Weak Turkish lira fuels tourist and investor spending in Turkey

Weak Turkish lira fuels tourist and investor spending in Turkey
Written on: 1 September 2018

Despite recent economic woes, tourist spending levels and investment in real estate in Turkey is surging ahead thanks to favourable exchange rates. The weak value of the Turkish lira against the US dollar is ensuring retailers, developers and Turkish estate agents are enjoying increased sales to foreigners.

Turkey's tourism revenue on the rise

According to official statistics released by the Turkish Statistical Institute (TurkStat), Turkey's tourism revenue reached US $7.04 billion during the second quarter of 2018, a 30.1 percent increase on figures from the same period last year. Almost 85 percent of the revenue was from foreign visitors to Turkey, the remainder from Turkish tourists residing abroad. This colossal improvement is based on figures released in July, before US sanctions were imposed causing the Turkish lira to tumble. Although economists are still in debate over the future of the Turkish economy, what the lira’s demise has meant is that Turkey is suddenly far more attractive to anyone with dollars, Euros or pounds. For foreigners, daily life and property in Turkey is now considerably cheaper than it was last month. Many travel industry and investment experts now believe the new surge in foreign arrivals will skyrocket tourism revenue and figures for the coming months. Turkish resorts are now heaving with holidaymakers eagerly taking advantage of the great deals on offer.    

"Turkey's retail and tourism industry is undergoing a revival on a grand scale" believes Selim Seyhun, MD of Global Blue.

In a recent report by travel intelligence specialist Moodie Davitt, Selim Seyhun, Managing Director of the Swiss tax refund company Global Blue, stated, "a weak Turkish Lira against the Euro has made shopping much more affordable and has had a positive impact on the number of tourists and, more importantly, spending."

Global Blue announced sales from its stores and services in Turkey had risen by 52% in the second quarter of 2018, noting that spending from tourists from the Gulf and Iran now accounted for more than a third of the countries tax-free shopping spend. Figures are expected to rise significantly over the coming months due to increased arrivals and positive exchange rates.

Spending boosted as local tourists stay in Turkey during the Kurban Bayram (Eid al-Adha) celebrations

Last weekend the Muslim Feast of Sacrifice, ended. During the 9 days national holiday over 9 million Turkish tourists opted to stay in Turkey rather than travel further afield. According to Mehmet İşler, Vice President of the Hoteliers Association of Turkey, "most of our citizens preferred to spend their holidays in the country instead of going abroad, especially due to the high exchange rates for the US dollar and Euro against the Turkish Lira." Over TL 9 Billion (US $ 1.45 billion) is said to have been spent by local tourists during the Eid celebrations, the Aegean and Mediterranean resorts of Bodrum, Cesme and Fethiye proving the most popular destinations. This influx in Turkish guests, coupled with the rising numbers of foreign visitors, ensured hotels were fully booked and beaches were packed. Restaurants and attractions were brimming and local traders happy with takings - the amounts gained in just a few short days significantly boosting yearly takings.

"There is a big rebound in Turkish tourism and the attractiveness of Turkey" says Jens Bischof, CEO of Sun Express

Foreign arrivals, investment and spending is certainly on the rise in Turkey. Figures show a sharp increase in arrivals from Europe and the Middle East this year. Hotel chains like The Hilton Group reported a 62% rise in bookings from visitors from the Persian Gulf and Iran in a recent report in the Financial Times. Tour operator Thomas Cook also reported a 63% increase in bookings to Turkey this year. Anth Mooney of Thomas Cook Money stated, "the lira is at an all time low against the pound meaning there's lots of very good value holiday deals on offer". Jens Bischof, Chief Executive of German- Turkish airline Sun Express described Turkish tourism as on the "rebound". According to Anadolu New Agency, Sun Express had a "record year" in 2017 and Bischof is confident that 2018 will be even better noting a 35% increase in the number of passengers already taken to the coastal resort of Antalya. If the fall of the lira has done nothing else, at least it has ensured a great year for tourists and tourist spending.

"Now is the time to buy a property in Turkey" says Tolga Ertukel, MD of Turkey Homes. "It's possible to get a property in Turkey for up to 20 percent cheaper than last month due to exchange rates. Our city and coastal offices are receiving far more enquiries since US sanctions were announced. It's obvious that investors are keen to take advantage of the wealth of excellent Turkey property deals now on offer".

Real estate in Turkey is booming with enquiries and sales on city and coastal properties on the increase. TurkStat reported that Turkish real estate purchases to foreigners rose 65.7% year on year in July. Many industry experts expect current exchange rates to fuel investments especially with regards to property in Istanbul and lifestyle villas and apartments along the Turkish coast. Figures show it's the Arabs and those from Iran that purchase the most investment properties in Turkey, the Russians and Europeans preferring the lifestyle choices in areas such as Antalya and Bodrum.

If you would like more information on Turkish property or investment, please see the Turkey Homes website.

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