In 2013, nearly 3 million visitors came to Iraqi Kurdistan, a 30% increase from the previous year. In 2007, by comparison, Kurdistan’s General Board of Tourism (GBOT) recorded just 377, 397 visitors to the Region. The vast majority of travelers in the Kurdistan Region in recent years, around 66%, have come from elsewhere in Iraq, while locals engaging in internal tourism accounted for nearly 14%, and international visitors made up another 20% of travelers. Most of the foreigners that visit the region, in turn, do so for business reasons. Erbil dominates as a destination for international travelers, racking up nearly three times as many visits as either Slemani or Duhok in 2012.

Tourism is slowly beginning to play a larger role in the Kurdish economy. Overall, the industry supports more than 6,000 jobs. It was the source of $1 billion in revenues for the Kurdistan Region in 2013, a 53% increase over total tourist revenues in 2012 ($650 million). Since 2006, local and international investors have poured $6.58 billion into the Region’s tourism industry. Around 40% of that total has come from foreign investors, mainly those in the UAE and Turkey. In recent years, the pace of foreign investment appears to have increased. In 2013, Kurdistan’s tourism sector drew $3.2 billion in foreign investment.

Regional authorities have channeled these investments into at least 128 officially licensed projects in the tourism sector. Erbil has dominated tourism investments with 71 projects licensed since 2006 and a total investment of around $4.47 billion. The Duhok governorate was home to 41 licensed tourism investment projects valued at nearly $723 million over the same period. Although the Slemani governorate saw just 16 licensed tourism investment projects in that time, the total value of investment in the tourism sector there actually surpassed that of Duhok at $1.39 billion. One of the most visible tourism projects in Kurdistan this year was the newly opened Korek Mountain Resort and Spa, a $95 million venture that aims to draw winter sports enthusiasts from Iraq and across the Middle East to the Kurdistan Region. Another highly visible tourism development is the $2 billion Dukan Tourist City project, spearheaded by Emaar Properties of the UAE, which seeks to build a resort complex made up of hotels, restaurants, casinos, and residences on the shores of Lake Dukan near Slemani.

The regional government has also tried to spur development of Kurdistan’s tourism infrastructure through a program of small and medium-sized loans for 400 projects running through the year 2025. So far, the program has allocated around $86 million.

The KRG was hoping to build upon Kurdistan’s increasing prominence as a tourist destination over the course of 2014, but continued instability in the areas surrounding the Kurdistan Region have proven to be a formidable obstacle to this goal. Despite a promising start to the year, government officials have confirmed that tourist visits have decreased substantially. The majority of Kurdistan’s tourists in recent years have come from elsewhere in Iraq, and the instability surrounding ISIS-led advances in areas bordering Iraqi Kurdistan have made the journey by land to the Region dangerous. Likewise, international travelers conscious of regional political upheavals and security concerns seem to have shied away from visiting Kurdistan. The overall impact of regional strife on the tourism industry in 2014 and going forward remains to be seen.

New Frontiers

The KRG has ambitious plans to transform the Kurdistan Region into a top travel destination. The regional government hopes to attract 5 million tourists in 2015 and increase that number to 7 million by 2025. Officials seek to raise foreign investment in the sector to $4 billion in the near term to bolster Kurdistan’s international profile as a tourist destination and have laid out plans to improve Kurdistan’s road infrastructure to facilitate travel across the Region. Entrepreneurs aim to tap into a growing movement for “adventure tourism,” while KRG planners try to square the Region’s desire to attract more tourists with the protection of its natural resources.

Growing Recognition for Erbil

Erbil serves as the face of the Kurdistan Region for most international travelers. The city has grown at a breakneck pace over the last decade and its combination of history, security, and economic growth have been attracting attention across the Middle East. National Geographic Magazine named Erbil as one of its “Best Trips” of 2014. In addition, the Arab Council of Tourism chose Erbil as its “2014 Arab Tourism Capital,” and the city has held numerous public events throughout the year to mark the occasion. The first annual Erbil Film Festival took place this spring, showcasing over 70 films from around the world. The event attracted leading regional directors, actors, musicians, and writers as guests and judges for the festival’s awards. Other events marking Erbil’s turn as Tourism Capital included painting and photography exhibitions, concerts, and the ten-day-long Hawler Festival marking the Kurdish new year, Newroz.

Passenger numbers at Erbil International Airport (EIA) highlight a steadily increasing amount of international travel to the regional capital. Over the course of 2013, a record 1,193, 783 passengers passed through EIA, over 90% of whom were traveling internationally. Over the 2006-2013 period, passenger traffic into EIA increased at an average rate of 28.2% per annum.

The last year also saw the Region gain important international recognition and support for its cultural patrimony. Erbil’s landmark Citadel was officially added to UNESCO’s World Heritage List during a June meeting of the organization’s World Heritage Committee in Doha. Members voting in favor of World Heritage status for the structure cited its nearly 6,000 year history and its significance as one of the world’s oldest continually inhabited settlements. The Citadel joins three other Iraqi sites on the World Heritage List.

In an effort to preserve the Citadel, the High Commission for Erbil Citadel Revitalization (HCECR) has been formed to oversee a 15-year plan to refurbish and restore the Citadel itself, as well as the residential structures built atop it over time. According to HCECR officials, the Kurdistan Regional Government has spent $35 million on restoration and preservation efforts over the last three years. Regional officials are also evaluating the potential for public-private partnerships to finance ongoing and future preservation efforts.

Hospitality Industry

Kurdistan is now home to over 400 hotels, and $1 billion in private investment has been committed to further develop the regional hospitality sector. Erbil boasts Kurdistan’s two internationally certified five-star hotels, the Erbil Rotana and the Divan Hotel. International brands such as Radisson Blu, Sheraton, Kempinski, and Hilton have also set their sights on the Region.

Overall, however, the hospitality market in Kurdistan is dominated by three-star hotels. Much of the industry continues to function without an eye to international standards, and innovators in the sector are working to erase a stigma of sorts that has developed around the idea of working in hospitality. In the words of Erbil Rotana GM Ghassan Dalal, "The Kurdish community is not yet well exposed to the hospitality industry. There have been small hotels in the Region for quite a long time– unfortunately the reputation was not so good, so voices saying it was not such a great career grew within the Kurdish community."

This legacy is slowly being overcome as high-profile international hotels like Rotana and Divan strengthen programs to hire and train local talent for key roles in their business. Divan Erbil, for instance, has implemented a formal training program to prepare local employees for positions in hotel management as well as service-oriented positions in reception, housekeeping, and restaurants. Leaders in the Region’s hospitality industry have emphasized the importance of training to address a local skills gap and the development of English language skills in order for the Region to truly compete with the world’s top business and travel destinations.

The hospitality industry has been negatively impacted alongside the overall tourism sector in the Kurdistan Region in the wake of regional turmoil. Following ISIS-led violence outside the Kurdistan Region, occupancy rates at the Region’s leading hotels have significantly decreased. Historically, occupancy rates have averaged around 50%, increasing to 90% during times of peak demand.

Despite the array of challenges that recent regional upheaval and the corresponding economic slowdown have posed for Kurdistan’s hospitality sector, many in the industry are optimistic about the Region's medium-term potential. Ghassan Dalal is among those with a bullish attitude about the hospitality industry’s future, saying, “I believe that within the next year and for many years to come the growth of demand for hotels is going to be much higher. I believe the industry itself is going to at least double the amount of rooms currently in Erbil.”

At the end of a turbulent year for the Kurdistan Region, the underlying potential of the Region’s economy and the appeal of its relative success against the odds of an unsettled neighborhood continue to encourage cautious optimism for the long-term potential of Kurdistan’s nascent tourism and hospitality industries.