Still reeling from Putin snub, Turkey tourism further threatened by Istanbul blast

Germans accounted for most of the 10 foreigners killed in Istanbul's historical square on Tuesday, threatening the tourism sector where Germans constitute the largest group of tourists in the Turkey.

ISTANBUL // A suicide bomb in the heart of Europe’s largest city did not just target innocent tourists, it also hit a US$32 billion (Dh117.5bn) industry already caught up in the conflict next door.

No one made a greater contribution to Turkey’s tourism receipts last year than Russians and Germans, who have helped make the country the world’s sixth most-popular holiday destination.

Russians are staying away from Mediterranean resorts because of a political row over the war in Syria. Now Germans have been affected in the most-visited square in Istanbul, accounting for most of the 10 people killed on Tuesday morning.

“The tourism sector will suffer even greater losses in 2016, particularly given that Germans constitute Turkey’s largest group of tourists,” said Naz Masraff, director for Europe at political risk consultants Eurasia Group. “The deteriorating security environment and its impact on tourism will weigh on economic sentiment.”

Turkey plans to increase the importance of tourism to help underpin a pickup in the economy following the collapse in emerging markets and a political quagmire that led to two elections in six months. Last year, though, was on course to be the first since 2006 when the number of tourists failed to rise.

Russian president Vladimir Putin clashed with counterpart Recep Tayyip Erdogan over the downing in November of a fighter jet involved in the Syria war. Since then, Russian tour operators were banned from selling vacations to Turkey and the countries suspended visa-free travel.

The industry was also harmed by waves of bomb attacks attributed to ISIL militants, including one in Ankara in October that killed more than 100 people.

Previous attacks targeted Kurds at political rallies, suggesting spillover from the war in Syria, where Kurdish militants are the primary ground forces fighting ISIL. The bomb in Istanbul’s historical centre is the first time foreign tourists have been targeted.

There was no immediate claim of responsibility, though the Turkish government identified the assailant as a foreign member of ISIL who arrived from Syria recently.

Istanbul, the former seat of the Byzantine and Ottoman empires, hosts more visitors each year than New York, according to the 2015 Mastercard Global Destination Cities Index. The device exploded just metres from the Blue Mosque opposite Hagia Sofia museum. A suicide bomb last January killed one officer at a nearby police station.

“It’s a well-calculated target aimed at undermining Turkey’s tourism industry,” said Oytun Orhan, an analyst at the Centre for Middle Eastern Strategic Studies in Ankara.

Tourism directly accounts for 4.7 per cent of the economy compared with 7 per cent in neighbouring Greece, according to the World Travel and Tourism Council. The government plans to boost receipts to $35.5bn by the end of 2017 from $31.5bn last year.

German foreign minister Frank-Walter Steinmeier said eight of his countrymen were killed and another nine severely injured.

“For many years, terror hasn’t impacted us Germans as it has today,” he said. “We need to clarify who the assailant is swiftly, and clarify the circumstances.”

Visitors from the nation made up the largest share of vacationers in Turkey for all of the last three years, or 15 per cent of them in the first 11 months of 2015. Russians were second, according to Turkey’s ministry of culture and tourism.

* Bloomberg