Turkey: does the weak lira help tourism?

Even tourists couldn’t miss it: in November, the price of a cappuccino in Istanbul’s Kadikoy district rose by 25 percent from one day to the next. The reason for this is the high inflation in the country, but prices remain cheap for tourists, as the Turkish lira experienced a nosedive last year. In September 2021, one US dollar was worth around eight Turkish lira, now around 18.

However, the depreciation of the Turkish currency has had a positive impact on the tourism industry, an important economic sector for Turkey. Before the pandemic, tourism accounted for 11 percent of gross domestic product and provided almost 2.3 million jobs, according to the international business association World Travel and Tourism Council.

The pandemic dealt a heavy blow to the industry, but this year it recovered – travel became possible again and the weak lira fueled tourism all the more.

A lot possible for little money

The Berlin jazz musician Lukas Growe also took the opportunity to travel to Turkey with his girlfriend. “We do things here that we wouldn’t otherwise be able to afford on vacation – we take a lot of taxis, go to restaurants and even fly within the country to get from one city to the next.” The two had planned a two-week vacation to Iran in October, but canceled at the last minute because of the protests in the country. Instead, they traveled to Turkey and explored the Kurdish areas there, hiked the southern coast and looked at Istanbul. “We even hired a taxi for a whole day, which we would never do in Germany,” says Growe.

Better value for money than other countries

“Tourism is generally very strong this year and of course we’re happy about that,” says tour guide and filmmaker Mustafa Efelti, who is offering tour after tour this season in a bid to recover losses during the pandemic. “We even had a lot of groups from Latin America – that’s unusual for us, even at this time of year.”

One of the reasons is the cheap lira, especially for travelers from countries with a weaker economy, confirms Efelti. “Tourists from Bulgaria or Romania, for example, can spend a really good week in Turkey for 530 euros ($550). In Paris, on the other hand, the money would only last for a few days.”

Citizens struggle with inflation

Although more tourists are coming again, the previously strong domestic tourism industry has been hit hard by the economic policy. For many citizens, the weak lira is devastating. According to the Turkish Statistics Institute, inflation rose by 85 percent in October. However, experts at independent inflation research group ENAG in Turkey say it is actually much higher, around 185 percent. According to a recent survey by the opinion research institute Yöneylem, more than two-thirds of people in Turkey find it difficult to pay for their groceries and rent.

A positive sign for 2023?

For tourists, the situation remains positive, although vacations in Turkey are becoming more expensive than in other countries due to the energy crisis and inflation, but still remain cheap in comparison. Turkey has long been an all-inclusive destination and will remain so, according to tour operator TUI. “The fall of the Turkish lira has made the country even more attractive for our guests who are looking for good value for money,” says TUI spokesman Evangelos Georgiou.

Turkey’s tourism industry revenue increased by 27.1 percent year-on-year to $17.95 billion in the third quarter, Turkey’s Statistics Institute recently announced. Still, it’s still well below the $34.5 billion the industry generated in 2019.

Inflation is a challenge for the industry, says Serdar Akaydi from the Turkish travel agency aQuasun Tourism. “Hotel prices, at least in my region of Antalya, will be between 15 percent and 25 percent higher next summer.” As airfares also rose, trips to Antalya would be more expensive than in the summer of 2022. “I wonder if tourists will still accept these prices then.” So far, however, the booking figures are looking good, according to Akaydin.

Obstacles for Russian tourists

Antalya has long been a popular destination for Russian tourists, but the war in Ukraine has meant far fewer Russian visitors this year. Turkey is allied with the US and NATO, but also has good relations with Russia – a fine line to walk. Turkey depends on Russia for energy, trade and tourism. In 2019, trade volume between the two countries reached $26.3 billion.

Since the end of September, the three Turkish central banks no longer accept the Russian payment system Mir, the Russian counterpart to Visa and Mastercard. The reason for this is the crackdown on countries that help Moscow circumvent sanctions.

Theoretically, the Mir lockdown could make vacationing in Turkey more difficult for Russian tourists, as they would have few payment options. However, Serdar Akaydin does not believe that this measure poses a serious problem for tourists. “Russians can still bring cash and even pay for some in bitcoin,” he says. “All-inclusive vacations are paid for before the trip anyway.” And the weak value of the lira does the rest.

Translated from English.