Tourism industries in Turkey and Egypt may be forced into a price war, with both counties likely to be hit hard by Russia’s invasion of Ukraine, which will put more pressure on their already strained economies.
The countries’ hopes that they would this year be able to turn around their tourism sectors, which heavily rely on Ukrainian and Russian visitors, are sinking rapidly.
Joseph Fischer, a Tel Aviv-based tourism consultant who advises on global travel, told The Media Line that Russia’s attack on Ukraine will lead to a major price war between Turkey and Egypt as they compete for tourists, most significantly forcing hotels to lower their prices.
The combination of a currency crisis, rising costs, and a decrease in tourists means businesses in the two countries will not be recovering from the pandemic, as was once thought, Fischer says.
Turkey saw 7 million visitors from Russia in 2019 with the number dropping to about 2 million in 2020.
“The profitability margin is going to be very low,” Fischer said. “It’s just going to be to survive for the next summer.”
Fischer believes that Egypt will have a worse experience than Turkey since Ukraine is its number one source of tourism.
“It’s going to make a major dent in tourism numbers,” he said.
The industry already was badly hurt after Russia suspended flights to Egypt following the crash of a Russian passenger plane traveling from Egypt to Russia in 2015, that killed all 224 passengers on board.
A group connected to the Islamic State claimed responsibility for the crash.
It’s going to make a major dent in tourism numbers
Turkey was dealt a similar blow from Moscow last year when Russia halted flights to the country, stating the decision was due to increasing cases of COVID-19 in Turkey.
The decision was announced two days after a meeting between Turkish President Recep Tayyip Erdoğan and Ukrainian President Volodymyr Zelenskyy in Istanbul.
Even if Russian tourists decide to travel, their destination country will unlikely be able to gain the same financial benefit as in previous years.
Kerim Has, a Moscow-based political analyst focusing on Russia and Turkey, told The Media Line that the sanctions against Russia and the currency crisis that has followed means its citizens will increasingly travel within their own country and those who go abroad will not be able to spend as much as did in the past.
“Purchasing power of Russians is decreasing, it’s getting worse and worse because of the sanctions,” he said.
Another obstacle is that Visa and MasterCard have banned credit cards issued by Russian banks from being used abroad.
In addition, there are not enough flights from other countries to Turkey to substantially increase the number of visitors and offset the decrease from Russia and Ukraine.
But Turkey could end up benefiting from Russians using the country as a key transit point, since Russians are not required to have visas to enter Turkey and Ankara has not closed its airspace to Russia, unlike many Western countries.
“The mix of tourists in Turkey is more balanced than Egypt so they will be able to cover some of the tourism,” Has said.
An opportunity to help boost tourism could come when Erdoğan meets with Israel’s President Isaac Herzog on Wednesday, the highest-level visit from an Israeli official in eight years.
Fischer believes Turkey will become more reliant on other European countries and Israel to make up for some of the loss of tourism from the war in Ukraine.
He added that while Arab Israelis continued visiting Turkey throughout its fraught relations with Israel, Turkey would have to work hard to attract Jewish Israelis.
Ankara has been attempting to warm relations with several countries due to Turkey’s struggling economy, which has seen the official inflation rate climb up to 54%, placing more domestic pressure on Erdoğan.
“Turkey needs the tourism like a breath of fresh air because of the financial crisis,” Fischer said.
With the country’s currency plummeting in value, costs for businesses will increase, ranging from electricity to alcohol.
Fischer said one option for Turkey to boost tourism numbers would be to allow Israeli airlines to carry out security checks, which they are required to do for passengers heading to Israel; this would allow those airlines to once again fly to Turkey.
He warned that while Turkey could increase its numbers from Europe and Israel, it won’t be enough to replace Russian and Ukrainian tourists lost due to the war.
“It’s going to make a major dent in tourism numbers,” he said.