Impact of the Recently Encountered Politic Crises on Sultanahmet Region Tourism

Impact of the Recently Encountered Politic Crises on Sultanahmet Region Tourism
In this article, I am going to present a research about recently encountered politic crises on the Tourism of the Sultanahmet Region. However, before, from this perspective, I want to present historical process of tourism sector in Turkey briefly. Turkey, with its nature, history and cultural wealth is one of the world class special tourism centers. Nevertheless, because of not making investments to the sector, desired revenue from tourism could not be gained for a long period of time.

Tourism is developed rapidly and make significant contributions to economy as a result of increased investments and advertising activities after 1980s. However, researches and indicators reveal that the sector is very sensitive against diplomatic, political and economic breakages that take place in this process. Even a whisper of a crisis causes cancellation of huge size reservations. In respect to the geopolitical structure of the country, it is under a risky condition that social, economic, political crisis and the natural disaster can take place, Turkey tourism is open to threats.

Assoc. Prof. Mesut Albeni and Utku Ongun from Süleyman Demirel University explained the destabilizing milestones and split the crisis into two parts which are noncontrollable and controllable crisis in their research named “The Place of Antalya Tourism in Turkish Tourism and Impacts of the Crisis on Antalya Tourism”. Natural disasters, global diplomatic changes, international terrorism and societal changes are defined to be “uncontrollable crisis”; diplomatic changes, diplomatic terrorism, environmental problems, health problems and economic crises are defined to be “controllable crisis”. Crisis which took place in touristic destinations may have different impacts on demand. Crimes that are occasional and seemed as unimportant cause permanent decreases in demand, but continues events (e.g. terror or war) may abolish the demand completely. By looking at the historical process of the tourism sector, we observe that especially in international tourism, instability is experienced on the following milestones that I am going to draw up.

• After 1980, in Turkey’s tourism sector, which is improved by Tourism Promotion Law, deceleration is observed as in the growth acceleration because of the Chernobyl Event in 1986, Gulf War in 1992 and after that the terror activities of PKK terrorist body, respectively.

• Although tourism revenues achieved growth as a result of economic decisions in 1994 and devaluation of TRY, sufficient increase did not achieved. In the following years, negative impact of the economic risks became dominant.

• In 1997, economic crisis in Asian Countries affected Russia which has a significant tourist potential for Turkey. Therefore, it caused demand loss in Turkey.

• Marmara Earthquake which took place in 1997, caused approximately 173 million Dollars revenue in the tourism sector.

• After 2000, war and instability which took place in neighbor countries, the September 11 attacks and after that global terrorism which also included İstanbul, terrorist attacks in 2006, bird flu, caricature crisis which took place in Denmark, Israel-Lebanon crisis, imbalance of diplomatic situation in Iraqi caused decreases in both the number of tourists and revenues.

• Economic crisis starting in 2008, Gezi Park Events in 2013, Turkey-Syria tension increase between the years 2013-2014 and terrorist attacks started by the following processes, Russia crisis in 2015 continue to affect the tourism sector negatively. World Tourism Organization and The Ministry of Culture and Tourism data also enlighten the direction of Turkey and İstanbul tourism economy. When we take a glance at the tourism economy of Turkey, İstanbul and Historical Peninsula with numerical data; the number of foreign tourists increased to more than 1 million in 1977 while it was not outnumbered 1 million till 1972, reached to a number of 2 million in 1984, a number of 5 million in 1990, 9 million in 1998, and reached more than 17 million in 2004. In 2014, this number reached to 37 million for just foreign tourists and 40 million for local and foreign tourists. This number made Turkey the 6th in the world ranking and 30 billion Dollars in revenue making Turkey the 12th in the world ranking. According to the year 2014 data, total bed amount of accommodation facilities with investment and operation license of Turkey passed over 1 million.

While occupancy rate decreases, gained revenue increases. If we take a look at İstanbul which is a significant touristic destination for Turkey; while the number of incoming tourist is 11 million in 2013, 12 million in 2014, when it comes to 2015 the number is just 12.4 million however it was expected to reach 14 million. Consequently, it draws attention that contrary to the expected rate of increase in the number of incoming tourists, it decreased substantially. Tourists are coming mostly from Germany, Iran, Russia, United States of America, England, France, Italy, Iraqi and Saudi Arabia, respectively. When we look more close to the distribution of incoming foreign tourist numbers, while the number of incomings from Asia and Europe decreased significantly compared to the last year, there is a substantial increase in the number of incoming tourists from Middle East Countries. The highest number of tourists from Middle East countries is Syria and it is obvious that the reason for this is the civil war in Syria.

Facilitation numbers in İstanbul make up the 15% of Turkey and in total bed amount of that is 12%. According to the statement of Turkey Hoteliers, Operators and Investors Association on its website, it is observed that since the year 2012 there has become a general decrease in hotel fullness’s, room prices and gained revenue somewhat increased. The first 6 month of the year 2015 is static by compared to the previous year’s same period. After July, in the following months, decreases continue in comparison with previous periods. For the year 2016, it is seen that decrease continues by looking at the data for month-to-month.

The data mentioned insofar draws a general picture of Turkey and İstanbul tourism economy. When we examine tourism economy of Historical Peninsula; 1/5 of the staying tourists of Turkey are located in İstanbul, high rate of those of İstanbul are located in Fatih and Beyoğlu. According the data revealing the fullness of accommodation facilities, rate of fullness for Fatih and Beyoğlu is higher than the average rate of both İstanbul and Turkey.  However, according to the declaration of Turkey Hoteliers, Operators and Investors Association, rate of fullness is on the decline in all across İstanbul in 2015.

How crisis affected the so called “World Heritage”, Sultanahmet Region? In Sultanahmet Region, there are hotel management not exceeding average of 60 in the number with a similar scale. According to a research done about accommodation facilities of Historical Peninsula Sultanahmet Region, it is possible to say about the topic of how experienced problems in general and recently experienced crisis affected the sector that: The first depression in the market is took place with Gezi Park Events in May, 2013. However, since this environmentalist event allured some activist tourists, it reflected some positive impacts. The first terrorist explosion attack in Sultanahmet district took place in January, 2015 but after the explosion no decrease observed in the number of incoming tourist to İstanbul. In accordance with the data provided from region enterprises the impact of the previous explosion did not continue long and by March, the number of incoming tourists increased. Second explosion took place in the following year which is January, 2016 and the impact of the explosion on the region perceptibly reflected to the sector. It is possible to say that number of previous terrorist attacks before this event and increasing confusion in neighborhood countries are among the reasons for this situation. In addition, Russian citizen cancelled their reservation after the Russia crisis. It is observed that a significant decrease experienced in the number of European (especially in German customers, a rapid decline is experienced) and Japan citizen customers. Furthermore, whereas accommodation demand increased gradually by means of increasing hotel constructions and functional changes from real estate to hotels in Historical Peninsula, market started to subside because of the no increasing demand with the same rate. The profile of incoming tourists is decreasing in line with room prices comparatively and there become a tendency to Middle Eastern customers.

We learned from the businesses in the region that there was a decrease experienced in the rate of fullness’s of medium scaled and invulnerable accommodation facilities near to Sultanahmet Square, turnovers were fall down, personnel working in these facilities were started to be directed to leave unpaid in order to minimize the costs. Especially small scale, leaseholder businesses are starting to go out of business since they do not endure the market conditions or they are going to decrease the cost of hire purchases in order to minimize costs. We observe that medium scale and businesses which are in the statue of real estate proprietor, are more invulnerable to these conditions. Despite the crisis experienced in recent period, we learned that proprietors managing its own hotels do not selling-out its businesses, these pass into other hands took place mostly in the hotels that are bought as investment property. By looking at this general view, the market is going to be uncertain for accommodation businesses for the year 2016. However, a prediction can be made by the season opening period. In conclusion, the market actors are trying to adapt to the uncertain market conditions and on the other hand they continue to be concerned owing to the crisis experienced. Although the market affected by the previous crises, it built up in a short time period, however, because of the fact that the crisis in the new period are large-scale and difficult to be controlled, it seems not be possible to predict the results. Therefore, the topic of the reflection of existing situation to the real estate sector remain ambiguous. We hope that the sector will destabilized by getting over from the crisis and settling down the geopolitical events. To conclude, since the region of the research subject is the “World’s Heritage”; it may be predicted that the impact of the crisis to “the value of the real estate” will not be as great as the impact of the crisis to business profitability.

Harmoni Real Estate Appraisal, Special Projects Department, Assistant Real Estate Appraisal Expert, Urban Planner TUĞBA AYDIN

 

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