why tourism is a big investment

Politically, 2005 has seen Syria seriously isolated. As a destination for travellers, it’s never been so attractive. Since 2000 the number of visitors to Syria, discounting day-trippers - who are mainly from Iraq or Lebanon - has grown by 14% per year. Between 2003 and 2004 Syria ranked top among Middle East states in achieving a 47% increase in visitors, who exceeded 3 million. The government, keen to portray an image of Syria other than that propagated by the US, is taking an acute interest.

“Syria announces that the tourism sector is a strategic sector. There will be no procedure that is not correct to tarnish this sector”, said Tourism Minister Saadallah Agha al-Qalaa to a packed forum of some 1,200 foreign investors who converged on Damascus at the end of April for the country’s first Tourism Investment Market.

The conference outlined incentives to encourage investment in 37 sites across Syria, ranging from hotel refurbishments, sites for shopping malls or bare land that can be turned into facilities for tourists, such as theme parks. The incentives - tax holidays for all projects for the first seven years, labour laws that allow tourism workers to be sacked for financial reasons for the first time in Syria, guarantees on repatriation of all capital investments in hard currency and the possibility to finance projects entirely through foreign bank accounts – are some of the most progressive economic reforms the country has seen in many years.

And they seem to have worked, attracting initial development applications for 22 sites worth approximately $538 million, according to reports in the Syrian press. Some investors, however, remained sceptical that Syria’s notoriously complicated investment climate had been fully dealt with. Riad Kahale, the developer of the five-star Regency Park Hotel just outside Damascus, asked for guarantees that were he to sell his project on to a further party he would not be caught by double taxation, one from the Ministry of Tourism and the other, on the value of the project, from the Ministry of Finance.

“I built a hotel in Bludan and when it was finished I wanted to transfer it to a company with my wife and son as partners. The Ministry of Finance took 30-40% of the value of the project in tax. They enforced their demand without legal support,” said Kahale. “This is a very significant problem for developers, people who have the financing and develop the project and then transfer it. Those people will not touch the project if it is open to the sword of the Ministry of Finance.”

Visit www.syriatourism-invest.com for more information (although most of the site is rather unhelpfully in Arabic but there is an option to contact)