Turkey’s weak lira affects the tourism industry | Trip

In the Istanbul Kadikoy neighborhood, even a tourist cannot help but notice that the price of a cappuccino has risen 25% from one November morning to the next due to the country’s high inflation. But it’s still affordable for many foreign tourists, considering that the Turkish lira has plummeted in the past year. In September 2021, $1 was worth around 8 Turkish liras, and now it’s worth around 18. (Also read | Why India Should Be On Your 2023 Travel Bucket List)

However, the collapse of the lira has had, in part, a positive impact on the tourism industry. An important sector in Turkey, tourism accounted for 11% of GDP before the pandemicand almost 2.3 million jobs according to the World Travel and Tourism Council.

the coronavirus The pandemic hit the industry hard, but by the summer of 2022, tourists were back in Turkey and the weak lira was, and still is, another draw for many travelers.

little luxuries

For jazz musician Lukas Growe of Berlin, the weak lira meant he and his girlfriend could worry less about how they spent their money. “We’re doing things that we normally wouldn’t have done on vacation,” he told DW. “Taking taxis often, going out to eat, even taking internal flights just to go to another city.” The couple had planned a two-week trip to Iran in October, but canceled at the last minute, feeling the timing was not right in light. of protests in the country. Instead they went to Turkeytravel to the Kurdish regions, walk along the southern coast and explore Istanbul.

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“We even hired a taxi for a day to take us to other places, something I would never do in Germany,” Growe explained.

Better value than Paris

“Tourism is very strong this year in general, and we are very happy about this,” says freelance tour guide and filmmaker Mustafa Efelti, who has been leading tours almost non-stop this season, making up for the lack of work during the pandemic. . “We are very happy with this and we also have a lot of tours in Latin America, even in November, it is unusual for us.”

In the end, the weak lira has helped attract tourists, especially from countries with weaker economies than northern Europe, Efelti says. “Many people, for example, from Bulgaria or Romania, where the economy is not very strong, can spend a very good week in Turkey with €530 ($550), for example. In Paris, it may only last a couple of days. “

Citizens struggle under inflation

However, the once strong national tourism industry has been hit hard by the economic policies of Turkish President Recep Tayyip Erdogan. For many who live in Turkey, the weak lira is devastating. Inflation is at its highest point in 24 years, 85% higher than in October 2021, according to the Turkish Statistical Institute. But experts from the Independent Research Group in Turkey say it’s actually much higher, around 185%.

According to a recent survey by the Yoneylem Center for Social Research, more than two-thirds of people in Turkey have difficulty paying for food and, as a result, paying rent.

A positive sign for 2023

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Most tourists will take their vacations unaware of the economic crisis. Turkey has long been a popular all-inclusive holiday destination and, according to German travel operator TUI, this is unlikely to change, despite challenges facing the global travel industry, including high energy and fuel costs in Europe, partly caused by the war in Ukraine.

“The devaluation of the Turkish lira makes the destination even more attractive for our guests who are looking for value for money,” said TUI spokesman Evangelos Georgiou. The country’s tourism receipts rose 27.1% from a year earlier to $17.95 billion in the third quarter, according to recent data from the Turkish Statistical Institute. However, they are still well short of the $34.5 billion the industry earned in 2019.

In the coastal city of Antalya, a popular destination for Russian tourists, Serdar Akaydin, managing partner of aQuasun Tourism AG, points to the challenges of rising costs for businesses like hotels in light of inflation. “For next year, at least for my Antalya region, hotel prices for next summer are 15-25% higher.” With rising airfare prices, travel to Antalya will also become more expensive than in the summer of 2022, he predicts.

“The big question is whether tourists will accept these prices.” While it’s too early to tell, Akaydin says the booking numbers are already looking good.

Barriers for Russian tourists?

Politics is also at stake when it comes to tourism. The war in the Ukraine has meant far fewer Russian visitors this year. With Turkey’s strategic position as a US and NATO ally and a friend of Russian President Vladimir Putin, the Turkish government walks a fine line in keeping both sides happy. Turkey depends on Russia for energy and trade, as well as tourism. In 2019, the trade volume between the two countries reached 26.3 billion dollars (25.07 billion euros).

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At the end of September, Turkey’s three central banks stopped accepting Russia’s Mir payment system, the Russian equivalent of Visa and Mastercard. It was the result of the US crackdown on countries accused of helping Moscow circumvent sanctions in light of increasing economic ties between the two countries.

In theory, the removal of Mir could make it more difficult for Russian tourists to vacation in Turkey, as they would have few payment options. However, Serdar Akaydin does not believe that he has acted as a serious deterrent. “Russian tourists can still bring cash and even pay for some transactions in Bitcoin,” he says. “All-inclusive vacations are also purchased and paid for in advance of the trip anyway.”

The low value of the lira also helps make such trips possible.