Rising costs and fewer visitors hit Turkey tourism

Unsplash/Samura Silva

• Affecting locals’ holiday plans
• High prices deters foreigners
• Cruise bookings on rise

Turkey’s tourism industry is contending with rising costs and a slowing of the domestic economy which is affecting the plans of local holidaymakers.

There are also concerns that high prices could hit foreign arrivals as the country sheds its reputation as a cheap holiday destination. 

Some parts of the industry are nonetheless enjoying a strong season. The Ministry of Culture and Tourism reported a 19 percent increase in arrivals in the cruise segment for the first half of the year, with 574,500 passengers landing, up from 482,900 in the same period last year. 

However, Turkey’s domestic market is reporting a downturn and there has been a drop-off in bookings and earnings. 

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Some regions are feeling the pinch more than others.

Bodrum on the Aegean coast has recorded a fall of 20 percent in bookings, while Antalya on Turkey’s south-east Mediterranean shore is posting a dip of 5 to 10 percent, according to Hakan Saatçioğlu, chairman of the board of directors of the Professional Hotel Managers Association.

“We are not saying tourism is having a very bad season,” Saatçioğlu told AGBI. “However, inflation is high and the increase in our staffing costs is 45 percent in euro terms.”

Turkey’s consumer price index rose 71.6 percent year on year in June, according to data from state statistics agency Turkstat. The annualised rise in costs in the hotels, cafes and restaurants segment was far higher, coming in at 90.7 percent. 

There has been a trend towards bookings in so-called “shoulder” periods before and after the peak summer season, Saatçioğlu said, as domestic holidaymakers cut short their vacations and seek to take advantage of discounts of up to 40 percent. 

“That is a change for local tourists, along with them shortening their period of stay due to the current economic condition,” he said. “Instead of staying seven to eight days they stay four to five.”

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It is not just the domestic segment that is going through a challenging period. Some budget-conscious foreign visitors are also looking elsewhere, according to Ramazan Bingöl, the president of the All Restaurants and Tourism Association (Türes).

“Unfortunately, Turkey has become an expensive country, which drives numbers of tourists away from us,” he said. “We have to break this perception that is posing us problems.”

One measure Türes is trying to promote is for the 30,000 businesses that come under its umbrella to apply a 10 percent price cut on their services. However, with high inflation and tight margins, many operators may struggle to comply. 

Another issue hitting the sector’s earnings is the government’s limiting movement in foreign currency exchange rates.

Although the lira has lost around 10 percent against key currencies this year, this fall suggests it will perform better than the 37 percent loss in value posted in 2023. This is not necessarily good news for those in the hospitality industry still coping with rising costs. 

“In Antalya we earn in foreign currency, so we used to absorb some of our costs from gains we made in conversion to the Turkish lira,” Saatçioğlu said.

“When the euro was going up our costs were dropping and that gave us some flexibility. It is hard to be flexible now.”