FOREIGN TOURISM TO SYRIA UP 40 PERCENT IN 2008

C O N F I D E N T I A L SECTION 01 OF 03 DAMASCUS 000524

SIPDIS

STATE FOR NEA/ELA

E.O. 12958: DECL: 07/21/2028
TAGS: ECON ETRD PGOV SY
SUBJECT: FOREIGN TOURISM TO SYRIA UP 40 PERCENT IN 2008

Classified By: Charge d'Affaires Michael Corbin for reasons 1.4(b,d)

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Summary
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1. (C) At the mid-point of 2008, the Syrian economy is
enjoying its best tourism season since 2002, and a 40 percent
increase in foreign tourism over 2007. A local expert
attributes the increase to a year of political stability in
the region and a greater SARG investment in marketing Syria
in Europe and Dubai. Although politically-motivated
journalism is suspected of discouraging Saudi tourism to
Syria this year, "middle class" tourists from other GCC
countries and Jordan are compensating for the loss. Foreign
tourism from non-Arab states is also up, with Iran expected
to contribute some 800,000 of an estimated four million
total. Major sources of European tourism are Germany,
Austria, Italy, Spain and Greece. Despite the boom, Syria
still lags behind Lebanon and Turkey in capturing a
proportionate share of regional foreign tourism, and SARG
economic reforms have not yet attracted the necessary foreign
investment to develop Syria's tourism infrastructure. End
summary.

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Best Year for Tourism since 2002
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2. (C) Chairman of the Federation of Syrian Chambers of
Tourism (and AmCit) Nashaat Sanadiki (protect) told us that
at the halfway point of 2008, foreign tourism to Syria was up
by 40 percent from 2007. If the trend continues, Syria is on
pace to welcome four million visitors this year -- the best
year for Syrian tourism since 2002. Sanadiki attributed the
boom to two major factors. First, he explained that tourism
had begun to decline in 2003 due to the onset of the Iraq
war, and had remained low due to the "Hariri problem" in 2005
and Israel's war with Hizballah in 2006. By comparison, he
said that in 2008 each of Syria's neighboring "volcanoes" had
been relatively quiet. Next, he said that the Chambers of
Tourism had convinced the SARG to spend five million dollars
on marketing Syria as a tourist destination at international
trade shows in European capitals and Dubai in late 2007 and
early 2008 -- a fivefold increase over previous years'
budgets for advertising.

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Despite Bad Press, "Average" Gulfies Still Love Syria
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3. (C) When asked about the rumor that the government of
Saudi Arabia had unofficially discouraged its citizens from
vacationing in Syria this year, Sanadiki replied that he was
not aware of any official Saudi travel advisory on Syria but
acknowledged that Saudi tourism to Syria was down. He
attributed the decline to two articles that were published in
the pan-Arab, Saudi-funded as-Sharq al-Awsat just before the
beginning of the summer tourism season that warned Saudis of
possible mistreatment at the hands of the Syrian security
services. According to Sanadiki, the articles alleged that
four or five Saudi nationals were arrested and beaten in
Syrian prisons in the spring of 2008. While claiming no
knowledge of such an incident, he said that if it had
actually happened, it was likely because the Saudis had
become drunk at a local "casino" and had either destroyed
their hotel rooms or otherwise disturbed the peace.


4. (C) Sanadiki contended that increased tourism from Kuwait,
Qatar, the UAE and Oman was compensating for the decline in
Saudis. He explained that while the wealthiest Gulf Arabs
prefer to vacation in Switzerland, France and the UK, Syria

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remains an attractive destination for "average" GCC citizens
due to its relatively cooler climate, Arab cuisine,
inexpensive accommodations and access to "nightlife." He
said the typical Gulf tourist drives his family to Syria and
rents a home for a month in a conservative neighborhood of
Damascus. With wives and children safely installed in
Damascus, the Gulfi men enjoy overnight forays to Beirut.

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Non-Arab Foreign Tourism Also Up
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5. (C) According to Sanadiki, Syria is also benefiting from a
jump in non-Arab tourism to Syria. He said that Iran is the
largest single source non-Arab country with an estimated
800,000 Iranians due to visit this year -- primarily
religious tourism to the Shia shrine of Sayeda Zeinab.
Amongst non-Muslim tourists, he said the largest source
countries are Germany, Austria, Italy, Spain and Japan.
Greece and Cyprus also contribute substantial numbers,
primarily for shorter shopping weekends or to visit Orthodox
Christian shrines. Whereas summer is the high season for
Arab tourism, Sanadiki said that Europeans usually come
around Christmas, Easter and when cooler weather returns in
autumn. He said the average European tourist purchases
either a 5-6 day package that includes a one-day trip to
Baalbek, Lebanon, or a 10-12 day trip that includes Jordan.

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Still No Comparison with Lebanon and Turkey
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6. (C) Even with a 40 percent up-tick in tourism, Sanadiki
lamented that Syria is still not nearly fulfilling its
tourism potential in the region. Just this week, Customs
officials at the Nasib border crossing with Jordan had told
him that 5000 cars per day were entering Syria -- mostly
Saudis and Jordanians. He next inquired with Customs
officials at the Jadayda border and found that 4500 foreign
cars were exiting Syria every day for Lebanon. He commented
on the wisdom of the Lebanese government's decision not to
require entry visas for Jordanians, citing the massive number
of Jordanian-plated cars transiting Damascus every Thursday
evening heading north and every Saturday evening heading
south.


7. (C) Sanadiki also mentioned the economic impact of the
Turkish dramatic TV series "Noor," which is dubbed into
colloquial Syrian dialect and broadcast on MBC satellite
channels four times per day. He said that Turkish Air and
other airlines had increased their service between Syria and
Turkey to 24 flights per week in order to meet demand, and
that tour operators were now offering special "Noor" packages
that included locations featured in the series as well as
shopping at clothing stores that offer a "Noor Collection."

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Foreign Investment in Tourism Infrastructure
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8. (C) Regarding foreign investment in Syria's tourism
infrastructure, Sanadiki said that FDI was also increasing,
although not quickly enough to capitalize on the current
demand. As an example, he said that the five-star Four
Seasons hotel is completely booked through the end of summer
and no new hotels would be opening in Damascus for at least
three-to-four more years. He said the Kuwaiti al-Khurafi /
Cham Holding Company project to build a four-star
Intercontinental Hotel with a shopping mall and movie
theaters is apparently stalled due to problems between the
major investor (the al-Khurafi family) and the
Intercontinental headquarters, and not due to the Syrian

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bureaucracy. By contrast, he said that two major tourism
projects in Lattakia are expected to open by the end of 2009,
including a 350-room hotel and a new marina / resort complex
with private villas being built by the Qatari al-Diar company
at a cost of USD 250 million.


9. (C) Sanadiki confided that Tourism Minister Saldalla agha
al-Qalaa was "not too pleased" with him for his recent
comments on Syrian television that the SARG's incentives to
foreign investors are insufficient to attract real capital.
He had suggested that, rather than offering tax exemptions,
the SARG should offer a faster, more efficient way for
investors to finish projects and start seeing return on their
investments. He claimed that the Federated Chambers of
Tourism (7 chapters around the country) had been granted
authority by President Asad -- whom he claimed had personally
chaired two of the Chambers' meetings last year -- to
recommend amendments to existing SARG legislation that was
impending tourism development in Syria.

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Comment
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10. (C) This year's tourism boom is providing a welcome,
albeit limited shot in the arm to a Syrian economy that is
facing inflation, decreasing oil revenues, a three-year
drought and lack of foreign investment. As Syria does not
yet have sufficient hotel space to meet demand and offers
little in entertainment options except kebab and nargileh, it
is not surprising that so many tourists are transiting Syria
en route to Lebanon and Turkey. With foreign cash primarily
spent on food, fuel and housing, the influx of revenue may
temporarily increase growth in the tourism and real-estate
sectors, but Syria needs significantly more investment in
infrastructure to sustain real GDP growth over the longterm.
CORBIN