Turkey reveals plan to boost tourism sector

Turkish PM unveils new action plan aimed at bolstering tourism sector amid array of regional complications

Turkish Prime Minister Ahmet Davutoglu on Monday announced a financial support package for the tourism sector, which has been shaken by geopolitical tension in the region.

In the press conference held to announce a “2016 Tourism Action Plan”, Davutoglu said that there would be numerous advantages and support schemes ranging from grant-in-aid to long-term loans for tourism companies.

“We will provide to our industry 255 million Turkish liras ($86 million) of grant-in-aid within action package,” Davutoglu said. “We are also delaying the sector’s debt payment of 288 million Turkish liras [and implementing] a right to extend the maturity date of payments to three years.”

The action plan also offers a $6,000 subsidy per flight for tourism agencies from what is known as the “Group A” between April 1 and May 31. “Group A” tourism agencies can offer tickets for all types of transportation as well as arrange tours.

Moreover, accommodation and sea tourism facilities such as boat tour companies and entertainment venues that generate foreign exchange earnings of more than $750,000 last year, will benefit from advantages generally offered to export companies. The threshold was $1 million last year.

Davutoglu added that a spare budget allowance would be used for these financial aids, and that this would not constitute an additional burden to the economy.

“There is no reason to panic with regards to tourist numbers; precautionary measures are being taken,” Davutoglu said. “We already provide support to the tourism sector. I do not expect any contraction in the tourism sector.”

Tourist numbers of Turkey have seen steady declines since August last year. The slip in numbers has further deepened after Turkish fighter jets downed a Russian warplane that had violated Turkish airspace.

The number of tourists coming to Turkey dipped by 22.6 percent in the last quarter of 2015 year-on-year to 8.11 million while tourism revenue slipped 14.3 percent to $6.57 billion.

The main driver of the decline was the fall in the number of Russian tourists. After the fighter jet incident, Moscow imposed various sanctions in numerous areas including tourism.

According to data from the Turkish Culture and Tourism Ministry, Russian tourist numbers have declined by18.5 percent in 2015, compared to previous year, to 3.65 million.

In October, just before Russia imposed sanctions, the ratio or Russian tourists in overall numbers was 7 percent but in December, it was down to 1.7 percent.

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