At breakfast, the waiters in the restaurant can barely keep up. All around French, German, English and Arabic spoken by Libyans escaping uncertainty in their own country, can be heard amid the chatter.

After a year of revolutionary turmoil that saw tourists flee the Mediterranean hotspot in droves, Tunisia hopes 2012 will mark the start of the recovery in a sector that used to account for almost 7 percent of gross domestic product and employs 500,000 people, second only to the farming sector.

"I heard a lot about the turmoil in the security situation but the reality is completely different because it is safe. We stay out late every night and nothing scares us," said Monica, a French tourist, who has visited Tunisia many times before. She did not wish to give her full name.

"I'm here with my friend this time but in the summer I will come back with the family and I will tell everyone that Tunisia has not changed. It is even more charming than before."

In 2011 fewer than 5 million people visited the country that witnessed the start of the Arab Spring, when a revolution ousted veteran dictator Zine al-Abidine Ben Ali in January 2011, sparking a wave of uprisings across the region.

Visitor numbers were down from 7 million in 2010 while tourism income, Tunisia's top source of foreign currency, fell by a third in 2011, or 1 billion Tunisian dinars. Twenty five hotels closed, costing 3,500 jobs.

This year, the sector hopes to recover half its losses, attracting 6 million visitors and raking in 500 million dinars more than last year for its depleted coffers.

While the North African country has made a relatively smooth transition to democracy, last year's war in neighbouring Libya pushed tens of thousands of refugees across the border, raising fears the conflict would spill over and delay economic recovery.

Occasional protests and lingering fears that Ennahda, the moderate Islamist party that won the first post-uprising elections in October, would seek to Islamise society, have also held back tourists, as has the economic crisis in Europe.

The five-star Radisson Blu on Djerba, which attracted 1.2 million visitors before the uprising, boasted occupancy in excess of 75 percent in 2010, a record year. This year, Sami Ounalli, sales and marketing manager of Djerba's Park Inn and Radisson Blu, hopes it can regain 90 percent of lost business.

"We expected tourism to return in April/May 2011. It was possible but when tourists travel they think of security, and the Libyan revolution and the refugee camps slowed recovery," he said. The new government, caught up in political wrangling over the role of Islam in the constitution, had also been slow to reassure visitors, he said.

"In the first four months of 2012, we see tourism in Djerba up 200 percent on 2011, but that was a low base. We are 20 percent from achieving 2010 levels ... In 2013, we hope to equal or exceed 2010 levels, as Djerba has a lot to offer."

ISLAMISTS SEEK TO REASSURE

Tunisia's economy is relatively small - gross domestic product is about the same size as that of the Dominican Republic. But it could be a bellwether for how bigger non-oil-based economies will fare in recovering from the Arab Spring, particularly Egypt.

Tourism arrivals jumped 53 percent in the first quarter from the same period last year. That compares with a 28 percent decline in January arrivals to Egypt, where presidential elections will take place next month, more than a year after the ouster of Hosni Mubarak.

With Islamists winning more than two-thirds of seats in Egypt's new parliament, and one conservative suggesting the pyramids be covered up, tour agents await calm and clarity.

By contrast, Tunisia's new Islamist-led government has been at pains to assure visitors the country is open for business after the turmoil saw the economy shrink 1.8 percent and unemployment soar from 13 to 18 percent last year.

"We will respect the traditions of our visitors in their food and clothing and lifestyle," Prime Minister Hamadi Jebali told reporters at a Mediterranean tourism conference this month, co-hosted by the United Nations tourism body.

The event, held in a casino and other locations overlooking bikini-clad tourists on the beach and with alcohol flowing freely, sent a clear message: the Islamist-led government would not ban alcohol or impose dress restrictions on visitors as many people, Tunisian and foreign, had initially feared.

"Some want to paint Tunisia as a jungle and sow fear of the Ennahda government, but this does not reflect reality," Jebali said.

Even for visitors from Libya, who made up a major chunk of tourists in Tunisia in the first quarter, their laid-back neighbour offers a respite not only from instability but from a country where alcohol is banned and leisure facilities scarce.

"They say there are no tourists but the hotels are busy," said one Tunisian woman on her way to a job interview at a Djerba spa. "They are hiring for the season, even if you lack experience."

LOOKING BEYOND THE COAST

But while the pick-up in tourism is an encouraging sign, the outlook is uncertain. Visitors from the euro zone, who before the revolution formed the bulk of tourists in Tunisia, have seen their spending power strained by the region's debt crisis.

A revival in tourism moreover will only help the coastal resorts, already the more prosperous areas of the country. It will do little for the central towns where there is little industry and unemployment is high and where riots still break out regularly.

The finance ministry forecasts Tunisia's economy grew 2.2 percent in the first quarter of this year, a huge improvement on last year but below the 3.5 percent growth it is targeting for the year.

To boost tourism's economic role the government acknowledges it must diversify from beach tourism that draws the budget-conscious and attract long-haul visitors from Asia and America.

It is also seeking to entice cultural tourists to its Roman amphitheatre at El Jem, to Tunis' meandering old quarter and the mosaic museum at Bardo, and aims to develop tourism in its central desert, whose subterranean dwellings and bleak landscapes featured in the Star Wars films.

Such initiatives could help spread tourist revenues to the poorer central regions which were first to rise up in protest against unemployment and political repression in a country that until last year was a police state.

Even the revolution itself is being seen as an attraction, with the government planning to set up a tourist trail through the central towns where the uprising began, leading to Tunis' Habib Bourguiba Avenue and old town - the scene of some of last year's protest flashpoints.

"I really feel something has changed in Tunisia. I feel more relaxed than I did during my previous two visits," said French tourist Karen, not wishing to give her full name, on her way to the thalasso at Djerba's Park Inn.

"Now you can hear shopkeepers and friends discussing and criticising their president and government with comfort ... On my next visit I will try to go to other areas, perhaps Monastir or Hammamet. Everything encourages me to return here."

(Writing by Lin Noueihed; Editing by Susan Fenton)

• A Permanent Economic Emergency