The number of foreigners arriving in Turkey hit a 21-month high in July in a major rebound for one of the country’s most critical industries, bolstered by the gradual easing of coronavirus-related travel restrictions around the world. Yet, July figure was still down 86% versus the same month of that year before the eruption of the pandemic dealt a major blow to international travel.
Turkey’s leading FX income generating sector is pinning its hopes on Britain removing it from a Covid-19 travel red list later this week to help it recover from the pandemic, a spate of wildfires and Germany’s designation of Turkey as high risk.
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While Turkish tourism has experienced a strong rebound from last year, with foreign visitor arrivals for July jumping fourfold to 4.36 million, it remains well below pre-pandemic levels.
Many hotels in the southern Aegean region, which rely heavily on British tourists, may close by the end of August if Britain does not remove Turkey from its red list, tourism officials say.
While the Russian market has performed well, Germany’s classification of Turkey as a high-risk country this month has hurt the sector.
Kaan Kavaloglu, head of the Limak Tourism Group which operates four hotels in the southern resort of Antalya, said sales of Turkey packages to German tourists had slowed.
“We don’t see cancellations for the existing bookings, but new bookings have slowed down. We hope this decision will change in the short term,” Mr Kavaloglu said.
Ulkay Atmaca, head of Turkey’s Professional Hotel Managers Association, said with the fall in German bookings and the Scandinavian market remaining closed, the sector was looking to Britain, which sent more than 2.5 million visitors in 2019.
“We are eyeing the British market to open this week,” Mr Atmaca said. “We expect a huge demand from the British market as it opens.”
Hotels in Marmaris, a top tourist destination which was hit by wildfires this month, met Turkish banks on Friday to discuss loan restructuring, said Bulent Bulbuloglu, chairman of the South Aegean Hoteliers Union.
He said many hotels may not be able to repay loans until 2023.
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Data from Turkey’s BDDK banking watchdog showed total loans in Turkey’s hotel industry at 116 billion lira ($13.7 billion) and the industry’s non-performing loans at 4.2 billion lira ($497 million) by the end of June.
Mr Bulbuoglu said the sector was waiting for the British market to open “as a last chance”, and added that otherwise, 70 per cent of hotels in Marmaris would close by the end of August.
After years of lagging other EM currencies vis-à-vis the dollar, Turkish Lira has exhibited encouraging strength since July, as a falling import volume and rising tourism revenues shrunk the current account deficit. In addition to more than 25 upstream industries relying on tourism for turn-over, Lira stability, too, hinges on a strong finish to the season.
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