It is now time for Turkey’s tourism sector to raise revenue
Turkey’s tourism sector has been enjoying a strong rebound after a couple of tough years. Hotel occupancy rates across the country are rising, and bookings, especially from European markets and Russia, are booming. The sector’s revenues have, however, remained to be quite lower than its European counterparts.
2016 was a disastrous year for Turkey’s tourism amid a series of bomb attacks and a diplomatic crisis with Russia. A failed coup attempt in the summer of that year made things worse. These negativities led to Turkey’s tourism revenue to drop to $22.1 billion in 2016, nearly a 30 percent year-on-year decrease. The number of foreign people visiting the country declined to 25.3 million in 2016 amid a 76 percent year-on-year decline in Russian arrivals. Many European travelers also removed Turkey from their tourism destinations.
A dramatic ease in security concerns and normalization in bilateral ties between Turkey and Russia have enabled the sector to reverse this fairly bad trend for the better, at least in terms of foreign arrivals. The number of foreign arrivals in Turkey rose to 32.4 million in 2017 with a 27.8 percent year-on-year increase. Turkey’s tourism revenue also reached $26.3 billion last year with a nearly 19 percent year-on-year increase.
Hotel occupancy rates in Istanbul soared to 62.6 percent in 2017 with a 26 percent year-on-year increase and to 59.8 percent in Antalya with an 11.5 percent year-on-year increase, according to STR Global data.
Bookings for this summer have also soared. For instance, early figures for this year show a shift by British travelers toward east of Spain for summer 2018, and “Turkey the stand-out market so far,” according to Thomas Cook executives.
A top official from Corendon Tourism on Feb. 8 said that the company saw an almost 100 percent year-on-year increase in summer bookings for Turkey, with a significant surge in demand from the Dutch and Belgian markets.
Similar good news is also coming for Germany and Russia, Turkey’s top markets.
However, it is not possible to say the same thing for the sector’s revenues.
Corendon Airlines Chair Yıldıray Karaer said that in the last two years Turkey’s booking prices almost halved.
Only a 10 or 15 percent increase in prices should be expected for this year, according to Karaer, as Reuters reported on Feb. 8.
In a closed meeting, a leading hotelier said that it was not an option for Turkish tourism players to set hotel room prices right now
“We are just accepting what we have been offered from our European or other counterparts,” the hotelier noted last week.
Despite a huge increase in hotel occupancy rates, the sector faced a big loss in revenue due to cheap room prices, with a 12.4 percent decrease in 2017 compared to the previous year, being at 66.8 euros on average.
According to STR Global data, the most expensive hotel prices were seen in Switzerland last year with an average hotel price at 192.8 euros, followed by Italy, Malta and Croatia.
The gap is incredibly high.
Now it is time for Turkey to focus on developing solid strategies that will hike these prices and prevent any negativity that will tear down the sector.