By THO Nonresident Fellow, John Simpson
Turkey is one of the top ten tourist destinations in the world, receiving between roughly 45 and 50 million visitors a year from all over the world. The impact of COVID-19 on the global tourism industry has been significant, and the impact on Turkey and its economy has certainly been no exception. Tourism from the west – especially from the United States – has dropped dramatically, virtually to zero.
According to the World Travel & Tourism Council’s 2015 report, “the travel and tourism sector, contributing $7.6 trillion to the global GDP in 2014, was the fourth largest industry after mining, financial services, and retail respectively.” That’s big. Turkey has ambitious targets to increase its share in this giant global industry, as noted by the Invest-In-Group’s 2016 article Turkey's Rapid Climb in the Global Tourism Rankings.
But what does this mean in the age of COVID and a growing global health pandemic? How does Turkey’s standing in world tourism rankings shift given the changing international tourism landscape? And what effect will this have on the Turkish economy? These are important questions as Turkey aims to host 50 million tourists and earn $45 billion in tourism revenue by 2023. This is one of the many goals of the “Future Lies in Tourism Support Fund,” established by the UNDP. This fund was established “on the achievements and lessons learned in order to create mechanisms to support local tourism initiatives.” What will be the lessons learned for Turkey following an unprecedented global pandemic? And how will these lessons shape the future?
I sat down with Dr. Aril Cansil, Professor of Marketing and Public Relations at Gazi University in Ankara to ask him about his thoughts on the state of tourism in Turkey today, the impact of the global COVID-19 pandemic, and their relationships to the suffering Turkish economy.
“Dr. Cansil, thank you for taking the time to speak with me today. I was wondering if you wouldn’t mind telling me a little about the tourism situation in Turkey, what it looks like, and how COVID-19 has effected the tourism industry there.”
“The economy is really sinking in Turkey, unfortunately; however, Turkey is also a major tourist attraction. Overall, it’s around the top five in the world. It’s a cheap country in comparison to European countries such as France, Spain, and Italy. In this spectrum, it’s on the cheaper end. Many people come to Turkey from nearby Arabic counties, Israel, Germany, China – China is a big customer – and Britain, to name a few. In 2019, for example, we had about 450,000 people – almost half a million – coming from the Americas. In that same year, we had about 50 million tourists from all over the world. From that 450,000, only about 50-60,000 come from North America. With the COVID-19 outbreak, the numbers went down – less than half, perhaps by a quarter now. In the same timeframe, you had a lot of people coming from Ukraine, Russia. More people with the virus came to Turkey, so it exploded, basically.”
“What about in the other direction? Obviously with the lock down in the United States and the State Department raising the travel advisory warning to level 4, not a lot – if any – Americans are going out, so you must’ve seen – certainly from the United States – a near stop in travel from North America.”
“You mentioned the economy sinking in Turkey and Turkey being a cheap country for visitors. How do you think the economy will impact the tourism field? Could you say a little more about that?”
“The Turkish economy showed a big explosion in the early 2000s, largely in part due to REIT funds – Real-Estate Investment Trust funds. Hundreds of billions came to Turkey and turned into construction – roads, real-estate mostly – some public investment. It made a positive impact on the economy, but it’s meant a lot of foreign debt. Now it’s time to pay and there is nothing to support that because Turkey is not a very productive country. With all the funds, people got rich but it was kind of “on-paper” rich. There wasn’t really anything solid. The service sector has grown exponentially; however, when it comes down to payments, it doesn’t work, so it’s going down the drain now. The economy is in the red-zone and there is a lot to pay for, so we don’t know what’s going to happen.”
“Now that there’s talk of a potential COVID-19 vaccine – there are these semi-successful trials – do you think that with a vaccine – maybe next year at some point – there might be a re-boost to Turkey’s tourism industry and potentially the Turkish economy?”
“Obviously. If Turkey would be able to pay for the vaccine, yes. But apparently the government owes something like $1.5 billion to pharmaceutical companies abroad, so without paying that, I’m not sure that Turkey can get a hold of any vaccine next year. At some point, I am expecting that Turkey will become a cheap labor market for Europe. I think, eventually, that the “dirty industries” will come to Turkey because Europe is swiftly transitioning to an industry-for-zero model, so they don’t want any pollution or “dirty industries” on their lands. Turkey is a good candidate for that, though I’m not sure exactly how this will impact tourism. But consider this: 50-55 million people per year visit Turkey in normal circumstances. They don’t leave huge amounts of money, but it’s a lot. It’s definitely an SSS country.”
“Sea, Sun and Sand. Turkey right now is very conservative deliberately. This is an Islamic government and they’ve been in power for about eighteen years now. They’ve converted the country; western-looking Turkey is now eastern-looking Turkey, unfortunately. Turkey is being prepared to be the China or Bangladesh of Europe.”
“As we move forward in 2021 and hopefully travel and tourism begin to pick up again, what do you think Turkey’s role in the region will be as either a destination point or as a jumping-off point for tourists to travel in the region?
“It’s a hub and a distribution point regionally because so many people come over and they can take any flight to anywhere in the region – to the Middle East, to Europe. Someone coming from North America, for example – there are always cheap flights to go anywhere from Istanbul. It’s a good hub and a preferred destination. With the new airport now there will be many more flights. Lufthansa, for example, is creating a major hub at the airport here. Turkish Airlines has flights to almost every country in the world and they are usually not very expensive flights, so it is a very good distribution point from a logistics standpoint.”
I’ve thought about Dr. Cansil’s words since our interview together, especially given recent COVID vaccine developments. Like many good conversations with scholars, I’m left with more questions than answers. While recent vaccination news is generally positive from a health standpoint, what good is a vaccine if a country such as Turkey cannot pay for it? Will this create greater gaps between the haves and have-nots, making the vaccine an additional economic issue to grapple with? Placing this into a larger context, further questions arise, especially given the major hit on the Turkish tourism industry, coupled with very real troubles regarding the Turkish lira. In other words, how will Turkey cope? From the US side, the realization of possible upcoming CAATSA (Countering America’s Adversaries Through Sanctions Act) sanctions and the impact this may have on the Turkish economy are realities Turkey - including its fragile tourism industry - should consider.