SUNNY DAYS AHEAD

Turkey 2020 | TOURISM | VIP INTERVIEW

TBY talks to Mete Vardar, Chairman of Jolly, on the new Istanbul Airport, domestic tourism, and technology.

Turkey's tourism industry has always benefited from its location between the European and Asian markets, but only recently has come to benefit from the opening of the new Istanbul Airport. What impact will this have on the tourism industry?

Almost 98% of visitors who come to Turkey come here by plane from foreign countries. The first phase of the new Istanbul Airport has opened, and when it is fully completed in 2023 it will have an annual capacity of 200 million people. This is important especially for the passengers arriving in transit from abroad. Besides that, our national airline, Turkish Airlines, and the other airlines will develop new routes. With this, Turkish guests will have the opportunity for flights to the destinations all around the world. Turkish Airlines started to go to Cuba this year and a route to Mexico is going to start. Similarly, new routes to Vietnam and Thailand are opening. This is important because of the tourism potential of Turkey, and also the potential for business travel. The timing of the airport's opening is excellent. In 2016 and 2017, there were negative effects because of political and terrorism-related reasons, especially in tourism mobility. However, in 2018 and 2019, the numbers have been good. In 2019, we had a goal of 40 million tourists and USD40 billion worth of tourism. By 2023, this could have been 50 million tourists and USD50 billion, but now we are expecting 75 million tourists and USD75 billion. If we can reach this goal, we will be the fifth or sixth top tourism destination in the world. In this sense, the airport is important. It helps Turkey to reach its potential.

How has Jolly kept pace with tourism growth in Turkey?

Jolly is a company with 33 years of experience in Turkey tourism industry. We have operations in leisure, business travel and MICE. We have been working with both local and global suppliers to enable Turkish tourist to travel around the world. All business units have recorded strong healthy growth in last 10 years. This ongoing trend has bloomed with Goldman Sachs' investment in our company. Goldman Sachs first invested in Jolly in 2015, and it chose to buy a second stake with us in November 2018. Now, we have a foreign investor within our company. They have minor shares, and the management is still done by the Vardar family.

How has Goldman Sach's investment allowed Jolly to expand outside of Turkey?

This was an important step for us, turning the Jolly brand into an international tourism company. We want to contribute to Turkey's tourism sector. The first step for us was to change the whole technological infrastructure of our company. After 3 years of hard work, we have developed our own ERP system which also has been funded by Goldman Sachs. We have made an important start in our short-, medium-, and long-term plans. After a full deployment in Turkey, we are planning to export this technology around the globe as well. On the other hand, we will work on expanding our outbound operations in key markets. With our previous partners with Germany's Öger Tour and Russia's Moss Tour, we have brought 2,6 million tourists to Turkey in 90s. Now we will start our incoming business again.

How will this strategy change impact your customer profile?

As Jolly, we annually serve around 1 million Turkish tourists. 80% of this is inbound and 20% of it is outgoing tourism. As I mentioned before, we have reached a very important point in our future strategy. In this new period following Goldman Sachs's second investment, we have made our goal to work our brand in foreign countries too, starting now in 2019. We will sell our local contracted hotels to the providers in foreign countries within our system. We are the biggest operator in Anatolian tours. We have Black Sea Tours, Gap Tours, Aegean Tours, and Mediterranean Tours for our domestic guests. Now our goal is to take our international guests, especially European guests, on the Anatolian Tours with our 33 years of experience. Last but not least, another focus area for us will be MICE. We are currently serving more than 300 companies in organizing meetings, business trips or congress. We will also start providing this service to foreign companies.

Across Jolly's products, where do you see the most revenue growth and profitability right now?

In our package tours, individual hotels, airplane tickets, and all the other tourism products, price is the most important variable. No matter how strong your brand is, you have to offer a better price as well. Our most important two products in volume are flight tickets and hotel accommodation, and we have identified the hotel segment as an area of focus for us. Airlines already offer their guests better prices on their web sites and often charge no service fees; hence, profitability for us is much lower compared to the hotels. We are trying to increase our profitability in hotels. In 2019, our goal is to get 7,000 hotels in Turkey on our website. We created an extra net for this. Hotels on our own site define their own prices, their capacity, and their programs. We used to make contracts and then entered them into our system, but now we give hotels their own platform for this.

What untapped potential do you see in the domestic market, and how is Jolly working to capture the domestic market's growth?

The main goal here is finding people who are just beginning to travel. There are 82 million citizens living in Turkey, but right now only 8 million of these travel through travel agencies. That 10% is a low number. As Jolly, we are now creating a marketing campaign to bring our services to the people in the rest of Turkey, not only in large cities. We have positioned this campaign to show people that they are not just purchasing a holiday. Each dollar spent on tourism has an important impact on the country. In fact, 30 years ago, Jolly took its first guests to the Black Sea. The owner of the vehicle we used has now become the owner of the biggest bus rental company there. We took our guests to Antakya. A person working in a shop that sold pişmaniye on the road has become the owner of the largest local food shop in Antakya. We are also creating a very passionate network that works for Turkish tourism. For instance, the son of a local Vendor in Diyarbakır is now working as a guide in Anatolia tours and his family is operating a guest house where they exhibit their local traditions and lifestyle. We created those memories and turned them into a major marketing campaign that reached to 25 million guests with 32 videos on TV channels, cinemas, newspaper ads, YouTube, and the internet.

How has Jolly changed its operations and strategy to adapt to changes in technology and how people book vacations?

If you cannot fulfill the requirements of the customer, you cannot be competitive. Thus, technology is important. We established a technology company named Gordion technologies in 2012. Goldman Sachs became a partner to this company too. They saw a vision there, and after their second investment November 2018 we changed the whole technological infrastructure. So, in terms of what we call end-to-end tourism mobility, we can carry out operations with a technology program from the first purchase of the guest to the last point. In this new period, thanks to our technological infrastructure, our guests will buy their concert tickets in their destination over our system, they will be able to purchase train tickets, make reservations in any restaurant they like, they will be able to buy match tickets in the coming year. We have a lot of ideas and plans. We will realize all of them in the new era.