demands through
2004 and 2005 were not reflected adequately in terms of price
increases for hotel rooms outside of Ä°stanbul. And this is tied to the
uncoordinated increase of room availability. Despite the fact that
room prices haven’t gone up, spending in the Turkish lira has
increased. The total inflation for 2003, 2004 and 2005 was nearly 30
percent. But despite this foreign currency rates did not increase.
High value-added, excise and employment taxes have continually pulled
profit margins downward. The reduction in materials being bought has
forced concessions in service quality.

“The most dangerous factor for Turkish tourism is a reduction in
tourist satisfaction. Turkey in recent years has been able to capture
the delicate balance between price and quality. But the events of 2006
disrupted this balance,� he noted.

Varlıer talked about how Turkey must come up with a better-planned and
more effective publicity policy, noting that while Turkey needs to
work on straightening out certain image problems, it also has to come
up with publicity strategies that highlight its differences in
comparison with its competition. Varlıer noted that the Ministry of
Culture and Tourism has made budget increases for publicity.

“The strategies, planning and implementation for publicity need to
occur not on a yearly basis, but on a more long-term basis....There is
a particular need for long-range publicity programs aimed at
supporting Turkey’s image. We also need to start focusing on
destinations within Turkey, rather than just presenting the country as
a whole. In this way, we will be able to directly reach our targeted
tourism customers, focusing on certain regions,� he predicted.

He also spoke about how the Tourism Structural Services Foundation,
which is expected to be legally formed sometime soon in the future,
will assist in helping publicize certain regions of Turkey.

Varlıer reiterated that Turkey was a paradise for tourism, noting that
there will still many things that had to be taken care before this
potential could be realized. “According to the first impressions being
related by tour operators this year, Antalya and the Aegean will
experience higher levels of success in Western European [tourist]
markets than last year. In addition Turkey is firmly placed on a more
positive international economic position than last year. In light of
all these developments, we expect that 2007 will come out up 8 percent
higher than 2006 [tourism] rates and that the number of foreign
tourists coming to Turkey will be around 21.4 million,� he forecast.