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New violence across much of Iraq in 2013 has stifled any recovery for the travel and tourism industry. Unrest ignited by the crisis in nearby Syria and political conflict have brought Iraq back into the world news. And yet, despite ongoing violence across much of the country, there are pockets of safety in Iraq, such as the Kurdistan area, which is completely removed from the war zone. Indeed, Erbil was chosen as Arab Tourism Capital 2014 by the Arab Tourism Committee, beating Beirut in Lebanon, Taif in Saudi Arabia and Sharjahn in the UAE. However, although Erbil is attracting a number of GCC and Arab businesses, it will prove very challenging for the country to attract more diverse nationalities long term, due to the lingering negative image of Iraq, but also strong competition from GCC countries, which have already established a good track record in the region.

Kurdistan Area: A Rising Star

The Kurdistan area is seeing huge development, which is expected to significantly increase the number of tourists. In turn, this could triple tourism revenues in the area by 2016. The Kurdistan area has made progress in leaps and bounds since 2007, with three new airports built, the largest of which is in Erbil, and new hotels being added to the market. Erbil International Airport also saw the launch of its own carrier in 2013 (Zagrosjet), which began flying to Ankara in Turkey in October 2013 and now offers flights to Beirut in Lebanon, Adana, also in Turkey, Stockholm in Sweden and Amman in Jordan. The airline is a partner of Turkey’s Atlasjet.

The hotels category also saw new entries in 2013. Wyndham opened its first property (Ramada Sulaymaniyah Salim Street) in Kurdistan during the year, Rotana, the first international hotels company to enter Erbil, also expanded in Iraq, with a Rayhaan-branded hotel opening in the religious tourism destination of Karbala in 2013. In addition, the Millennium Hotel opened a new outlet (The Grand Millennium Hotel Shary Jwan) in the city of Sulaymaniyah in Kurdistan in early 2014. Hyatt Regency also plans to open a hotel in Sulaymaniyah in 2017 according to trade sources, which will be the first Hyatt-branded hotel in the country.

These investments are expected to boost hotel supply in the country, with more than 3,000 rooms anticipated in Kurdistan alone by the end of 2016, and an increase in the number of businesses, as well as religious and domestic tourism trips, driving demand. Najaf and Karbala will continue to perform well as the main religious destinations and with a recovery in arrivals from Iran.

Challenges Remain

The real difficulty for Erbil and the Kurdistan area is being able to compete with rival destinations which have grown to become very powerful and attractive. Dubai is hosting the World Expo in 2020; Qatar the FIFA World Cup in 2022; and Abu Dhabi is home to the Formula 1 race on an annual basis. These major events are key magnets for tourists, and, despite Erbil being named Arab Tourism Capital for 2014, there has to be a stronger effort to sustain the gains achieved this year during the longer term. Dubai is the uncontested business hub in the region; destinations such as Erbil will have to adopt a more innovative approach in order to attract business tourists away from Dubai.

Religious Tourism Could Be the Answer….

Religious tourism is expected to be one niche which will perform well in Iraq, especially with tourism from Iran recovering somewhat as the economic crisis eases in Iran thanks to better cooperation with the US government. As such, arrivals from Iran will increase by 3% between 2013 and 2018, bringing 495,720 tourists into Iraq, which will not only include religious tourists but also leisure travellers. Religious travel could thus become key, with very strong potential for growth upon the return of stability.

 

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