Due to rising costs and the suppressed exchange rate, hotels that increased their prices became too expensive for Russian tourists, resulting in July occupancy rates remaining at 60% in the Antalya region. Industry representatives believe that Germans will take the top spot from Russians this year.
Rising Costs and Suppressed Exchange Rates Impact Hotel Occupancy in Turkey
After breaking all-time records last year and starting the 2024 season with high expectations, the tourism sector faced challenges as increasing costs and suppressed exchange rates led to lower hotel occupancy rates. Hotels, particularly in tourism regions primarily catering to Russia, were forced to lower their prices as July occupancy rates remained around 60%. The Russian Union of Travel Industry (ATOR) noted that Turkish hoteliers reduced their prices due to the low holiday demand from Russia.
"May Holidaymakers" Not Indicative of the Season
May, known for its abundance of official holidays, is a popular vacation month for Russians. According to ATOR, 25% of Russians vacationing in May choose to travel abroad. ATOR estimates that during the two-week holiday period from late April to May 10, approximately 300,000 Russian tourists visited Turkey, 150,000 chose the UAE, and 60,000 preferred Egypt. The number of visitors from Russia to Turkey in May reached 739,000, a 13% increase. However, industry representatives assert that these "May holidaymakers," mostly budget-conscious tourists, are not indicative of the overall season.
During the holiday week, the average cost of a 7-8 night tour in Turkey was between 88,000 and 93,000 rubles per person, compared to 140,000-150,000 rubles in the UAE and 100,000-110,000 rubles in Egypt. However, Turkey's prices, which were under 100,000 rubles in May, soared to 300,000 rubles during the season. As a result, July occupancy rates in tourism regions like Antalya, which heavily depend on Russian tourists, remained around 60%. This is supported by data showing that only 7% of Russians who bought plane tickets for July chose Antalya.
Impact of the Ruble's Depreciation
Taras Kobishchanov, ATOR's Vice President, attributed the high prices in Turkey to the depreciation of the ruble. He noted that some hotels significantly increased their prices for July and August. While June saw excellent sales, July demand plummeted, leading to lower prices in July compared to June. Hamit Kuk, Chief Advisor to the President of the Association of Turkish Travel Agencies (TÜRSAB), explained this anomaly by citing the Eid al-Adha holiday, which boosted June occupancy. "July started low, and hotels offered last-minute discounts of 10-15%. Discounts are available not only for Russians but also for British and Germans. We hope for a strong performance in terms of numbers from Russia, but it seems Germans will take the top spot from Russians this year," he said. Hakan Saatcioglu, President of the Professional Hotel Managers Association, added, "Antalya received 5.5 million tourists from Russia in 2019, but this number dropped to 3.4 million last year. There are regions struggling to fill the gap."
After breaking all-time records last year and starting the 2024 season with high expectations, the tourism sector faced challenges as increasing costs and suppressed exchange rates led to lower hotel occupancy rates. Hotels, particularly in tourism regions primarily catering to Russia, were forced to lower their prices as July occupancy rates remained around 60%. The Russian Union of Travel Industry (ATOR) noted that Turkish hoteliers reduced their prices due to the low holiday demand from Russia.
"May Holidaymakers" Not Indicative of the Season
May, known for its abundance of official holidays, is a popular vacation month for Russians. According to ATOR, 25% of Russians vacationing in May choose to travel abroad. ATOR estimates that during the two-week holiday period from late April to May 10, approximately 300,000 Russian tourists visited Turkey, 150,000 chose the UAE, and 60,000 preferred Egypt. The number of visitors from Russia to Turkey in May reached 739,000, a 13% increase. However, industry representatives assert that these "May holidaymakers," mostly budget-conscious tourists, are not indicative of the overall season.
During the holiday week, the average cost of a 7-8 night tour in Turkey was between 88,000 and 93,000 rubles per person, compared to 140,000-150,000 rubles in the UAE and 100,000-110,000 rubles in Egypt. However, Turkey's prices, which were under 100,000 rubles in May, soared to 300,000 rubles during the season. As a result, July occupancy rates in tourism regions like Antalya, which heavily depend on Russian tourists, remained around 60%. This is supported by data showing that only 7% of Russians who bought plane tickets for July chose Antalya.
Impact of the Ruble's Depreciation
Taras Kobishchanov, ATOR's Vice President, attributed the high prices in Turkey to the depreciation of the ruble. He noted that some hotels significantly increased their prices for July and August. While June saw excellent sales, July demand plummeted, leading to lower prices in July compared to June. Hamit Kuk, Chief Advisor to the President of the Association of Turkish Travel Agencies (TÜRSAB), explained this anomaly by citing the Eid al-Adha holiday, which boosted June occupancy. "July started low, and hotels offered last-minute discounts of 10-15%. Discounts are available not only for Russians but also for British and Germans. We hope for a strong performance in terms of numbers from Russia, but it seems Germans will take the top spot from Russians this year," he said. Hakan Saatcioglu, President of the Professional Hotel Managers Association, added, "Antalya received 5.5 million tourists from Russia in 2019, but this number dropped to 3.4 million last year. There are regions struggling to fill the gap."
Rising Prices and Competition with Europe
Kaan Kavaloğlu, President of the Mediterranean Touristic Hoteliers and Operators Association (AKTOB), commented, "They say Russia is doing well, but 'well' is relative. Compared to a period when reservations hit rock bottom during the war, it is certainly better. But we are still behind compared to 2019, when Russians learned early booking and broke records."
Volkan Yorulmaz, President of the Kemer Promotion Foundation, noted that despite entering the high season, hotel occupancy rates remain around 60-70%. "Prices are high, inflation is high, and exchange rates are suppressed. There is a loss in the difference between income and expenses, resulting in a 25% loss in profitability. This forces us to increase prices. Consequently, we cannot compete with our European rivals, such as France, Italy, and Greece. Large facilities by the sea in the Kemer region seem to be fine, and there are no issues with hotels serving the middle-income segment. However, both cheap and luxury segments might face difficulties," he shared.
Negative Impact on Profitability
Burhan Sisli, President of the Alanya Touristic Operators Association (ALTID), stated that the sector experienced high occupancy during the June holiday period but noted that July, August, and even September are showing low occupancy overall, despite variations by facility. Emphasizing that hoteliers are trying to maintain contract prices and avoid lowering rates, Sisli warned, "With these cost increases, we will observe a significant drop in profitability by the end of the year. There will undoubtedly be effects of this decline, but we hope that following the recovery of our economies and those worldwide, we can return to a normal and sustainable structure."