Dollar slap for Turkey as the tourist season fizzles out


In the resort of Marmaris, nestled between turquoise water and pine-clad mountains on the southwest coast of Turkey, hotelier Mustafa Deliveli is preparing for a summer that he fears could bring the city’s tourism business to a standstill.

In June, one of the “most important months” of the season when rooms are usually full, reservations at Deliveli’s Emre Hotel are occupied at 15 percent, he said. But a spring coronavirus surge has caused Russia, Germany and the UK, Turkey’s three largest tourism markets, to impose onerous travel restrictions – a threat to a sector that provides millions of jobs and vital hard currencies.

“We’ve had our share of crises in tourism over the years, but that’s unprecedented,” said Deliveli, who has taken a third of his staff on leave and closed half of the hotel to cut costs. “We stayed afloat last year and had high hopes for this season. It was a big disappointment. “

A collapse in tourism would spread to the entire economy. Turkey relies on foreign currency inflows from visitors to finance its foreign debt and a current account deficit of 5 percent of gross domestic product, as well as to replenish depleted foreign exchange reserves to prop up a weak currency.

Tourist cash has become even more important since President Recep Tayyip Erdogan sacked the central bank governor in March, prompting foreign investors to sell Turkish stocks and bonds worth $ 1.8 billion net.

To attract visitors, Erdogan ordered a nationwide lockdown for most of the corn to help contain the pandemic. Most visitors are now exempt from performing PCR tests to detect the virus, and the government’s “Safe Tourism” program has prioritized vaccination of tourism staff and certified 10,000 hotels and other operators that adhere to strict hygiene standards. Covid-19 cases reported daily have fallen from a record 63,000 in April to around 6,000.

With 5,000 miles of coastline and speckled Greek and Roman ruins, Turkey was the sixth most-visited destination in the world before the coronavirus outbreak, attracting 52 million tourists and $ 35 billion in revenue in 2019, and revenue plummeting in 2020 year over year by almost 70 percent.

The Department of Tourism had targeted 30 million tourists and $ 23 billion in revenue in 2021, but that may already be out of reach with a third fewer tourists arriving in the first four months than in the same period last year.

“The pandemic caused a fluctuation in numbers” [but] Tourism retains its serious position in Turkey’s balance of payments and provides 2 million jobs, ”Tourism Minister Mehmet Nuri Ersoy told the FT.

Before the pandemic, tourism directly and indirectly accounted for 13 percent of GDP. Without a significant recovery this year, economic growth could be reduced by up to one percentage point in 2021, said Roger Kelly, an economist at the European Bank for Reconstruction and Development in Istanbul.

Tourism revenues also reduce Turkey’s trade deficit and underpin the lira, which has lost 14 percent of its value this year as concerns grew that Erdogan’s pressure on the central bank to cut rates spurred double-digit inflation.

“Life in Turkey would become so much easier when tourism picks up. If it doesn’t, it means another year of economic hardship, ”said Kelly. “It’s not a magic wand, but it would greatly ease the pressure on the Turkish economy.”

In Marmaris, nine out of ten hotels were closed at the end of May, Deliveli said. Most survived the 2020 collapse through borrowing or cutting costs, but “now is the time to pay and if things turn out like last year many operators will go bankrupt or be forced to sell,” he said .

Around 2.6 million Brits traveled to Turkey in 2019 and typically made up around half of Deliveli’s guests. He has not booked a single reservation from the UK this season as the UK government has required newcomers from the country to stay in a quarantine hotel and do a PCR test at their own expense. Erdogan has announced that he and Johnson will discuss tourism at a NATO summit next week, and he has also sent Ersoy to Moscow and Berlin to campaign for an end to their restrictions.

Germany, which sent 5 million tourists to Turkey in 2019, said returnees no longer need to be quarantined if they have been vaccinated or tested negative. Russia, Turkey’s largest source of tourists, has extended the ban on most flights between the two countries until June 21. “As soon as air traffic is resumed, Turkey will get a rush because the guests are not canceling reservations, but postponing them,” said Ersoy.

But Bahattin Yucel, a former tourism minister, said it was already too late to be “better than last year this season and we have to attribute that to the lack of success in dealing with the coronavirus”.

One recent afternoon, a handful of tourists roamed the sprawling ruins of Perge, a 3,000-year-old archaeological site once ruled by Alexander the Great and adorned with magnificent mosaics.

Ali Cikla has walked Perge’s old paths “thousands of times” during his four decades as a tour guide. He has only led five groups since the pandemic broke out, and his income has plummeted 90 percent. Still, he is confident that the mix of sun, sea and history in Turkey will prove irresistible.

“It may take a few years, but people will come back,” he said. “The pandemic won’t last forever, but Perge will.”


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