Lira slide could be blessing in disguise for Turkey's tourism - Global Data

The ongoing slide in Turkey’s currency brought on by years-long accumulation of debt and President Recep Tayyip Erdoğan’s unwillingness to increase interest rates could help the country’s ailing tourism industry as it battles the coronavirus pandemic, analytics provider Global Data said on Friday.

Despite a high number of cases, Turkey maintains a lower COVID-19 death rate than rivals in the sector, such as Spain, and the country’s favourable exchange rate likely to allure more foreign tourists, it said.

The Turkish lira has lost almost 20 percent of its value since January with the currency plummeting to a record low of 7.3677 per dollar on Friday. The Turkish central bank and state-run lenders have spent tens of billions of dollars this year defending the lira as foreign investors and local deposit holders swapped out the currency.

Global Data drew attention to British tourists, Turkey’s third source market at 2.44 million visitors in 2019, who are currently banned from visiting usual destinations – such as Spain – as an example of factors that give Turkey a leading advantage in the field.

Turkey’s tourism sector, a key contributor to the country’s economic growth, was shut down in March as part of measures to contain the spread of the deadly novel coronavirus. In June, the industry re-opened for domestic tourism under strict government guidelines.

The country’s weak currency was already the reason behind Turkey’s tourism boost in the past few years despite a string of terrorist attacks that rocked the country between 2015 and 2017, Global Data said.

Turkey ranked sixth globally in tourist arrivals in 2018, according to the United Nations World Tourism Organisation.

But Turkey must be careful not to upset Russia, whose nationals topped the source market for Turkey in 2019 with 7.16 million visitors, Global Data said, which pointed to Ankara’s move last month to reconvert the Hagia Sophia into a mosque.