Istanbul // Each year, June marks the beginning of a three-month peak season for Turkey’s holiday resorts, which mostly boast of their quality service with competitive prices alongside some world-famous beaches.
Tourism is a critical source of income for the country but a recent wave of terror attacks exacerbated by domestic and regional political upheaval is taking a heavy toll on the sector.
Now the country is appealing to Arabian Gulf visitors to help to offset the slump in tourism numbers this year.
In an attempt to resurrect the industry, the head of the Hoteliers Federation of Turkey, Osman Ayık, has called on tourists from the Gulf to not hesitate visiting the country.
“There are relative declines in tourist numbers but we do not have any security concerns in Turkey’s tourism facilities following the attempted coup. … so friends from the Gulf and elsewhere should not be afraid, Mr Ayık tells The National.
Turkey’s intake of tourists from the Gulf region had in recent years surged amid promotion campaigns and helped by popular Turkish soap operas in the region. Visitors from the Gulf region were estimated to contribute as much as 6 per cent to Turkey’s annual average tourism revenue before this year.
In 2014, 582,698 Gulf tourists visited Turkey, a 42 per cent increase year-on-year and Saudi Arabia, Kuwait and the UAE were the three country’s in the region that sent the highest number of visitors. Tourists from the Gulf region mostly prefer Turkey for summer vacations, as well as medical treatment, and shopping and they spend more than double the average spent by foreign visitors in Turkey, ministry of tourism figures show.
It is a source of revenue that the sector and the country could really use right now.
An ongoing civil war on the doorstep and a months-long refugee influx from neighbouring Syria, sporadic ISIL terror attacks in some of the major Turkish cities and earlier political tension with Russia had already inflicted a blow on the country’s ailing tourism sector.
The total number of foreign tourists to Turkey in June dropped 40.9 per cent, the worst single monthly drop on record, the ministry said last week. June was the 11th straight month to see a decline in number of tourists.
Overall, Turkey foreign tourist arrivals in the first half of 2016 dropped to 10.7 million, a 27.8 per cent decline when compared to the same period of 2015 with Russian tourist arrivals plunging by 88 per cent, the same ministry data revealed.
June saw a car bomb attack that targeted a military convoy in central Ankara and a bloody attack at Istanbul’s Atatürk Airport killed 40. These two were followed by a failed coup attempt on July 15, only to further fuel tension.
“Turkish tourism industry has never seen such a bad introduction to its peak summer season and it is too late to compensate for losses so far this year … following months may be even worse in terms of tourist numbers and revenues,” argues the economist Emre Deliveli.
“We already had a number of bookings cancelled by local and foreign visitors and the coup attempt was the last nail in the coffin for an already ailing tourism sector, adds Mr Deliveli, who also runs a hotel in the Aegean tourist hub of Marmaris.
Following the failed coup, Turkey declared a state of emergency that will last through October and cancelled all vacations and leave for its 3.4 million civil servants indefinitely. This, observers say, means another setback for hundreds of Turkish tourism facilities that had pinned their hopes on domestic travellers to keep the lights on.
The Turkish prime minister Binali Yıldırım said last week that the government would lift the ban on civil servant leave “within two – to three weeks”.
Even more worrying is an anticipated trend for the decline in tourism figures to accelerate. The ministry of tourism said tourist number could further fall by 6 per cent per each month to follow June. This would mean a 47 per cent decline in July and 53 per cent in August.
Such losses are quite likely, say experts, considering the failed coup alone resulted in temporary airport closures along with booking cancellations.
The Turkish tourism industry is one of the primary engines of its GDP. According to the tourism department, the sector generated US$35.1 billion in revenues in 2015.
This year, however, that revenue is estimated to drop by as much as $10bn, more than 1 per cent of the GDP. This makes tourism even more important considering the country’s current account deficit in 2015 stood at $32bn, 4.5 per cent of GDP, the department says.
“A slump in tourism due to Russian sanctions and security related issues exacerbated the negative merchandise trade developments,” the World bank said on July 15. The bank estimated that Turkish economic growth will average at 3.5 per cent for 2016.
According to World Travel & Tourism Council data last year, tourism revenues – including income brought by businesses such as hotels, travel agents, airlines and other passenger transportation services – contributed $27.5bn to Turkey’s economy in 2014, equal to 4.1 per cent of total GDP.
Tourism created 580,000 jobs directly in 2014, 2.2 per cent of total employment and accounted for 915,000 jobs in 2025, the same report estimated.
“Tourism’s contribution to Turkish economic growth is about 0.2 per cent, according to OECD figures and this is a critical amount considering an anticipated slowdown in economic growth,” says Seyfettin Gursel, the director at the Istanbul-based economic think-tank BETAM.
Overall, tourists in Turkey spent $3.56bn less in the first half of 2016 over the same period of the preceding year. In the second quarter of 2016, the amount spent per tourist in Turkey was cut by almost half on a year ago. On average a tourist spent $665 during their stay in Turkey in the second quarter of 2016; this figure was $719 in the same period of 2015.
Turkey receives approximately 77 per cent of its foreign tourism revenues from non-Turkish visitors, while the remaining 23 per cent is from Turks who live abroad and prefer their home country during vacation.
According to the Mediterranean Touristic Hotels Association chairman Yusuf Hacısüleyman, Turkey is estimated to host 6 million fewer tourists this year, resulting in a loss of revenue of almost $10 million compared with 2015.
However, he says the association does not expect facilities go bankrupt, following a recent agreement between Turkish lenders and local hotels that eased the standards for the latter to pay their bank loan debts.
He does see some hope on the horizon.
“Charter flights with Russia resumed and gradually will come back to normal but we need some more time for that. We also expect visitors from the Gulf region to continue planning their vacations in Turkey,” Mr Hacısüleyman says.
The chairman of the Travel Agencies Association of Turkey (TÜRSAB) Baaran Ulusoy, however, says that while it is too late for Turkey to avoid heavy losses in tourism this year, recent political rapprochement with Russia and other countries in the surrounding region should benefit the sector in the years to come.
He agrees that there is less risk of tourism-related businesses going to the wall as foreign visitor numbers collapse this year with the arrival of an anticipated government incentive package that includes tax benefits, restructuring of loans and social security premium debts to the state.
But, in the short term, he says, the Turkish tourism sector must look to its own.
“We can only work to minimise losses by improving domestic tourism,” Mr Ulusoy says.
“An approaching 9-day official holiday that will mark the Eid Al Adha in September will help ease the pain to some extent.”
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