Tourism is one of the biggest contributors to Türkiye’s economy, making up more than 10 percent of Türkiye’s GDP (during the pre-pandemic years). Despite the pandemic, Turkish tourism had a successful year welcoming over 51 million tourists. Goals for 2023 were even higher with experts expecting the tourism sector to reach its peak with a record-breaking number of tourists. However, with the increased inflation in Turkiye, and the decreased number of Russian tourists, 2023 summer tourism fell short of expectations.
In January of 2023, Tourism and Culture Minister Mehmet Nuri Ersoy declared the goals for 2023 as 60 million tourists and 56 billion dollars in revenue, a higher rate than pre-pandemic levels. Following this goal, the number of tourists visiting Türkiye in the first half of this year increased by 17 percent from the same period last year, reaching 22.9 million, as a recovery from the pandemic. Despite the optimistic figures, industry insiders report that it will be challenging for tourism administrators to meet the 2023 goals with increased inflation. Moreover, these numbers do not indicate the situation for hotel administrators. Tourism and Culture Minister Mehmet Nuri Ersoy announced that the hotel occupancy rates did not meet expectations for the summer of 2023. Tourism insiders reported that the occupancy rates on the Mediterranean coast were lower than 70 percent and occupancy rates for hotels near Ege region were around 60 percent. Moreover, Ersoy said that especially luxury hotels faced a decrease in occupancy rates as the high prices pushed Turkish citizens to choose more budget-friendly options such as renting houses or smaller hotels.
With the main reason being the high inflation rates reaching 50 percent yearly, other factors such as the earthquake and over-priced transportation costs prevented Turkish citizens from traveling domestically this year. In July of 2023, According to the price index (TÜFE), the prices for hotels and restaurants increased by more than 82%. Alongside the high inflation rates, the hotels made unreasonably high price increases to take advantage of the inflationary market. Additionally, in July, the prices for transportation increased by over 17% from last year. With a 70% increase in gasoline prices in the last two months, Turkish tourists had a tendency to travel less or to closer cities this summer. Another huge contributor to this year's dull tourism was the earthquake in February. The earthquake brought a negative atmosphere and economic instability, causing the bookings for hotels for the summer to decline. Minister Ersoy explains that the earthquake coinciding with the early booking dates of the hotels had a big impact on the drop of the occupancy rates. Another big factor was the economic uncertainty due to the elections in May, as can be seen from the high inflation and unstable prices.
Turkish citizens were not the only reason for the low occupancy rates of hotels this summer. Russian tourists, a huge contributor to Turkish tourism, decided not to visit Turkiye this summer due to the currency crisis in their country. As the conflict between Ukraine and Russia continues, the Russian Ruble hit the lowest this summer, and Russian citizens face huge price increases. Thus, for their travel destinations Russian tourists switched to more budget-friendly options such as Egypt and Thailand. According to Ilya Umansky, President of the Association of Russian Tourism Industry, 2 million tourists will not go to Turkiye this summer. As Umansky reports, 7 million were expected to visit Turkiye this year, however, due to changes in prices for holidays in Turkiye and the exchange rate of Russian currency, the expectations will likely not be realized. According to Russian sources, the average cost of a tour to Turkiye last year was about $1880, and this year it is $2766. Thus, the prices are high even for foreign tourists. In addition, according to Tourism and Culture Minister Mehmet Nuri Ersoy, this year the Russian tourists who decided to visit Turkiye preferred renting villas or vacation homes in Antalya, rather than traditional resorts. He adds that Russian citizens who bought houses in Turkiye earlier rent those houses to incoming Russian tourists, decreasing the demand for resorts. With over 5 million Russian tourists coming to Turkiye every year, the loss in the Russian market will likely have consequences for Turkish tourism.
With the decreased occupancy and high costs hotel administrations also faced challenges this summer. As the minimum wage was increased before the elections in Turkiye, it had a big impact on hotel costs. It is a significant burden on hotels as over two million workers are employed in the country's tourism industry and most of them earn the minimum wage. Moreover, with increased costs, both domestic and foreign tourists decided to shorten their stay. In the first six months, the average stay was 9.9 nights down 5.7 percent from last year. In addition to the high inflation, the food and beverage costs for hotels increased by 54% in real figures.
Overall, with the inflation rates, and the negative economic environment in Turkiye, Summer 2023 was a disappointment for the tourism sector. Although Turkiye attracted more visitors this year with lower prices for foreigners, the hotels did not meet the expectations and had the burden of increased costs.
“2 Million Russian Tourists Will Not Go to Turkey.” 2 Million Russian Tourists Will Not Go to Turkey - Russian Travel Digest, 24 July 2023.
“Kültür ve Turizm Bakanı Mehmet Nuri Ersoy: ‘Otel Dolulukları Beklentilerin Altında Kaldı.’” Cumhuriyet, 31 July 2023.
“Pahalılık Turizm Sektörünü de Vurdu: Yabancı Turist Türkiye Yerine Hangi Alternatiflere Yöneldi?” Independent Türkçe, 18 July 2023.
“Türkiye’De Otel Fiyatlarında Son Durum!: Turizm Ajansı: Turizm Haberleri: Turizm Gazetesi.” Turizm Ajansı, 3 June 2023.
Written by: Defne Taykurt
Edited By: Bilge Öztürk & Yağmur Ece Nisanoğlu