Falling Russian ruble could damage Turkish tourism

Falling Russian ruble could damage Turkish tourism

The quick depreciation of the Russian ruble against the U.S. dollar might affect Turkish tourism, warned Yusuf Hacısalihoğlu, head of the Association of Mediterranean Tourism and Hoteliers of Turkey (AKTOB), during a conference in the Turkish resort of Antalya on Nov. 28.

In the opening speech of the international conference titled “Tourism of Future, Future of Tourism,” Hacısalihoğlu asked the government to take preventive and supportive steps for the 2015 season.
The ruble has depreciated by 30 percent against the dollar in 2014, mainly due to U.S. and European Union sanctions because of the crisis with Ukraine; both Russia and Ukraine, of course, are Turkey’s northern neighbors across the Black Sea. The Russian losses reached $40 billion due to the Ukrainian sanctions and $100 billion due to falling oil and gas prices this year, the Russian Finance Ministry stated earlier in November.

More than 4.2 million Russian tourists visited Turkey in 2013, coming second only to the 5 million plus Germans who came out of the total of nearly 35 million. “That makes Turkey the sixth most tourist receiving country in the world,” said Osman Ayık, the head of Turkey’s Tourism and Hoteliers Federation (TUROFED), during the conference. “More than 12 million of those tourists were hosted in Antalya alone.”

Antalya has actually gained importance for Turkey in the political field as well. Prime Minister Ahmet Davutoğlu announced that the government was prepared to host the G-20 Summit in November 2015 there. Menderes Türel, the mayor of the city, underlined the importance of having Expo 2016 in Antalya.

Russians are number two in overall guests in Turkey but number one in Antalya at more than 3.3 million. But as Hakan Ateş, the general manager of Denizbank of Turkey, which was bought by Russia’s Sberbank in 2012, pointed out at the conference, Turkey is 10th in tourism revenues, falling behind in the world in terms of the number of tourists. Of Turkey’s nearly $800 billion national income, some $32 billion, or 4 percent, comes from tourism revenues. “It’s like oil for Turkey,” Ateş says.

The depreciation of the ruble against the dollar could hit the purchasing power of Russian tourists, Antalya tourism investors worry. When combined with the depreciating image of Turkey in Europe, especially in Germany due to Turkey’s domestic political situation and the atmosphere of war in Syria and Iraq, that worry increases.

“Tourism do not like to [hear] words like war,” Hacısalihoğlu said. “Turkey could not even carry out efficient PR to tell the world how important a humanitarian effort it has paid by helping 1.6 million refugees from Syria.”

For Peter Frankhauser, the CEO of Thomas Cook, one of leading tourism operators, says that political crises like wars are not the major problem. “We have seen worse,” Frankhauser said. “We can tell our customers that Antalya is 400 miles away from the Syrian border. This is a new world and we have to live with crises. The problem that keeps me awake until morning is to attract the future customer who wants everything in its mobile device in digital form. We have to find a way bridge the old world with the new one.”

That ties the issue to changing customer habits and also the purchasing power of future tourists.
Russian tourists are likely to be an issue during Russian President Vladimir Putin’s talks with Turkish President Tayyip Erdoğan during his visit starting today, yet not a major one. There are more strategic issues like having Turkey continue to defy sanctions against Russia and buy Russian gas, while also continuing work on Turkey’s first nuclear power plant project in Akkuyu.

For Turkish tourism investors in Antalya, the acute issue is not to lose German but especially Russian tourists. They admit that they have a lot to do like diversifying the content, protecting the environment better and going digital in a transforming world, but they think they deserve more attention from the government. None of them wanted to go on-the-record, but almost all said they would like to have Tourism and Culture Minister Ömer Çelik in the conference to hear their concerns.