Since the Byzantine era and throughout the Ottoman period, Turkey has been a magnet for travellers. Modern Turkey is no different, with its extensive coast line, the mosques and bazaars of Istanbul and the fairy chimneys of Cappadocia drawing millions of tourists each year. Today, it is the sixth most-visited country in the world. In 2012, some 31.8 million international tourists visited Turkey, generating $29.4bn in revenues.

The tourism industry is a hugely important sector of the economy, accounting for nearly 11 per cent of the country’s gross domestic product last year, according to the UK-based World Travel and Tourism Council. It is also a major employer, supporting 516,500 jobs directly and more than 2 million indirectly.

Tourism targets

The past decade has seen a rapid expansion of Turkey’s travel and tourism sector in the wake of the new era of political stability that began with the election of the Islamist conservative Justice and Development Party (AKP) in 2002. That year, the country welcomed 12.9 million tourists, generating revenues of $12.4bn. The government is keen to see the sector grow much further and increase its contribution to the economy.

As for other sectors, Ankara has set ambitious targets for the development of the travel and tourism industry by 2023, which marks the 100th anniversary of the founding of the Turkish Republic. According to the plan published in 2007, the target is for annual tourist arrivals to reach 50 million by 2023 and revenues from the sector to reach $50bn. The Association of Turkish Travel Agencies estimates that the number of visitors to Turkey will total 33 million in 2013.

To achieve its targets, the government has stepped up its marketing campaigns and is working with national carrier Turkish Airlines to promote the country as a destination. It is also investing in infrastructure and encouraging the construction of new hotels and is looking to aggressively expand the country’s conferences and exhibitions industry, while bidding to stage major international events including the 2020 Olympic Games, for which Istanbul is a candidate city.

Istanbul, with its rich cultural and architectural heritage and role as a transport hub, is a focal point for Turkey’s tourism industry. The city saw a 16 per cent increase in inbound arrivals last year over 2011, fuelling the call for more capital investment in transport infrastructure as well as increased accommodation options.

Room demand in Istanbul rose 8.9 per cent in 2012, while supply increased at just 4.6 per cent, according to hospitality industry tracker STR Global. Istanbul, and Turkey as a whole, is seen as a hugely attractive market for hotel investors. There are more than 5,000 hotel rooms in the development pipeline for Istanbul, but many more are still needed. Outside the principal markets of Istanbul, Ankara and the coastlines, there is an undersupply of hotel rooms. It is estimated the market could absorb more than 20,000 new rooms a year at current growth rates.

Improving Istanbul’s transport system has been a priority for the government, and the city’s metro and tram system has been undergoing significant expansion since 2009. The investment in new lines is continuing. The city is also set to benefit from a massive new airport from 2017, which will have a capacity of 150 million passengers a year and will help to support the continued growth of Turkey’s tourism industry.

Safety improves

The announcement of a ceasefire by Kurdish separatist group the Kurdistan Workers’ Party (PPK) earlier this year should also provide a boost to the sector, allowing travellers to visit areas of the country that have previously been deemed off limits. Perceptions of safety can do much to damage or lift tourism markets.

Indeed, Istanbul has benefited in recent years from the unrest affecting much of the Arab world, and has been particularly successful in attracting cash-rich travellers from the Gulf, who might otherwise have travelled to the troubled markets of Egypt, Lebanon and Syria. Turkey reported a 370 per cent rise in UAE tourists between August 2011 and August 2012, while Qatari visitors grew six-fold. Turkish Airlines recorded a 43 per cent jump in passenger traffic with the Saudi capital Riyadh in 2012.

The historical city of Diyarbakir and other towns in Turkey’s far east may now hope to similarly benefit from peace at home.