Bombings affect Turkish tourism industry and economy

Istanbul suicide attacks take toll on Turkey’s tourism sector and economy, as tourism revenue is expected to decrease significantly

A total of 80 people died in Turkey after the four suicide bombings that shook the country.

Following the Blue Mosque attack in January, when 12 German residents have lost their lives, and tense political relationships with Russia after the warplane incident, Turkish tourism revenue is expected to drop this year by $8 billion.

As TUI tourism group announced a 40 per cent drop in bookings for this destination, Thomas Cook reported that its customers prefer Spain, U.S. or Cuba to spend their holidays in 2016. Moreover, the number of Italians and Japanese visiting Turkey dropped by 27 and 40 per cent respectively.

According to Tourism Ministry released data, Turkey registered 1.6 per cent less visitors when compared to last year. Further on, tourists will avoid Turkey, due to security warnings.

“Security concerns have the biggest impact on high-income tourist groups, who are most likely to change their plans to visit,” economist Mehmet Besimoglu, from Oyak Investment, explained.

The effect security issues has on tourism is already being felt. The forecast for 2016 sums up an $8 billion fall in revenue.

“If terrorist attacks continue and things get worse, the impact could be as high as one percentage point being deducted from economic growth,” commented Muammer Komurcuoglu, an Is Invest economist.

The charter flights ban president Vladimir Putin imposed as a part of punitive economic sanctions against Turkey probably has the biggest impact over the country's tourism. Almost 1 million Russian tourist have canceled their trips to Turkey in 2015.

Ercan Erguzel, economist at Morgan Stanley, fear the situation may worsen.

“Based on our talks with sector representatives, we have the impression that number of Russian tourists may even fall to below 1 million in 2016 in the most extreme scenario,” he declared.

Also, the decreasing economy situation could translate into an uncertain political situation of President Recep Tayyip Erdogan and the AK Party ruling the country. Consequently, Prime Minister Ahmet Davutoglu has offered an emergency $87 million grant to revive the tourism sector.