Last week was bloody in Turkey, as two explosions have ripped through the most important cities in the country. On Sunday, March 13, a Kurdish separatist group launched a suicide attack on Ankara, killing 37, and six days later, an ISIS bomb killed at least four people in the Taksim district of Istanbul. It was but the latest bloody chapter in what is becoming a brutal double insurgency—and tourists are taking note. The Wall Street Journal reports:
Bookings for this summer are down 40% from last year, and hotel occupancy rates have plunged more than half, according to industry figures. Hundreds of hotels, bed-and-breakfasts, and boutique resorts have been put up for sale.[..]
The industry accounts for more than 4% of Turkey’s gross domestic product and employs more than one million people, or about 7% of the working population, according to government data.
Tourism revenues tripled between 2001 and 2014, reaching a record $34.3 billion. In 2012, Istanbul joined the world’s top-five tourist destinations, according to the MasterCard Global Destination Cities Index.[..]
Tourism was one of Turkey’s few bright spots in recent years, as growth in the overall economy slowed to about 3%, from an average of 5% the preceding decade.
But last year, revenues contracted for the first time since 2010, shrinking 8% to $31.5 billion. Tourism revenues in January fell at an even faster pace, dropping 19% from a year earlier, according to central-bank data released March 10.
Fewer visitors could exacerbate Turkey’s current-account deficit, since tourism is a key a source of foreign currency. “The escalation in terrorist attacks and its repercussions on tourism revenues constitute the main challenge for Turkey’s external balances this year,” said Yarkin Cebeci, an economist at J.P. Morgan Chase.
Turkish tourism was already feeling the effects of Russian sanctions; it had been a popular spot for Russians seeking time in the sun for a few years now, right up until the Turks shot down a Russian jet in a standoff over Syria this winter. Now it seems that on security grounds, Westerners will be staying away too.
The Turkish economy has been showing signs of trouble for a while now, so we expect this to hurt even more than it usually would. Furthermore, the economic troubles combined with the security situation both spell a likely increase in authoritarianism from the Turkish government.
This post has been edited and updated since it was first published.