Turkish lira keeps hitting record lows against the major currencies on exchange markets due to years of debt accumulation and the unwillingness of President Erdogan to increase interest rates.
The continuous drop of the Turkish currency could actually help tourism in the region despite the uncertain times brought by the COVID-19 pandemic, with industry experts forecasting a decrease in international arrivals of only 31.6% in 2020 compared to 2019.
Indeed, despite having a similar number of cases to France and Italy (237,265), the number of casualties is at a similar level to Egypt and way below Spain – two of Turkey’s main competitor markets. This allowed Turkey to reopen its borders to tourists on the 1 June, which slightly attenuated the impact of the pandemic on the peak season.
Besides giving an impression of relative safety compared to its competitors, the favorable exchange rate is likely to attract foreign tourists, and, more particularly, British ones – who represented 2.44 million visitors in Turkey in 2019 (third largest source market) and who are currently not allowed to visit some of their usual destinations such as Spain.
A weak currency was already the reason tourism in Turkey experienced such a boost in the past few years, despite the negative impact of the multiple high-profile terrorist attacks between 2015 and 2017 on the country’s image.
However, it would be good for the Turkish Government not to upset Russia, which is the number one source market for Turkey (7.16 million visitors in 2019), as it seems to have done by transforming the famous Hagia Sophia museum into a mosque. Indeed, losing this source of revenue like it did in 2016 due to diplomatic tensions (experiencing a 76% decrease in Russian visitors) would be terrible for the country in the current climate.