Ancient Istanbul grows into a beacon on the Bosporus

Maybe it's the warm glow of the purple floodlights pooling over the outdoor terrace at this former Ottoman Empire housing project. Or the distraction of the bikini-clad blonde tethered by her ankles to a Champagne-bottle-bedecked chandelier. Or merely the mellowness induced by raki mojitos poured by handsome young bartenders.

Whatever the cause, the crowd here looks fabulous.

It's the opening night party of the W Istanbul, and the city's Beautiful People have turned out in force to celebrate the debut of its newest, hippest hostelry.

The hotel is part of the stately Akaretler Row Houses, built by a 19th-century sultan to house his workers. Resurrected from ruin, it now boasts sleek storefronts bearing tony international brands — Marc Jacobs, Jimmy Choo, Alberta Ferretti — along with upscale private residences and, as its centerpiece, the ultra-hip W, the U.S. hotel chain's first European property, where rooms start at about $500 a night.

"Everyone said I was crazy buying in a rundown, devastated area," says developer Serdar Bilgili, smiling as he greets his guests.

In fact, Bilgili's enterprise is hardly the only one in this ancient city that is taking the old and making it new again.

Wallpaper, the magazine that scans the horizon for the Next Big Thing, last year dubbed Istanbul "best city" in a nod to its creative vibrancy and emergence as an "elegant party capital." A spate of hotels is poised to open, including a Four Seasons on Thursday in a splendid 19th-century palace on the Bosporus. A growing number of chic rooftop restaurants embrace views of ages-old icons — Hagia Sophia, the Blue Mosque and Süleymaniye Mosque.

The city's first modern-art museum took up residence just over three years ago in a converted waterfront warehouse and now draws 1,200 or so visitors daily.

A boom in shopping malls — almost 100 at last count — along with small shops and art galleries in posh neighborhoods such as Nisantasi, is honing Istanbul's image as a shopping mecca.

And though Turkey has yet to be admitted into the European Union, its major metropolis has been selected as the EU's European Capital of Culture in 2010.

Tourism is booming. More than 23 million international visitors came to Turkey in 2007, including a record number of Americans. Although their numbers are relatively small (650,000 last year), U.S. travelers are among the fastest-growing segment of foreign visitors.

(The U.S. State Department advises that the possibility of terrorist attacks from leftist or Islamic groups "remains high," but most violent incidents and demonstrations have thus far occurred in non-touristed areas).

And while Turkey ranks in the world's top 10 most-visited nations, it had been marketed primarily as a low-cost beach destination. But that, too, is changing, with a new emphasis on cultural tourism.

Some of the rise in Istanbul's touristic fortunes is a result of the growth in cruise-ship traffic. This time of year, floating behemoths jam the harbor, disgorging thousands of passengers into Sultanahmet, the city's old quarter and locale of most of its signature sites.

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