Boston, MA -- (SBWIRE) -- 02/08/2013 -- The Turkey Tourism Report examines the latest performance of the tourism sector and looks at its longterm potential. The rate of growth in foreign tourism broadly slowed during 2011, after an impressive start earlier in the year (probably boosted by the Arab Spring, which affected tourism rivals in the region such as Egypt and Tunisia), but remained strong at just under 10% compared with 2010.

In the short term, BMI anticipates a sharp slowdown in the sector, mainly due to extremely weak economic conditions in the eurozone - a major source region. Also, regional political instability, particular the situation escalating in Syria which has a border with Turkey, is likely to deter visitors. This represents a reversal of fortunes for Turkey, as BMI believes that the sector benefited from the regional instability in 2011. Ongoing domestic political violence also remains a threat to tourism.

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Provisional figures for January-July 2012 show a decline of just under 2% year-on-year (y-o-y) in foreign visitor arrivals. This shows a slight improvement during the year to date. The key source market for tourist arrivals, Germany, recorded modest growth of 4% y-o-y, while the number of visitors from the second largest market, Russia, was down about 2%. The UK, meanwhile, recorded a near 7% fall.

Visitors from Europe as a whole fell by 1% y-o-y, though there was slight positive growth in the number of arrivals from the Commonwealth of Independent States (CIS). Of note, there was a substantial fall in arrivals of close to 40% y-o-y from both Iran (a top ten source market) and Syria.

Provisional data for Q212 record something of a turnaround in the hospitality sector (after a bad start to the year in Q1), with a modest 3.7% y-o-y increase in total room nights. Foreign tourist nights (80% of the total), rose just under 4% compared with the same quarter in 2011. Domestic tourist nights were up a slightly weaker 3%.

In an effort to meet rising tourism demand, the Transport Ministry is expected to announce a tender competition for the construction of a third airport in Istanbul shortly. The aim is to complete the bidding process by end-2012.

Over the last quarter BMI have revised the following forecasts and views:

- BMI's growth forecasts for foreign arrivals have been revised down marginally to 1.7% and 5.5% in 2012 and 2013 respectively.
- BMI's eurozone real GDP growth forecast for 2013 has fallen to 0.7% from 1.0% previously. Growth in Germany is forecast to slow sharply to 0.7% (revised up from 0.4%) in 2012, but picking up to 1.5% (edged down from 2.0%) in 2013. For the UK, our economic growth forecast for 2012 has been revised down to 0.2% (from 0.6%).

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