Kurdistan focuses on boosting visitors

Infrastructure is being put in place to lure more tourists to the region. Published in MEED, 19 May 2014

With its 6,000-year-old citadel rising up in the centre of the city, there is no doubt that Erbil can lay claim to a rich history. The site is the most significant indicator of the tourism potential of Kurdistan, but there are also ancient castles, minarets and monasteries dotted around the region, along with impressive mountain scenery and ski resorts.

Even so, it was probably a surprise for many when in late 2012 the Kurdish city was named Arab Tourism Capital for 2014, beating the likes of Beirut, Sharjah and the Saudi Arabian city of Taif, which had all been competing for the honour. The Kurdish region may well be far safer than the rest of Iraq, but it is still not an obvious holiday destination for most people.

Events calendar

The authorities in Erbil plan to hold at least 40 events throughout the year to try to convince more visitors to come. A number of these have already taken place, including a children’s festival in mid-January, a skiing and ice-skating event at the end of that month and an international car show in early March. Horse racing and sky-diving events are also on the calendar, as is an international film festival.

In a sense, Erbil is tapping into an ongoing trend. In the years before the city was handed the accolade of tourism capital, the Kurdistan region had seen a surge of visitors. From about 377,000 in 2007, the number of tourists increased almost six-fold to more than 2.2 million by 2012, according to the most recent statistics from the General Board of Tourism, part of the Kurdistan Regional Government (KRG).

The greatest proportion of visitors come from other regions of Iraq, lured by the relative safety as much as anything else. In 2012, two-thirds of all tourists – almost 1.5 million – visited from other parts of the country. That year also saw international tourists outnumber those from within the KRG region for the first time in recent years, with about 434,000 visitors from beyond Iraq’s borders, compared with 313,000 from within the Kurdistan region.

Regardless of where they come from, most visitors to Kurdistan go to Erbil. In 2012, the province attracted 1.5 million of that year’s 2.2 million tourists. This is largely a consequence of it being the commercial centre for the region and having the best-connected airport. Some 21 airlines fly in and out of Erbil International, serving 24 destinations around Iraq, the wider Middle East, Europe and Asia. The smaller Suleimaniyah International airport offers flights to 16 destinations on nine airlines.

Despite the efforts to lure more holidaymakers, most of the people flying into and out of these two airports are either travelling for work or returning home to see family members. One hotel industry executive estimates that about 95 per cent of the guests at his Erbil hotel are visiting for business.

“It is mainly international businessmen coming in for the oil and gas sector, staying a week or two and talking to the government and opening factories and offices,” he says. “We have enjoyed some great occupancy levels since we opened, but it is mainly business.”

Business market

The nature of the visitors explains the character of tourism-related developments currently under way in the KRG region. There have been some efforts to make Erbil itself more attractive, not least the fountains and clock tower that now adorn the arcaded square to the south of the citadel. But the most notable additions for travellers have been the numerous hotels that have sprung up to cater for the business travel market, often in the four- and five-star categories.

Overall, the number of hotels across the region increased from 168 in 2010 to 259 by 2012, and almost 10,000 new rooms were added during that time, according to the General Board of Tourism. Several more have been completed since then. Among the more recent openings is the 78-room, four-star Copthorne Hotel Baranan in Suleimaniyah, developed by the local Faruk Holding at an estimated cost of $40m, and the larger Sheraton Dohuk, which has 202 rooms and was developed by the local Brilliant Role Group for $150m. The latter claims to be the first five-star hotel in the city.

Hotel projects

Many more hotels are due to follow in the near future, with a number of major international hotel chains moving in. Among the properties currently under construction are the five-star Hilton Erbil Hotel & Spa with 300 rooms close to the city’s airport; a 160-room Best Western hotel closer to the city centre; and the 293-room Sheraton Erbil hotel.

As these projects indicate, the Erbil governorate is attracting the lion’s share of investment in the region’s tourism and hospitality sector. In a number of instances, the hotels form part of a wider development, as is the case with a Marriott hotel that will form part of the Empire World real estate scheme in Erbil.

Construction was also due to start later this year on the $3bn Downtown Erbil development planned by the UAE’s Emaar Properties. This is set to include two hotels alongside a shopping mall, restaurants, office space, 15,000 apartments and associated facilities; the masterplan is still awaiting approval, however. Similarly, the $200m Korek Tower, planned by the local Korek Telecom, will house a five-star hotel as well as a shopping mall and office space in what will be the tallest building in the region.

Some other standalone projects are also under development, including Citadel Park in the Mustawfi area of Erbil. It will include a 2,000-seat open-air theatre and other space for public events. The project has an estimated budget of $200m, but is still waiting for approval from the client, the KRG. A main contract award is expected in the third quarter of this year, according to MEED Projects, which tracks project activity in the Kurdistan region and across the rest of the Middle East.

Although Erbil is the focus of most of the investment, there is some activity in other parts of the region too. In Suleimaniyah, for example, the KRG is planning a $2bn development known as Dukan Tourist City. This will include hotels, restaurants, a theme park, cinemas and casinos on a 2.4-square-kilometre site. The project is currently at the study stage, with Emaar and Faruk Holding both involved as developers.

The local Sherwan General Construction Company, owned by Kurdish developer Ibraheem Othman Khoshnaw, is also constructing a five-star hotel in Suleimaniyah, which will include a casino. There are further shopping malls planned by the Erbil-based Darin Group in Suleimaniyah and Dohuk, and the Kurdistan Board of Investment is behind the $500m Avro City project in Dohuk, which will include a sports stadium, a five-star hotel and several thousand residential units.

Not everything is going smoothly, however. Work on a $30m shopping mall planned by the local UB Holding in Dohuk, and known as the Dohuk UB Mall, is reported to have been put on hold during its execution phase and it is not clear if or when the work will resume. The project was to include a cinema complex and other leisure facilities alongside the retail outlets.

Perhaps the most important projects for the future of the region’s tourism industry are the various plans to improve aviation infrastructure. Significant expansion work is earmarked for the two existing international airports at Erbil and Suleimaniyah, with the KRG’s Ministry of Transportation & Communications as the client.

The $500m expansion of Erbil International is still in the initial planning stage, but could include a theme park, a golf course and a convention centre alongside more conventional additions, such as improved logistics and cargo-handling facilities. The contract for the expansion of Suleimaniyah airport is not due until June 2015. That project is designed to lift capacity from 2 million passengers a year to 3.5 million.

Third airport

The government is also hoping to tap into rising demand by building another international airport in the northwest of the region. Speaking to the Royal United Services Institute, a defence industry think-tank, in London in October last year, Falah Mustafa Bakir, who as head of the Department of Foreign Relations is the de facto foreign minister of the KRG, said, “We have major international airlines flying in and out of Erbil and Suleimaniyah and we are building a third airport in Dohuk.”

In March 2013, a joint venture of two Turkish firms, Makyol and Cengiz Holding, was awarded the contract for the construction of Dohuk airport. Earth works are currently being carried out on the site and the main construction work is due to be completed by June 2016. Once complete, the airport will have six aircraft gates and the capacity to handle about 1 million travellers a year, along with 34,000 tonnes of cargo.

Having put so much infrastructure in place, the task for the authorities will be to persuade more people to come and use them. For the hospitality sector to thrive in the Kurdistan region, people must come for leisure as well as business. Notwithstanding the award of the tourism capital title this year to Erbil, it is likely to be some time before the region is seen as an enticing destination for most holidaymakers, but some at least are hopeful it will eventually succeed.

“I think there will be a tourism industry in time,” says the Erbil hotelier. “It does have a lot more to offer in terms of tourism, but the tourist psyche needs to be a little more prepared. I don’t think people are completely ready yet to travel for a two- or three-week holiday to Iraqi Kurdistan.”