Sunday, May 26, 2024
Update At 14:00    USD/EUR 0,92  ↓-0.0027        USD/JPY 156,94  ↑+0.005        USD/KRW 1.365,32  ↓-0.08        EUR/JPY 170,27  ↑+0.551        Crude Oil 82,16  ↑+0.8        Asia Dow 3.966,56  ↓-19.73        TSE 1.780,00  ↓-2        Japan: Nikkei 225 38.646,11  ↓-457.11        S. Korea: KOSPI 2.687,60  ↓-34.21        China: Shanghai Composite 3.088,87  ↓-27.516        Hong Kong: Hang Seng 18.608,94  ↓-259.77        Singapore: Straits Times 3,39  ↑+0.001        DJIA 22,07  ↑+0.02        Nasdaq Composite 16.920,80  ↑+184.762        S&P 500 5.304,72  ↑+36.88        Russell 2000 2.069,67  ↑+21.259        Stoxx Euro 50 5.035,41  ↓-2.19        Stoxx Europe 600 520,57  ↓-0.99        Germany: DAX 18.693,37  ↑+2.05        UK: FTSE 100 8.317,59  ↓-21.64        Spain: IBEX 35 11.246,00  ↓-65.1        France: CAC 40 8.094,97  ↓-7.36        

Global ambitions reflect confidence in Turkey’s future

Interview - September 28, 2015

Now the sixth most visited country on earth, Turkey has grappled with some challenges this year, posed by economic problems in Russia and instability on its borders. Turkish Tourism Investors Association Chairman and Atlasglobal President, Murat Ersoy, explains why Turkey’s unique advantages mean that the long-term prospects for tourism and aviation remain excellent. 


What are the key reasons why Turkey has been able to grow rapidly this century into the world’s sixth most popular tourism destination?

First of all, Turkey is a very successful agricultural country. Agriculture is very important for tourism because we can use the all-inclusive concept for holidays. Turkey is the country that uses the all-inclusive concept most successfully.

If you go on holidays with your family to Turkey, you can eat and drink everything you want. This is the first demand of the family. The parents do not want to run after their kids and worry about finding adequate restaurants.

They should be free to eat and drink everything they want. Some other countries use the all-inclusive concepts, but they are not as successful as Turkey, because they place a lot of limits on what can be consumed.

That is why families favour a Turkish destination.

Secondly, in the Turkish culture, we offer much better hospitality than other destinations. In Europe, workers in the tourism sector are perhaps more qualified and better educated.

They can speak better English, and they are more trained. However, they do not have the innate sense of hospitality that Turks have. 

Furthermore, Turkey is blessed with a great location. Turkey understood the importance of our location ten years ago, when we started to invest in making our country an aviation center.

Istanbul is the ideal hub for connection flights between Europe and the Far East. For example, if you fly from Bangkok to Frankfurt, you need to fly at least one more hour than you do if you travel Istanbul-Bangkok.

You can make the shortest connection in Istanbul. This is why Istanbul is very convenient for transit passengers. This was noticed 10 years ago by Turkish Airlines, and Turkey has since made a lot of investments in airports.

Without these airports, you cannot increase the capacity and traffic in the aviation sector. We started to privatize most of the airports in what were very profitable projects.

Ten years ago, if you said 'Turkey will become a world leader in aviation,' everybody would have laughed. They are not laughing now.

We have Turkish airport management brands that are operating airports in several foreign countries. If you say now, 'I am from the Turkish aviation sector,' people around the world will respect you.

The worldwide aviation sector is growing 3-4% every year. In Turkey, it is growing 9 or 10%, up to three times more than the worldwide average. Why? Because of the location of Istanbul.

It gives you a one-hour flight saving advantage, which is around USD100 per person.

In addition, labor is cheaper in Turkey. This means local services are available for better rates, and the competition becomes stronger.

The third reason is that, if you look at the Turkish economy, it is the 17th largest in the world. The Istanbul and Marmara area is creating 25% of the national income.

Approximately 40% of Turkish tax revenue is created in this region also. So for businessmen, and business groups, it is also a target destination, because they can sell their products much easier.

In addition, Turkey has neighboring countries which some investors are afraid to make investments in, such as Iran and Iraq.

If you want to sell your products to these countries, you should do so via Turkey, so this creates an important commercial business activity for Turkey and makes Turkey an important destination in the financial sector.

Because of my business, I have seen more than 80 countries, and more than 120 cities. In my mind, the most beautiful city in the world is Istanbul.

If we add the commercial facts and transit assets to the beauty of Istanbul, it automatically becomes the most perfect destination.

Despite these successes, arrivals went down in the first half of 2015, and the recent tragic bombing on the border has fueled existing concerns about Turkey not being a safe holiday destination. What would you say to those tourists in Europe who are no longer sure that Turkey is a safe country to visit?

These bomb cases are happening in the south-east of Turkey. Between the eastern border of Turkey and the tourism areas, there are nearly 2,000 kilometers.

But you are right, because of the international media coverage, people may go somewhere else because they may think they are at risk. There is no major risk.

The repeat travelers to Turkey know this. If there had been an attack in tourism areas, as happened in Tunisia, then people would be right to be wary.

But the last bomb was the result of internal problems of the neighboring countries on the eastern border.

At the beginning of this year, because of difficulties in the Russian economy, we faced problems with the Russian market. But the Russian market is now strong again and all Turkish destinations have improved positively.

Because of the recent bombing in Tunisia, most European tour operators cancelled their flights to that country and turned their attention to Turkey. How do I know this? Because of my airline.

Most of the cancelled flights came from Germany and other European countries to Turkish destinations. We also discussed potential problems with our Tourism Minister at the beginning of this year, and the Turkish Tourism Office announced to tour operators that they would support each charter flight with 6,000USD until the end of May.

This means the Turkish government promised to support 50% of the cost of the aircraft. We have seen a positive effect from this.

I recently discussed this again with the Tourism Minister, and Turkey is planning to repeat this subsidy for arrivals from September 15th until the end of November, meaning the season will extend until the end of November.

Tour operators will not open new destinations at our expense because it easier for them to extend their season here. This will make the balance of the year better than 2014.

Turkey has long been known as a beach destination to many in Europe, with the added attraction of Istanbul for city breaks. Which niche areas of tourism are ripe for further investment?

Antalya is very important. It is not only a sun, sea and sand destination. It is a destination for international meetings and congresses, like the G20 Summit, which will be held in November.

There are a lot of meeting and congress facilities there.

The Turkish Tourism Investors’ Association is planning to change to an association organized by law. So all tourism investors should be members of this association.

All tourism investment support will be collected in one organization. This organization will work together with the government. All strategies will be decided together with the private sector.

After these elections, the government promised they would make the changes we requested. It will be good for Turkey. You can see this model in Dubai, for example. Dubai is a very successful destination.

They made a dream tourism country from nothing.

Here in Turkey, we are trying to market our all-inclusive hotels for 70 euros to 100 euros per night. But this is only possible if the necessary infrastructure investments are made.

In Turkey, we have the highest technology and the most comfortable hotels. We even have 6-star and 7-star hotels in Turkey. Our problem is infrastructure.

This idea has also been accepted by the government. They decided to make investments to repair infrastructure.

A recent article in Today’s Zaman claimed that, in the past two years, the Tourism Ministry has failed to conduct a major international promotion campaign, cutting its budget for advertisements from $100-120 million per year to $15 million. What should be done by both public and private stakeholders to increase the international visibility of Turkey’s tourism attractions during this difficult year?

We look forward to the formation of the new government. Prior to the election, we were told the first law that that will be changed will be the Tourism Law. We are confident this will happen.

Promotion will be under the control of the private sector. And we are ready to also put our financial resources into the system. This budget will be much bigger and more effective.

The government said they are ready to cooperate with the private sector because this way, much better deals can be made.

When we look for success stories in the Turkish tourism industry, we cannot ignore your airline, now known as Atlasglobal. You have invested heavily in international expansion and a new brand identity. To what extent are your ambitions for the airline a reflection of your confidence in Turkey's future as an international business and tourist destination?

As Atlasglobal Airlines, we have brought many innovations into the private airline sector in Turkey with our technological investments and the quality of service offered to our passengers.

We offer a service above the standards of many European national carriers with our scheduled flight network covering Turkey, Cyprus, Middle East, Europe and Asia.

Atlasglobal is the only private airline in Turkey which serves with a full-service model and offers a complimentary in-flight catering service with an emphasis on Turkish hospitality and a real Business Class experience.

We have added a Sky Chef service for the flights from Istanbul which take 3 hours or more. The Sky Chef service began on London and Kuwait flights last year, and now on our Amsterdam, Düsseldorf, Paris and Bishkek flights, and it has attracted a great deal of attention from our guests.

We aim to offer the best service which will ease the lives of our passengers and make their travel comfortable for the best prices; because the focus of our operation is always “customer satisfaction”.

Our aim is to establish 8 airlines covering 14 countries under the name of “Atlasglobal Partners” and to be the local airline of all these strategic regions.

In parallel with the growth of the aviation sector in Turkey, we have begun the necessary changes in our corporate identity and raised the level of our ambition. We now include in our plans not only Turkey, but also different regions of the world.

Our aim is to make airline investments where required, such as the Commonwealth of Independent States (CIS), the Balkans, Southern Europe, North Africa and Middle East with new airlines to be established, and to expand our service network.

We are planning to establish an airline in South-East Europe in five different countries: Albania, Kosovo, Bosnia and Herzegovina, Montenegro, and Macedonia. It will be a joint sky under the name of “Atlasglobal Partners”.

We will establish another one in Saudi Arabia, and one in Russia. They are looking to create a Eurasian Union, so if you have one of these countries' aviation certificates, it will be valid in all these Eurasian countries, even for domestic flights.

This global project will be completed at the end of 2017. We will cover fourteen countries with eight different aviation certifications; in other words we will have eight airlines. The reason for this project is that Turkey has grown very fast.

The Turkish national flag carrier is the biggest airline in Europe, so there is not a big market left in Turkey. As a result, we do not want to use our resources to compete in Turkey.

We will direct our domestic operation network abroad and grow with new destinations.

In the aviation sector, we are training a lot of experienced people. We want to export aviation know-how to other countries which need our support, like Iraq. People from Europe or the United States may not be happy to work in Iraq or Libya.

However, with my Turkish passport, I can do it. As a Turkish investor, I can make investments there. These are countries which have promising economies but they are essentially out of reach for European and American investors.

We can go there with our Turkish brands. We are trying to analyse different hubs in these countries and organize new traffic for our investors. This is the project. These countries are all manufacturing areas, and energy transit hubs.

These are the target destinations for investors. In parallel with the expansion of our flight network, we will expand our fleet. We currently have 22 aircraft, and we are planning to increase the number of aircraft in our fleet to 100 by the end of 2020.

Besides, we hold a very distinguished and advantageous position compared to  similar private airlines in the world, since as Atlas Group we have a tour operator, hotel and airline elements together.

We will start tourism investments as well, in the regions where we make airline investments such as Albania and Southern Europe.

How does the London route you launched last year fit into this plan?

From all these countries, there will be direct flights to London. For example, if today you receive an Atlasglobal aircraft from one destination, Istanbul, in the near future you will receive aircraft from five or six different countries daily, totalling 14 or 15 arrivals.

Then, we will integrate these areas into an international alliance.

You are a relatively young but highly successful and respected entrepreneur in the tourism sector. Why did you decide to accept the challenge of representing Turkey’s tourism investors as Chairman of TYD?

The reason why we are representing investors here is that as Atlas Group, we are the biggest tourism group of Turkey. In our group, we have 12 hotels at five star and above standards under four chain brands with a bed capacity of 12,000.

We have 70% of the market share in Turkey’s organized travel market with Etstur. And we have an airline, Atlasglobal Airlines. This makes our group the biggest and the strongest in the tourism industry in Turkey.

Those who are signing contracts with Etstur are very relaxed. With these contracts, they go to the bank and they can get finance easily. We never face financial difficulties.

We are also supporting a lot of Turkish tourism investors. We tell them how they should make their investments. If they finalize their hotel investments, they bring them to us. We even take over the management of some of them.

We are all over the market. They rely on us because they can see that we keep our promises.

When I was appointed Chairman of TYD, I made it clear I did not want an association that only convenes once a month. I wanted us to be a commercial association.

For example, we are finalizing the instruments for marketing our members internationally.

In the Turkish Tourism Investors Association, first, we have owners of hotels; second, we have the owners of the biggest tour operators in different markets such as the Russian and European market; third, we have owners of airlines; and fourth, I also included the biggest credit banks which are financially supporting the tourism sector in Turkey.

I brought the most important instruments together in my Association.

Now, for example, investors are coming to me and saying, 'We have land on which we want to build a hotel. How do you finance it?' I prepare a project and the marketing model.

With some conditions, we can market a project. We can even transfer the money to your bank as a repayment of the credit.

If something goes wrong and the investor does not succeed, I am ready to buy the investment under those conditions.

I am the one who can see the market in advance, because I am an airline businessman. Tour operators sign a contract with me for the air markets. I can see money in advance.

From my position, I can advise my government. If reservations drop, we can prepare some campaigns and give support to cover the market.

If we prepare a warning letter for the government, they immediately react. I know what tour operators and airlines need.