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Forging the Competitive Future of TurkeyIstanbul Sultanahmet Tourism Cluster
Prepared by Dr.Melih BuluInnovative Clusters-A New Challange
18.Sepember.2003, Gothenburg , Swedenwww.competitiveturkey.org
0
300
600
900
1200
1500
1800
1980 1985 1990 1995 2000F 2010F 2020F
Worldwide Growth of Travel
Source: Trends in international Tourism-B.H.Archer
Tourism receipts and arrivals are growing rapidly. “…growth will continue into the next century and the rate of increase is unlikely to fall significant ly…”
Number of Tourists:1980-2020E
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300
600
900
1200
1500
1800
1980 1985 1990 1995 2000F 2010F
Revenue:1980-2010E
Basic Factors
History:A fundamental advantage Turkey has many historical sites surrounded by nature. History
provides great advantage. Most important places are related to Byzance (Haga Sofia, wall of Istanbul,etc.) and Ottoman Empire (Blues Mosque, Topkapi Place,etc.). Also many interesting places related to beginning times of Christianity (House of Maria, various ancient churches, etc.)
Nature:Nature provides great advantage. You can go either skiing or beach at the same season.
Mediterrian beaches are very appropriate for sun and beach tourism whereas high mountains are the places for outdoor sports like paragliding, rafting, etc.
Geographical Position:Turkey is very near to Europe where many tourists come from. Moreover Istanbul is an
important airline node.Hospitality:Turkish people are very warm to guests. They like to help foreigners traditionally.Entrepreneurs:Since 1983, very brilliant Turkish entrepreneurs were appeared in the country. Some of
them have established considerable tourism companies.
History:A fundamental advantage Turkey has many historical sites surrounded by nature. History
provides great advantage. Most important places are related to Byzance (Haga Sofia, wall of Istanbul,etc.) and Ottoman Empire (Blues Mosque, Topkapi Place,etc.). Also many interesting places related to beginning times of Christianity (House of Maria, various ancient churches, etc.)
Nature:Nature provides great advantage. You can go either skiing or beach at the same season.
Mediterrian beaches are very appropriate for sun and beach tourism whereas high mountains are the places for outdoor sports like paragliding, rafting, etc.
Geographical Position:Turkey is very near to Europe where many tourists come from. Moreover Istanbul is an
important airline node.Hospitality:Turkish people are very warm to guests. They like to help foreigners traditionally.Entrepreneurs:Since 1983, very brilliant Turkish entrepreneurs were appeared in the country. Some of
them have established considerable tourism companies.
AntalyaTravel agencies, tour operators, hotels, airport,
museums, car rental firms Sultanahmet hotels,travel agencies, tour operators, carpet sellers, touristic shops,
restaurants, museums
AntalyaTravel agencies, tour operators, hotels, airport,
museums, car rental firms Sultanahmet hotels,travel agencies, tour operators, carpet sellers, touristic shops,
restaurants, museums
Sultanahmethotels,travel agencies, tour operators,
carpet sellers, touristic shops, restaurants, museums
Sultanahmethotels,travel agencies, tour operators,
carpet sellers, touristic shops, restaurants, museums
TaksimTravel agencies,tour operators, hotels,
car rental firms, restaurants, entertainment places
TaksimTravel agencies,tour operators, hotels,
car rental firms, restaurants, entertainment places
FethiyeTravel agencies, tour
operators,hotels, paragliding companies, diving companies
FethiyeTravel agencies, tour
operators,hotels, paragliding companies, diving companies
MarmarisTravel agencies, hotels,
yatching companies, diving companies
MarmarisTravel agencies, hotels,
yatching companies, diving companies
KusadasiTravel agencies,hotels, touristic
shops, yatching companies, diving companies
KusadasiTravel agencies,hotels, touristic
shops, yatching companies, diving companies
Except Istanbul and Cappadocia, all other tourism cluster areas are using the benefit of sun&sea tourism
CappodocciaTravel agencies, hotels, airport,
museums, ballooning companies
CappodocciaTravel agencies, hotels, airport,
museums, ballooning companies
Tourism Cluster Formation Areas of Turkey
0
50.000
100.000
150.000
200.000
250.000
300.000
350.000
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
Number of Beds in Turkey Increases
Winter is dead season for Turkish tourism business
Seasonality in Turkish Tourism
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
Janu
ary
Febru
aryMarc
hAp
rilMay
June Ju
ly
Augu
st
Septe
mbe
r
Octobe
r
Novembe
r
Dece
mber
199619971998
0
10
20
30
40
50
60
70
1981 1982 1985 1987 1988 1989 1990 1993 1996 1997
years
% o
f sel
ectin
g to
urist
ic a
ctiv
ity
personal
Package tour
Source: DIE
Percentage of people who prefer package tours is increasing
Domination of package tours is increasing
EU Countries%50
ABD%9
Japan%6
Old Eastern Block%13
Arabic Countries%5
Other%17
Most of the tourists came from European countries by airways
source: bulletin of accommodation statistics 1998
air%90
sea%10
How Tourists reach Istanbul ?Where tourists come to Istanbul?
Istanbul is an attractive place for the people from all over the world
0
1.000.000
2.000.000
3.000.000
4.000.000
5.000.000
6.000.000
1994 1995 1996 1997 1998
ISTANBULANT+IZM+MUG
A tourism expert says “firms in Istanbul were sure that tourists would come to Istanbul due to its magnificent cultural treasuries and they did nothing during past years; however, tourists started to prefer Southern
Turkey
Tour operators prefers Southern Turkey
w Rich cultural infrastructure
w Most of the cluster members are available
w Decrease in share of the tourists coming to Sultanahmet
w Geographical concentration of related elements
w A success story in Sultanahmet will be copied easily to other potential cluster candidates
w We believe that the probability of being successful in this area higher
w Rich cultural infrastructure
w Most of the cluster members are available
w Decrease in share of the tourists coming to Sultanahmet
w Geographical concentration of related elements
w A success story in Sultanahmet will be copied easily to other potential cluster candidates
w We believe that the probability of being successful in this area higher
Why Istanbul Sultanahmet Tourism Cluster?
We started with the cluster so that we are the strongest
High
Low
Low HighHigh
• High structural barriers to entry• Rich history infrastructure required
• Taksim area provides competitive service to coming tourists to Istanbul
• Istanbul vacations can be replaced by Athens, Rome, Paris or Madrid
• Tour operators constructing new hotels in southern part of Turkey so they can divert tourists to those hotels instead of Istanbul
• No bargaining power for basic inputs: buses, accommodation, unskilled service workers
• During peak times utilization rate of 5 star hotel reaches high rates; those times the bargaining power of these hotels rise
• During national holidays, most of the transportation companies have high bargaining power due to increase of domestic demand
• Agents are bombarded with information on numerous new destinations
• Agents often receive “incentives” to recommend specific sites
• Internet provides more information to customers about all possible options but Istanbul is not good at preparing necessary web sites
Sultanahmet is an attractive tourism area for Turkey
• Sultanahmet has great advantage because- Low labor costs-High differentiation opportunities-unique historical sites
• Paris, Rome, Madrid and Athens have similar characteristics
Rivalry AmongExisting
Competitors
BargainingPower of Suppliers
BargainingPower of Suppliers
Threat of SubstituteProducts or ServicesThreat of SubstituteProducts or Services
BargainingPower of Customers
BargainingPower of Customers
Threat of NewEntrants
Threat of NewEntrants
Istanbul Sultanahmet Tourism ClusterIndustry Attractiveness
ChanceChance
Government Policy —LOW
Government Policy —LOW
The Cluster — MED+Hotels, tour operators, tourist shoppingcenters are working together for tour organizations-Sector members are not sharing the information with others
Demand Conditions — MED-Number of people travelling is fluctuating- Foreign tourists generallyprice sensitive-Most of the tourists came fromEuropean countries+Big potential from Muslim countries -Summer time is the peak season whereas winter time number of tourists are too low+/-Local people does not know the area so they are not visiting currently
Strategy Structure Rivalry — LOW+Many travel agents competing -No committed long term strategy plans in the sector-Volume driven strategies emphasizeprice-based competition
-Municipality does not give priority to sector-Ministry of Tourism does not have related mechanisms for understanding the sector
Basic Factors — HIGH+History of different civilizations+Good nature+Strategic location: close to Western and Eastern Europe,Russia, the Middle East+/-Low cost labor-Bad cap drivers
Advanced Factors — LOW-Tourism related schools are not enough both in quantity and quality+New airport building +Candidate membership of
Turkey can provide new
opportunities
Strategy, Structure and
Rivalry
Strategy, Structure and
Rivalry
SupportingIndustries (Cluster)
SupportingIndustries (Cluster)
DemandDemandFactorsFactors
Istanbul Sultanahmet Tourism ClusterDiamond Analysis
No long term strategy in the sector
Nurdogan Sengüler- Web Designer, Carpet SellerIskender Çayla - General Director of Retur Group (travel agency mainly working on Spanish speaking countries)Celal Ögmen - Associate President of Kumkapi Development AssociationErdalKüçükyalçin - Associate General Secretary of Turkish History FoundationErhan Çakay - General Secretary of TUROBNurdan Üstman - Board member of TURSAB responsible from trainingNebi Yasar - Tan Tourism Ministry Sultanahmet RepresentativeCemal Ekingen - President of Private Hotels AssociationAhmet Basar - 4RENK (manager of Design Company)Irfan Arikan - Bogaziçi UniversityHülya Yilmaz - General Coordinator of Çitlembik Yayincilik
and many hotel, travel agency and restaurant representatives
Nurdogan Sengüler- Web Designer, Carpet SellerIskender Çayla - General Director of Retur Group (travel agency mainly working on Spanish speaking countries)Celal Ögmen - Associate President of Kumkapi Development AssociationErdalKüçükyalçin - Associate General Secretary of Turkish History FoundationErhan Çakay - General Secretary of TUROBNurdan Üstman - Board member of TURSAB responsible from trainingNebi Yasar - Tan Tourism Ministry Sultanahmet RepresentativeCemal Ekingen - President of Private Hotels AssociationAhmet Basar - 4RENK (manager of Design Company)Irfan Arikan - Bogaziçi UniversityHülya Yilmaz - General Coordinator of Çitlembik Yayincilik
and many hotel, travel agency and restaurant representatives
Sultanahmet Tourism cluster started to solve the problems of the sector
Istanbul Sultanahmet Tourism ClusterSultanahmet Cluster Participants
Challenges1. EU Accession changed the rules of the game
2. External challenges
1. War in iraq(first and second war)
2. Terrorism(PKK and others)
3. Earthquakes
3. Trust problem
4. University industry cooperation
5. International Marketing
1.EU Accession changed rules of game
• Travelling between EU and Turkey getting easier
• Big European tourism companies introduced all inclusive system
• They either buy or rented most of Turksih hotels yearly
• They capture the tourists who are travelling alone with
increasing portion
2.External Challenges
– War in iraq
• first and second war
– Terrorism
• PKK and others
– Earthquakes
• Izmit and Bolu
3.Trust and Communication
Ring of direct tourism product
Ring of direct organization
Supporting ring
Transport(air, bus,rental, taxis etc.
Accommodation(hotels, hostels, etc.)
Food
Shopping(carpet, souvenirs,etc)
Guides
Entertainment & culture
Historical Sites
Turkish travel agents
Turkish tour operators
Tourismoffices of Ministry
Financial services
Health
Telecom Companies
Police
Transportinfrastructure(roads, airports, signs)
Manpowertraining(managerial,service)
Ministry of Tourism
Ministry of Culture
Media
TÜRSAB
TÜROB
TYD
Turkish History Foundation
Customes
Museums
Universities
Lines indicate strong links.Between all other items,almost no organised links
Insurance
Foreign Travel
agents
Foreign Tour Operators
Mislink between cluster members and foreign travel agencies, foreign tour operators prevents control on the demand side
Istanbul Sultanahmet Tourism ClusterCluster Map
ANALYSIS1.cluster members do not trust each other. Especially, fierce competition in last years has created a trust problem 2.Communication channels are either not available or not open to everybody 3.Sector organizations are collects same type of sector members: TURSAB for travel agencies, TUROB for Hotels. There is no hybrid organizations that serves different members that is in tourism sector
ANALYSIS1.cluster members do not trust each other. Especially, fierce competition in last years has created a trust problem 2.Communication channels are either not available or not open to everybody 3.Sector organizations are collects same type of sector members: TURSAB for travel agencies, TUROB for Hotels. There is no hybrid organizations that serves different members that is in tourism sector
PROBLEMCurrent communication level is not sufficient among cluster members
PROBLEMCurrent communication level is not sufficient among cluster members
SOLUTIONS1.Sultanahmet e-group was established in order to open new communication channel among cluster members2.Cluster meetings will continue by increasing the participation3.www.sultanahmetonline.org is being launched4.A new newspaper will be launched Sultanahmet Postasi
SOLUTIONS1.Sultanahmet e-group was established in order to open new communication channel among cluster members2.Cluster meetings will continue by increasing the participation3.www.sultanahmetonline.org is being launched4.A new newspaper will be launched Sultanahmet Postasi
Training programs for internet usage, increasing participation to cluster meetings and usage of the benefits of e-mail group will increase the communication level
Current communication level is not sufficient among cluster members
u Web site will be very useful to make the cluster members come together
u It will be good example to other potential clusters to show an example of team work
u A professionally designed site will help cluster members’ understanding of where the available technology is
u Web site will motivate people in order to come together
u Web site will help communication of cluster members effectively
u By using the tools that web site provide, they will use the latest marketing tool in the world
u Demonstrate the benefits of cluster cooperation through short-term gains
u Reach out to new customer segments via the Internetu An integrated approach to customer service:w get information, make flight, hotel, restaurant reservations, in-country travel plansw Build your own customized travel itinerary on-line with cluster members
u Link other clusters to the site, develop a one-stop Turkey site u Partner with the World Bank on the Turkish National Gateway project
A Virtual cluster is being established with the help of www.sultanahmetonline.org
“Sultanahmet Web Site” is the first seeable output of the cluster work
4. University industry cooperation
Some eduation organizations tries to give support to industry however, they are not very successful
until nowTurkish History Foundation:
This foundation is occurred mostly from academicians. They have very satisfactory issues related to Istanbul History. Moreover, they are planning to arrange some Istanbul History tours. But their tourism sector related contacts are not developed.
Turkish History Foundation:
This foundation is occurred mostly from academicians. They have very satisfactory issues related to Istanbul History. Moreover, they are planning to arrange some Istanbul History tours. But their tourism sector related contacts are not developed.
Tourism Related Schools:Tourism and history related departments
are present in universities; however, university members do not have improved communication link with the sector. General miscommunication situation between university and industry is similar in tourism as well. People from the sector says that education level in tourism high schools are quite low. Graduates of these high school can not speak a foreign language sufficiently and they do not have enough knowledge about Istanbul’s historical background.
Tourism Related Schools:Tourism and history related departments
are present in universities; however, university members do not have improved communication link with the sector. General miscommunication situation between university and industry is similar in tourism as well. People from the sector says that education level in tourism high schools are quite low. Graduates of these high school can not speak a foreign language sufficiently and they do not have enough knowledge about Istanbul’s historical background.
5. International Marketing
• Low internet usage skill in the sector• Problems about reaching the target foreign
market
We have very important assets; however, we do not know how to market them
History Tourism Cluster should develop strategies urgently in order to market its products
Big potential from Muslim counties
l “When we tell about beard of Prophet that is in Topkapi Palace, everybody got interested in to coming to Istanbul.”
–One of the tourism expert participated a tourism fair in
Malaysia
Big potential from Muslim counties
l “When we tell about beard of Prophet that is in Topkapi Palace, everybody got interested in to coming to Istanbul.”
–One of the tourism expert participated a tourism fair in
Malaysia
l “A Canadian tourist want us to prepare a tour for his family in order to see Armenian locations and historical monuments in Turkey. Therefore I believe that Greeks, Jews and Armenians living all around the world are great potential for us”
– A travel agency in Sultanahmet
area
l “A Canadian tourist want us to prepare a tour for his family in order to see Armenian locations and historical monuments in Turkey. Therefore I believe that Greeks, Jews and Armenians living all around the world are great potential for us”
– A travel agency in Sultanahmet
area
- Most of the people emloyed in the sector has not got any computer courses during their education
- Computer tarining courses in the sector is not available. Moreover,managers who are illetarate in computer related issues do not trust computer sellers.
- Most of the top managers still think about computer as a game tool that childeren play games
- Most of the sector managers have not realized the opportunuities of computer networks yet.
- Most of the people emloyed in the sector has not got any computer courses during their education
- Computer tarining courses in the sector is not available. Moreover,managers who are illetarate in computer related issues do not trust computer sellers.
- Most of the top managers still think about computer as a game tool that childeren play games
- Most of the sector managers have not realized the opportunuities of computer networks yet.
Training to sector managers about the opportunities that computers provide will be very helpful
Tourism personnel do not have computer knowledge
- Most of the people in manager position has not get any internet training so they are illeterate about the possible opportunities of internet. This cause the other people working under these managers could not give necessary importance to internet opportunities.
- People in te sector are not following the technologic changes; therefore they are not well prepared to serious changes that will effect their future . For example, travel agencies has not realized the threat of internet travel agencies yet.
- Do not know how to reach potential customers (searching, putting the site in search engines)
- Tourism sector needs to people who have internet knowledge urgently. These people will bring both necessary know-how and dynamism to the sector
- Most of the people in manager position has not get any internet training so they are illeterate about the possible opportunities of internet. This cause the other people working under these managers could not give necessary importance to internet opportunities.
- People in te sector are not following the technologic changes; therefore they are not well prepared to serious changes that will effect their future . For example, travel agencies has not realized the threat of internet travel agencies yet.
- Do not know how to reach potential customers (searching, putting the site in search engines)
- Tourism sector needs to people who have internet knowledge urgently. These people will bring both necessary know-how and dynamism to the sector
By introducing internet training courses together with TURSAB and Bilkent University, Sultanahmet Tourism Cluster members will gain an new competitive tool.
Managers of firms do not realize the opportunities of the internet
- e-mail usage on the personal base is only %20 in Sultanahmet Tourism Cluster. Moreover, most of the users are checking their e-mails once in two days.
- People are using e-mail since the tourists push them to do so. Therefore travel agency employees are using more e-mail compared to other sector members.
- 90% of the firms do not have their own domain name related e-mail adresses givento their employees.
- e-mail usage on the personal base is only %20 in Sultanahmet Tourism Cluster. Moreover, most of the users are checking their e-mails once in two days.
- People are using e-mail since the tourists push them to do so. Therefore travel agency employees are using more e-mail compared to other sector members.
- 90% of the firms do not have their own domain name related e-mail adresses givento their employees.
E-mail usage will increase the efficiency of the cluster to work
E-mail usage is not developed among the tourism sector members
PROBLEMskill and infrastructure problem on internet usage
PROBLEMskill and infrastructure problem on internet usage
ANALYSIS1.Tourism personnel do not have computer knowledge2.Managers of firms do not realize the opportunities of the internet.3. e-mail usage is not sufficient in the sector members
ANALYSIS1.Tourism personnel do not have computer knowledge2.Managers of firms do not realize the opportunities of the internet.3. e-mail usage is not sufficient in the sector members
SOLUTIONS1. training programs will be started together with TURSAB andBilkent University for internet usage skill2. Cluster members will be pushed for participating trainings
SOLUTIONS1. training programs will be started together with TURSAB andBilkent University for internet usage skill2. Cluster members will be pushed for participating trainings
Increase in usage of internet will provide great support Sultanahmet Tourism Cluster members in their business
Most of the Sultanahmet tourism people does not use the benefits of internet
- Most of the sector members do not have clear customer definition on their mind that will serve. When asked they are giving such definitions that they want serve whoever comes; however, this causes a situation that they are spending the scarce resources in order to satisfy everybody, and at the end nobody become satisfied.
- People are accostumed to live within the fight-firing activities. This prevents to make longer term plans for the sector. Target customer definition is one of the things that should be done urgently.
- There is no study made until now by tourism related organizations such as Ministry ofTourism, TURSAB and TUROB about the target customer that Turkish Toursim sectro should target
- Most of the sector members do not have clear customer definition on their mind that will serve. When asked they are giving such definitions that they want serve whoever comes; however, this causes a situation that they are spending the scarce resources in order to satisfy everybody, and at the end nobody become satisfied.
- People are accostumed to live within the fight-firing activities. This prevents to make longer term plans for the sector. Target customer definition is one of the things that should be done urgently.
- There is no study made until now by tourism related organizations such as Ministry ofTourism, TURSAB and TUROB about the target customer that Turkish Toursim sectro should target
Sultanahmet tourism cluster started to discuss about its target customer!
Target customer definition is not clear for foreign tourists
- Sultanahmet travel agencies find their customers in Sultanahmet square. They are either do not know other marketing channels that they can reach the potential customer or they could not have effort to do it alone.
- Sector firms do not know how to use marketing channels. They are no serious contacts with foreign tour operators, travel agencies, journalists, writers, etc.
- Opportunities about direct marketing of internet has not known yet. For example, searching possible contact points from internet and reaching to target customers via e-mail was not tried until now.
- They are not participating at international tourism fairs
- Sultanahmet travel agencies find their customers in Sultanahmet square. They are either do not know other marketing channels that they can reach the potential customer or they could not have effort to do it alone.
- Sector firms do not know how to use marketing channels. They are no serious contacts with foreign tour operators, travel agencies, journalists, writers, etc.
- Opportunities about direct marketing of internet has not known yet. For example, searching possible contact points from internet and reaching to target customers via e-mail was not tried until now.
- They are not participating at international tourism fairs
Usage of marketing channels will be developed by new trainings and usage of new tools such as internet in order to reach target customers
Marketing channels are not known
- Sultanahmet cluster participants have resource problem while using some marketing tools. For example they are not participating to international tourism fairs due to financial, human and time resource scarcity
- Sector members also did not follow the tourism fairs regularly.
- Sector members do not know how to find new adresses of potential customers
- Since the organizations are not working properly in tourism sector, they have not the capability of inserting power on potential marketing channels like newspapers, TV’s,etc.
- Sultanahmet cluster participants have resource problem while using some marketing tools. For example they are not participating to international tourism fairs due to financial, human and time resource scarcity
- Sector members also did not follow the tourism fairs regularly.
- Sector members do not know how to find new adresses of potential customers
- Since the organizations are not working properly in tourism sector, they have not the capability of inserting power on potential marketing channels like newspapers, TV’s,etc.
Cooperation for marketing within cluster will provide extra power to members
Sector members do not have power to use marketing channels
PROBLEMReaching the foreign tourists that is willing to pay more in their touristic activities
PROBLEMReaching the foreign tourists that is willing to pay more in their touristic activities
ANALYSIS1.Target customer definition is not clear2.Marketing channels are not known3.People do not have power to use channels
ANALYSIS1.Target customer definition is not clear2.Marketing channels are not known3.People do not have power to use channels
SOLUTIONS1.Decide about target customer together with cluster2.Give training about possible channels 3.Give training about how to use channels4.Web site will be developed5.Cooperation for marketing provide extra power to members
SOLUTIONS1.Decide about target customer together with cluster2.Give training about possible channels 3.Give training about how to use channels4.Web site will be developed5.Cooperation for marketing provide extra power to members
With the necessary trainings and the usage of internet facilities, Sultanahmet cluster members will be reaching their target customers
Reaching the Target Foreign Market
Questions and
Discussion
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