‘Now in ruins’: Turkey’s tourism revival fades over Russian war | Russo-Ukrainian War
Istanbul, Turkey – Despite the arrival of many Russian dissidents and young professionals in Turkey after the Russian invasion of Ukraine, the ongoing war is expected to lead to a massive drop in the number of Russian tourists coming here this year.
The executive director of the Association of Tour Operators of Russia, Maya Lomidze, told the Dunya newspaper earlier this month that she could not give an estimate of the number of Russians who will visit Turkey in 2022, two million would be considered a good number. This would mark a sharp drop from 2021, when 4.7 million Russians entered Turkey.
Reports from earlier this year said the Russians had saved Turkey’s tourism industry in 2021 after trying to bounce back from the first year of the coronavirus pandemic. Russians topped the list of nationalities who visited Turkey between January and November last year.
The resorts of the province of Antalya, on the Mediterranean coast, are particularly popular with Russian tourists. During the same period, 37% of all foreign visitors entered Turkey via Antalya, compared to 34% who arrived in Istanbul.
Volkan Yorulmaz, chairman of Antalya’s Kemer Promotion Foundation, told the Haberler news site that the projected numbers would pose a problem for the region’s tourism sector.
Yorulmaz said two million Russian tourists would not be enough given that at the end of last year he expected six million Russians to vacation in Turkey throughout 2022.
“Belly in the air” tourist facilities
Economists say the revised estimates could be too high.
“First, even two million Russian tourists might be overly optimistic given the massive decline in Russian purchasing power and the growing difficulties for Russians to access credit cards,” said Global Source analyst Attila Yesilada. Partners, to Al Jazeera.
“My calculation assumes that there are no Ukrainian tourists and a small number of Russians could cost Turkey $3-4 billion in tourism revenue.”
“The loss of jobs and added value will be significant. In other words, each tourist generates about three temporary jobs and each tourism dollar generates up to $2.50 in revenue for the industries that supply tourist resorts. Finally, after two bad seasons, many tourist structures mainly welcoming Ukrainian and Russian tourists could go bankrupt, defaulting on their outstanding bank loans. I cannot estimate the magnitude of this particular problem,” Yesilada added.
In 2019, before the pandemic hit, seven million Russians visited Turkey, while 1.5 million Ukrainians visited the country that year. As one of the most visited countries in the world, Turkey’s economy relies on its robust tourism sector.
“In an average season, Turkey generates about $25 billion in net foreign exchange earnings from tourism, which covers half of the $50 billion average trade deficit. This year, tourism revenues are significant by two orders of magnitude. First, due to energy and food imports, Turkey’s current account deficit is expected to rise to $40-45 billion, or $25 billion more than in 2021. Second, the German economy is expected to slow rapidly in During the year, export growth could be below expectations,” Yesilada explained.
Galloping inflation, pound in trouble
Masha is a Russian citizen who has lived in Istanbul for years. Part of her family lives in Ukraine, the other in Russia, where she is now afraid to go due to the political atmosphere. The pandemic has made reunions difficult while the current situation has only made matters worse.
“Last year my whole Russian family came to Turkey and we met in [the Antalya resort town of] Kaş and we rented a villa. There were 10 of us and we didn’t want to stay in a hotel because of the pandemic,” Masha told Al Jazeera.
This year, the family intended to meet in Russia, but the plans were abandoned due to the war.
“I was on the phone with my uncle talking about options for this summer and Turkey is one of the only viable options again. It’s basically the only place we can meet but it’s complicated because flights are incredibly expensive, like four times more expensive than last year. And financially my family in Russia is not in the best position at the moment,” Masha said, adding that other travel plans in family in Turkey had also been disturbed.
Meanwhile, the fall in tourism and the resulting loss of billions of dollars in revenue is expected to significantly affect the Turkish economy even after the season ends, heralding more bad news amid runaway inflation. and the Turkish lira at half mast.
“The government planned to fix the exchange rate until the summer via administrative measures, such as the exchange-protected lira deposit system and the 40% redemption requirement for exporters. By summer, buoyant tourism receipts and lower energy prices would have increased the supply of dollars, allowing the lira to take a firmer footing for the rest of the year,” Yesilada said. .
“That plan is now in shambles. I calculate that Ankara needs to find up to $20 billion in external funding to defend the lira for the rest of the year. If this sum cannot be guaranteed, monetary restrictions are an important possibility.