Syria has high expectations for its tourism sector, perhaps too high, given a governmental objective that tourism should account for 15 percent of the country’s gross domestic product by 2015. The number of tourists, investments and tourism sector employees is slated to increase by 9 percent year-on-year.
But five year plans are exactly that, plans. For Syria to start meeting these objectives, significant amounts of investment are required.
“Syria can absorb $20 billion in the tourism sector over the next five years, according to existing and expected demand,” said Muhamad Wahoud, chairman of the Wahoud Group, a major developer and investor in Syrian tourism projects.
What is notable is that these investments are starting to happen, and that the sector has grown exponentially over the past several years, from 2 million tourists in 2002, to more than 4 million last year. It also points to the marked shift in the economic policy of the Baath party over that period towards a free market driven by private banking, commerce, a fledgling stock market and dwindling energy revenues.
Syria has found tourism to be a major foreign currency earner. The country earned $2.6 billion in tourism receipts in 2006. And it’s growing — in the first quarter of 2009 alone the total revenue was $1.1 billion. All the while, Syria was essentially closed off to much of the world. That has value-added appeal, especially with Western tourists.
In the first four months of this year, the number of European tourists rose 54 percent from 2008, from around 24,000 to 37,000, according to the tourism ministry. Tourists from Germany and Italy were up 70 percent, while tourists from Britain have increased from 18,000 a year to nearly 25,000, according to Osama al-Nouri, managing director of the TransAsia Travel and Tourism agency in Damascus.
“Although the numbers are still quite small, it is an important increase,” al-Nouri said. “Foreign markets are definitely opening up, we’ve witnessed a growth rate of over 40 percent in the last four years.”
Emerging in the spotlight
The international media has certainly started to take notice, with travel articles on Syria in The Financial Times and The Wall Street Journal, while the cover of April’s Vanity Fair On Travel featured an article called “Syria: Loving it Among the Ruins.” Fashion magazine Vogue had a photo-shoot and model’s diary on Damascus. Julian Crane, marketing director of the Four Seasons Hotel Damascus related, the editor of Conde Nest Traveler — considered the leading luxury travel magazine — made a beeline for him at a recent conference in Europe, saying Damascus was the next destination on her list. Syria would appear to have arrived on the world’s tourist map.
Geography makes this inevitable, being a short distance from Europe and equally close to the Gulf market, which accounts for the bulk of tourist arrivals at 59 percent in the first quarter, and as high as 75 percent in previous years. Saudi Arabian tourists increased by 45 percent this year alone over 2008, attributed in part to the financial crisis, with Syria an affordable destination readily accessible by private vehicle. A publicity campaign kicked off last year by the Syrian tourism ministry in the Gulf states also helped.
The ministry also launched a public relations campaign in Europe, appearing for the first time this year in exhibitions in Paris, Berlin and London. Appealing to two distinct markets has advantages: Europeans come for historical and cultural tourism in the spring and fall, while Gulf tourists come for leisurely holidays away from the summer heat, renting apartments and villas in the mountains.
“They effectively complement each other,” said Dr. Nabil Sukkar, managing director of the Syrian Consulting Bureau. Meanwhile, some 100,000 Iranians, predominantly religious tourists, visit every year.
Looking east, west and within
With Syria seemingly at the cusp of a major tourism boom, the country stands to benefit from the experiences of more developed, and what some might say over-exploited, tourist destinations. Egypt, which receives 10 million tourists a year, and Turkey, with its 22 million tourists, come to mind.
“Syria’s strategy is to look for a more sophisticated and specialized market than mass tourism, similar to tour operators that go to Lebanon,” said Wahoud.
The developments underway are a clear indication of this trend, with notably few mid-range hotels but several four and five-star hotels under construction. Boutique hotels have sprung up in Damascus and Aleppo, and multi-billion dollar resorts and real estate projects are underway that will primarily target Gulf tourists.
“Hotels are going up everywhere in the country,” said Jihad Yazigi, editor of financial publication The Syria Report. “In Lattakia, a Rotana [hotel] opened in May, three to four hotels are to open in Tartous, the Coral Hotel is to open a five-star hotel in Aleppo. Accor is looking at projects, and Rotana has signed to manage a five-star hotel on the Beirut-Damascus highway.”
There is a real need for such development, with a supply gap of some two million nights per year in the four- to five-star hotel range.
“When there is a big conference all the hotels are full, and if you compare to Beirut, Damascus has just three four and five-star hotels, while Beirut has 20-25,” Yazigi said.
Over the next few years this will change, with a Movenpick set to open and the Wahoud Group teaming up with Kempinski to manage three hotels in the capital. All this will boost the appeal of Damascus, said Crane of the Four Seasons Hotel, the first 5-star hotel to open in Syria.
“With upcoming competition we view it as a positive thing, because when in an emerging market you see brands like Kempinski opening, it enhances awareness of the destination,” he said.
Projects such as the $8 billion Snobar project near Lattakia, the Wahoud Group’s $200 million Antardus project in Tartous, and the Majid al Futtaim Group’s $1 billion tourism city outside Damascus are also putting Syria on the map.
Developers are additionally banking on a rise in Syrian expatriate tourism — which numbered one million visitors last year — and attracting wealthy Syrians that visit neighboring Turkey, Lebanon and Dubai.
“These projects will have a good portion of rooms occupied by Syrians making in-country holidays,” said Wahoud. “This is encouraging us, as investors and developers, for the mega projects like ours.”
Percentage distribution of tourism project investments
Syrian investment in new tourism project developments
Decision time
But the focus on high-end development misses out on the full potential of Syria’s domestic tourism, although the government clearly sees its attraction. The government held a second fair on internal tourism in Damascus last month, and launched an “open shores” initiative that provides public services along the Mediterranean coastline at low prices for Syrians.
“But we are still a long way before it competes with international tourism and is accessible to those Syrians that can afford to travel outside, and those that cannot afford to,” said al-Nouri.
Hindering such development has been the government itself, dragging its feet over setting up a statistical bureau on the tourism sector and implementation of effective planning called for in the five-year plan. Sector players also point to a lack of tourism infrastructure and facilities, while the tourism minister himself has said the country lacks adequate human resources to welcome tourists. Sustainable development research also needs to be worked on.
“We haven’t harmed the environment yet, but we will,” said Louay al-Naddaf, managing director of Bell Consulting House in Damascus. “We need to know what every tourist’s positive and negative impacts are, it’s not a simple equation. We have the scale to have more tourism than Jordan, but it’s a planning issue.”
Bureaucracy is a further concern. There are some 60 licensed tourism projects, with more in the pipeline, but al-Naddaf said that many projects are struggling with bureaucratic procedures between the tourism ministry, the office of legislation and the environment, the Supreme Commission for Tourism led by the prime minister’s office, and local administrative differences.
“There is a conflict of interest by the authorities,” al-Naddaf said.
Such hurdles might explain the limited foreign investment in the sector. “More than 60 percent of investment is by Syrians, 7 percent international, and the remaining 33 percent Arab, mainly Gulf, investment,” al-Nouri said.
One thing it does suggest is that Syria has yet to reach the targets set in the five-year plan in terms of investment, particularly foreign. But with developments underway, Syria is heading in the right direction if it can manage the right balance between the demands of the differing tourist segments.
“Some people say we’ve achieved something till now, others say not, but I think we are somewhere between both,” said Naddaf of the government’s tourism objectives.
