Tourism in emerging markets faces slow recovery from virus wipe-out: IIF

The coronavirus crisis decimated tourism in developing countries such as the Dominican Republic, Turkey, Vietnam and Cambodia in the first half of the year, battering a sector vital to many developing economies, high frequency data showed.

Countries around the world shuttered their economies and imposed travel restrictions earlier this year to halt the spread of the coronavirus which has killed more than 578,000 people.

“COVID-19 and the lockdown measures introduced to address the public health crisis present an unprecedented challenge, as an almost complete collapse of international travel and tourism has taken place since late in 2020 Q1,” Elina Ribakova, deputy chief economist at the Institute of International Finance (IIF) said in a report on Wednesday.

Tourist arrivals tumbled by nearly 100% in the Dominican Republic and Turkey in May, while Vietnam suffered a similar wipe-out in June and Cambodia in April, the IIF report found.

Smaller countries such as Cambodia, Georgia or Croatia felt the hit especially keenly, as international tourism receipts account for more than a fifth of their gross domestic product, the IIF said.

For a graphic on IIF tourism:

While many countries have begun emerging from lockdown in recent weeks, a recovery of tourism might be some time off and gradual as travel restrictions remain in place in more than 150 countries.

Many airline fleets are largely grounded and cruises effectively shut down in many places. Furthermore, consumer behaviour has changed in the wake of the pandemic, the IIF said.

A baseline scenario which predicts a gradual recovery with international arrivals reaching half of last year’s total by the end of 2020 would still translate into a decline of two-thirds over the year.

“A full recovery will likely take more than two years, and a second wave of lockdowns in tourist-generating countries could make matters worse,” Ribakova said.

(Reporting by Karin Strohecker; Editing by Catherine Evans)

Good news from Russia

Ankara and Moscow have agreed to resume flights between the two countries as of Wednesday following three and a half months of suspension due to the coronavirus outbreak, in a decision highly sought by the Turkish tourism industry.

“We have agreed to resume flights with Russia as of today,” Transport and Infrastructure Minister Adil Karaismailoğlu said Wednesday.

The world’s sixth-largest tourist destination, Turkey opened its borders and resumed international flights on June 11 as it gradually eased coronavirus lockdown measures. Prior to epidemic, Turkey projected over 5 million tourists from Russia.

EU expected to make a decision within two weeks about lifting quarantines to citizens visiting Turkey, while Iran decried Turkey’s offering of package tours to Iran before flights without authorisation, in a move that is unlawful, said the spokesperson of Iran Civil Aviation Organization.   The two regions send roughly 7 million tourists to Turkey.

According to columnist Erdal Sağlam of Cumhuriyet, who covers economy and the Ankarea beat, tourism experts claim it will be difficult even to reach 50% of the $30 bn Turkey received from external tourism in 2019, while rising NPL of the sector augur a bankruptcy wave in winter.

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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and and has contributed to the financial daily Referans and the liberal daily Radikal.