No Return to normal until 2023 for Tourism

By Samiye Başçı, Sozcu.com.tr

While the tourism sector is preparing to close 2020 with a loss of income over 60 percent, research points out that 2019 figures can be recaptured in 2023 at earliest.

After the quarantine decisions from its main market Europe, Turkish tourism sector, which couldn’t reach its target for 2020 season, is focused on 2021. It is expected that it will take 3 years to reach the  revenue figures of 2019. Betting on gross FX income of $15 billion this year, the sector is expected to generate an income of $20-27 billion in 2021. The record numbers of 2019, when tourism revenue soared to $34.5 billion gross and the 44.7 million foreign tourists were recorded, are estimated to be reached in 2023.

According to the report prepared for tourism sector by international auditing and consultancy company Earns & Young (EY), course of the epidemic and the process of season openings of hotels will determine developments in 2021.

According to the report, if the epidemic continues with its current pace and hotels can accommodate tourists actively in June-July 2021 season, Turkey’s tourism revenue will increase 35 percent compared to the previous year. If a faster recovery occurs in Turkey, tourism revenue is expected to rise by 60 percent compared to 2020.

The report  points out that all players of the sector, from hotels to restaurants and tour organizations, have made an average capital investment of 15-20 billion TL in the last 9 years, and $16.2 billion in 2019 alone.  EY estimates that  capital spending will not reach  $15 billion in 2020.

Report states that since June, a  very tenuous recovery was observed despite full normalization by July, as well as  resumption of flights, which will at best  contribute to Turkish economy around $15 billion in 2020.

With these figures there will be a 60 percent decrease in revenues compared to 2019. In 2021 however, it is estimated that this figure can reach between $20-27 billion.

Evaluating the results of the report, EY Turkey Managing Partner, Real estate, Construction and Tourism sector director, Lawyer Mehmet Küçükkaya said, that the resilience of Turkish  tourism  industry, gained  by severe fluctuations in revenues over the last 6 years, proved advantageous during the epidemic for players of the sector of Turkey. Küçükkaya stated, “Since Turkey faced similar hardships before, tourism sector made agile moves to turn the epidemic to its own advantage. We estimate that 20-24 million tourists will visit Turkey in 2021.”

 

Translation: Cem Cetinguc

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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 www.paraanaliz.com and has contributed to the financial daily Referans and the liberal daily Radikal.