Weak lira boosts Turkey’s tourist appeal

Antalya, a resort town on Turkey’s Turquoise Coast, is thronged with tourists on a hot and sunny August afternoon. Men dressed in Ottoman costume entertain visitors with twists and twirls of ice cream cones, while an armada of taxis and coaches snake through the historic city’s streets.

Turkey’s $900bn economy is in the throes of an economic crisis. But its vast tourism industry is proving a bright spot, with income from the sector hitting its highest level in more than a decade.

Cash-strapped holidaymakers, who have seen soaring costs for everyday essentials like food and energy costs hit their living standards at home, have headed here on the hunt for a bargain.

While inflation has soared in Turkey too, the weak lira, which is trading close to record lows against major currencies, has made the destination relatively cheap.

“For those on the lookout for more affordable travel experiences, Turkey fits the bill,” said Eduardo Santander, European Travel Commission executive director.

The lira’s fall against the euro — it is down 40 per cent over the past year — means the country can now compete with traditionally inexpensive European destinations, such as Portugal, despite Turkish consumer prices rising almost 50 per cent over the past year.

“You cannot eat for less than €7 or €8 in Paris, while here it is €3,” said Emmanuel, a French tourist who travelled to Antalya before making a trip north to Istanbul.

More than 22mn people visited Turkey in the first six months of 2023, up from 18.4mn in 2022, according to the Turkish Statistical Institute. Tourism income hit nearly $22bn in the same six-month period in 2023, the highest level on records going back to 2012.

The strong figures come as welcome news to the Turkish government, which is hoping a good tourism season will help narrow a record current account deficit.

Official data shows the average visitor spent 8.4 nights in Turkey in the April to June quarter, the lowest level for that period since 2015 © Fatih Hepokur/Anadolu Agency/Getty Images

However, businesses said visitors were less willing to spend once they arrived. High Turkish inflation has also forced them to put their prices up, with fewer bargains to be found for cost-conscious travellers.

Ünsal Turan, sales manager at jewellery store Dream Jewels, which is located down the coast from Antalya, said this summer was “not going brilliantly”. Another retailer who asked not to be named said trading this year had been “very bad”.

The average visitor spent 8.4 nights in Turkey in the April to June quarter, the lowest level for that period since 2015, Turkstat data show.

They also prefer all-inclusive resorts, according to Steve Heapy, chief executive of Jet2, the UK’s biggest package holiday provider. “Some guests take very little money with them because everything is paid for,” said Heapy.

The popularity of such deals was on display at the sprawling 600-room all-inclusive Adalya Elite Lara resort about a 40 minute drive along the Mediterranean coast from downtown Antalya.

Dozens of sun-tanned holiday goers stood in line for milky iced coffees, lemonade and neon-hued apple drinks at huts dotting the hotel’s pool area and on a harbour that juts out into the sea.

Nahit Kara, director of operations for the wider Adalya Hotel group, said the resort was full to about 97 per cent capacity in July.

Even so, he said 2023 had not been an easy year as the earthquake in February that ravaged several hundred kilometres east of Antalya put off crucial early bookings.

An unusually chilly May sent some potential customers flocking to other destinations, while big minimum wage increases put in place before the presidential election have also sharply increased the hotel’s labour costs, which account for about 40 per cent of overall expenses. Room prices have had to increase 20 per cent in euro terms to keep up with rising costs. Nationally, prices for hotels and restaurants are up 83 per cent in July in lira terms from the same month in the previous year.

The need to put up prices has meant more affordable resorts such as Adalya are performing better than the likes of Calista Luxury Resort, an upscale enclave featuring plush golf courses that once welcomed Barack Obama during a G20 summit.

Calista is running at just 60 per cent of its capacity this summer as last year’s influx of Russian customers are reeling from a currency crisis of their own — the rouble has fallen 40 per cent against the euro over the past year. The resort charges in the single currency to protect itself from the lira’s fluctuations.

Many Russians have also bought vacation homes and villas in Turkey, reducing the need for hotels, while other destinations in the Middle East and Asia have thrown open their doors to them.

Gürsel Kaya, the Calista resort’s sales and marketing director, said wealthy tourists from other areas are also tapped out after a big post-pandemic spending binge. “This year is very, very difficult,” he said. “Even next year is not going to be easy.” At the Adalya Lara, Kara is more hopeful. “We’re going to have good business.”