Published On: Mon, Apr 27th, 2020

Effect of Coronavirus outbreak on Turkish tourism and recovery prospects thereafter

It is not very difficult to predict the tourism sector that does not expect the Ministry, unable to develop alternatives other than unauthorized and personalized solutions and which is having difficulty performing the advisory function expected of it in the new government system, will do much for the sector.

Turkey provides a great majority of its potential from destinations such as Asian, Iranian, Russian, Balkan, Middle East and European markets and it would be naive to say it would be able to overcome this in such an environment of uncertainty.

The negative pressures on demand, especially the measures carried out to stop daily life in the source countries, make it difficult to predict the recovery of cancelled bookings.

The first indications are likely to be seen between May 1 and 15, with the development in the Russian market. In this market, which accounts for the highest share of Turkey’s total visitors, the behavior of nearly 7 million people who bought pre-planned holiday programs last year, is significant.

Apart from the Asian market, which has been completely lost for this year, the situation in the European and UK markets which have experienced the impact of coronavirus very heavily in their daily lives does not look much different from Russia.

It looks as if cancellations in the German market, which are especially decisive in terms of purchasing power for Turkey, are likely to affect not only this country but also Denmark, Sweden and Norway in an arc stretching from the Netherlands to the Scandinavian countries.

As for Italy that has been trying to survive the crisis with the most severe damage among EU countries, it is understood that there will not be any activity during July-August in which the demand level for Turkey reaches highest point.

Even before examining the potential of the United Kingdom and the Middle East and the United States, it is clear that there will be dramatic declines in the number of visitors and foreign exchange inputs reached in the past year only considering developments outlined above.

However, there is still a reality that brings optimism. With Turkey competing, Spain, Italy, Croatia and Greece which Turkey is in competition with are in the same position as this country. When vacationers from Germany, Central and Western European countries regain their habit of going to warmer seas – which may seem overly optimistic as it stands now – after the virus pressure, Turkey is likely to start the race on equal footing.

Now those who run the country have two options: The first is to leave the sector to its own destiny, with the approach “Whoever dies, dies the remaining is ours”. The second is to resort to measures to prevent the disposal of investments in the sector, which is worth hundreds of billions of dollars in today’s conditions, at the expense of destruction.

In fact, to defer taxes, social security premium payments resulting from employment which they cannot pay anyway due to excessive negativities, for a reasonable period of time.

Increasing the credit limits made available by banks at determined rates and extening maturities within this year by splitting the maturities of future loan installments into the next three years. Supports will likely not bring back turnover of about US$ 8 billion which will obviously decline this year. But it may largely retain the value of US$ 100 billion worth of investments, whose values will halve at best.

(Mostly translated from an article by Mr. Bahattin YÜCEL, former tourism minister and one of the top experts in tourism sector)

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