09 Nov Turkey’s Weak Economy Entices Travelers With Good Deals
Originally reported on by Dan Peltier for Skift:
Turkey’s tourism numbers are rising after two years of a slump, largely because the country’s inflation is nearing its fastest pace in 15 years and creating the residual effect of good deals for tourists.
Turkey trips are cheaper for the country’s top visitor markets such as Russia, Germany, and the United Kingdom than they were a year ago, as overall arrivals to Turkey grew about 23 percent for January to August compared to the same period in 2017, according to data from the European Travel Commission.
But Turkey’s foreign debt and weak lira have investors concerned. Bloomberg reported this week that Moody’s has an increasingly dim view of growth prospects for Turkey’s economy because of “relatively high exposures to external financing.” Moody’s projects that Turkey’s economy will slow down into next year because of the lira, which is down 30 percent year-to-date against the U.S. dollar.
That all implies Turkey could continue to be a bargain for travelers from some regions but could stall tourism infrastructure investment across the country. And travelers will likely pay more for their hotels. The European Travel Commission’s analysis found Turkey’s hotels have taken advantage of the exchange rates and raised rates — up 5.1 percent in euros.
After Slovenia, Turkey had the second-highest growth for outbound European arrivals from January to August. The country is on course to recover a significant amount of market share lost to other European destinations in recent years because of terrorist attacks and political instability.
Many of Turkey’s top markets are up by double digits this year for arrivals, but still below pre-2016 levels in absolute terms. The European Travel Commission projects Turkey’s tourist arrivals will reach pre-2016 levels by 2019 if current rates of growth continue.
“In 2016, the eastern Mediterranean was in shambles,” said Frank Del Rio, Norwegian Cruise Line Holdings President and CEO, during the company’s third quarter 2018 earnings call on Thursday. “Today, it’s not in shambles but it is an improving situation.”
Next year, the operator — which includes Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises — will have 15 sailings that call on Turkish ports. That number will increase to 23 in 2020.
“And I think that if those itineraries in ’19 and ’20 perform well … that you can see the industry and certainly us returning to the Eastern Med in a much bigger way in 2021,” Del Rio said.
Thus far, the 2019 sailings that include a port in Turkey are performing better in terms of pricing and occupancy than itineraries that don’t call on the country around the same time, he said. Before the region was made off-limits by security concerns, the eastern Mediterranean made up about 5 percent of the company’s capacity and commanded high prices.
“This is very much a forward-looking business and you have to introduce itineraries way in advance,” Del Rio said. “It’s difficult to turn on a dime, but we’re seeing positive trends in the Eastern Med, which we hope can continue.”
Turkey has also been a boon for Intrepid Travel, which had a 248 percent increase in bookings year-to-date compared to 2017. Due to the increased demand, Intrepid is launching three new tours for Turkey in 2019, now offering a total of 21 Turkey itineraries.
Skift News Editor Hannah Sampson contributed to this report.