Financial support for tourism industry

Turkey plans to provide €80 million worth of subsidies to support struggling hoteliers and tourism companies after already providing subsidies for airlines.

Turkish tourism is currently facing a major crisis due to the Russian travel ban imposed last November and a high double-digit slump in bookings from Germany and most Western European countries following terror attacks in the country.

In response, the country’s government this week unveiled wide-ranging financial support for the sector. Prime Minister Ahmet Davutoglu presented a ‘2016 Tourism Action Plan’ worth the equivalent of €80 million. “There is no reason to panic with regards to tourist numbers. I do not expect any contraction in the tourism sector,” he told a media briefing.

The central measure is that hotels, many of which are financed by loans, will not have to pay rental or leasehold interest this year. Instead, the payments will be made in three instalments next year. This will assist not only the hoteliers but also Turkish banks by ensuring they are not left with a mass of bad loans.

In addition, companies which bring at least 400,000 foreign visitors to Turkey can received subsidised loans, which will assist incoming agencies in particular. There is also financial aid for the operators of marinas and for ferry and ship operators.

Meanwhile, the subsidies for charter flights announced last month by tourism minister Mahir Ünal on a trip to Germany are also part of the action plan. Airlines will receive a subsidy of $6,000 per flight in April and May. German tour operators had criticised this plan, saying subsidies for the main summer season would be more important and should be paid directly to tour operators rather than airlines.

Meanwhile, TUI Group subsidiary Tantur remained the largest incoming agency in Turkey last year with a market share of 15.4%, handling some 1.9 million TUI customers from diverse countries, according to the annual ranking of market researcher Erol Karabalut which is based on official figures, surveys and estimates.

Second with a 9.7% share was Thomas Cook’s partner, Diana Travel, which increased volumes after taking over handling of Öger Tours customers. In third place was the Turkish OTI Group (5.7%), which has tour operator businesses in Russia (Coral), Eastern Europe and Turkey. FTI Group’s destination management company, Meeting Point International, rose two places to fourth last year, with a 5.5% market share, ahead of the Russian agencies Anex Tour and Pegas.

In terms of the German source market, Tantur (18.8%) is number one ahead of Diana (17.7%) and Meeting Point (16.8%). In fourth place with 11.3% is Novissima, the former Alltours agency which is no longer active for the German tour operator. The next largest incoming services companies are MTS, which works for Bentour and various dynamic tour operators, and DER Touristik’s new subsidiary Destination Touristic Services (DTS).

According to official tourism ministry statistics, some 5.6 Germans visited Turkey in 2015, an increase of 330,000. The number of Russian holidaymakers dropped by 900,000 to 3.6 million.

This year, incoming agencies active for Russian companies are likely to be heavily impacted by the ongoing ban on travel to Turkey while the outlook remains unclear for the German and other Western European source markets.