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Syria (Reuters) - Exploiting the acoustics of a free-standing Roman theater at Bosra in Syria, two French women serenade other tourists with an impromptu operatic medley.

Not to be outdone, a Syrian family perched on stone terraces high above the stage warbles Arabic songs to the beat of a drum.

The theater, wholly enclosed by an Arab fortress, is among many ancient sites that Syria can promote to develop tourism, already one of the brighter spots in its hard-pressed economy.

According to Tourism Minister Saadallah Agha al-Qalaa, the industry will generate 12 percent of gross domestic product (GDP) this year. It already accounts for 23 percent of Syria's hard currency earnings and provides 13 percent of its jobs.

He said tourist arrivals had jumped by a "spectacular" 1 million in the first four months over the same 2009 period.

"Of course we had some difficulties to provide the appropriate hotel capacity," he told Reuters in an interview.

International tourism earned Syria $5.2 billion in 2009, plus $1.5 billion from domestic tourism, 12 percent more than the previous year, despite a global recession which saw worldwide tourism receipts shrink 4 percent, Qalaa said.

Syria has fueled the tourism boom by removing visa requirements on visitors from Turkey and Iran. Busloads of Iranian pilgrims clog streets around Shi'ite shrines such as the gold-domed Sayyida Zeinab on the outskirts of Damascus.

Westerners are also discovering Syria, now shaking off the diplomatic isolation that followed the 2005 killing of Lebanese statesman Rafik al-Hariri. Damascus denied any responsibility.

European tourists are drawn by archaeological treasures such as the desert ruins of Palmyra or the old cities of Aleppo and Damascus, spruced up in recent years and now boasting dozens of boutique hotels and restaurants in restored courtyard houses.

BOUTIQUE HOTELS

Some of these lovingly refurbished hotels, targeting a wealthy clientele, say they are booked for up to a year ahead.

"People come because it is special," said Mayssa Rumman, manager of Beit Rumman, a six-room hotel in a 17th century house in the Old City of Damascus which her family bought in 2004.

"We will need another three or four years to break even," she said. "Everything here is custom-made and it takes time for people to do it, so you are investing time, money and effort."

New hotels are being built too slowly to cope with tourist numbers rising roughly 15 percent a year in the past decade.

"We still have a real challenge, with bottlenecks in high season, mainly in Damascus," said Qalaa, the tourism minister.

He said tourist projects under construction were worth $6.3 billion, compared to those in service worth $4.4 billion, but it would take time to complete them and train staff properly.

Syria now has only 52,000 beds in two- to five-star hotels and received 6 million tourists last year, although these included 3.5 million Arabs and a million Syrian expatriates, many of whom rent apartments or stay with relatives.

With oil resources dwindling and the effects of a severe 2008-09 drought still lingering, Syria certainly needs a healthy contribution from tourism if it is to meet its target of 5 percent GDP growth in each of the next five years.

One challenge is to diversify tourist development so that benefits are spread across Syria and not concentrated only in the best-known attractions, Qalaa said, listing new growth areas such as eco-tourism, health tourism and conferences.

Syrians, despite their government's political tensions with the West, tend to welcome tourists warmly. Alcohol is on sale in some places in the secular-ruled but conservative Muslim land.

Today the atmosphere in Syria is much less dour than it was in the first few decades of heavyhanded Baathist rule, but President Bashar al-Assad's economic reform efforts since 2000 have yet to be matched by any serious political relaxation.

Some state restrictions might surprise tourists, who find for example that they cannot access popular Internet sites such as Facebook and YouTube, which are blocked for security reasons.

Qalaa waved away the idea that this might bother anyone.

"I didn't receive any complaints," he said. "When tourists come to Syria, they let themselves fall into the magic of the Orient. They don't need to be back in everyday life."