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Turkey reveals plan to support beleaguered tourism sector
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Turkey reveals plan to support beleaguered tourism sector

Prime Minister Ahmet Davutoğlu announced an action plan to support Turkey’s tourism sector, which has been negatively affected recently by tensions with Russia and security concerns. The support package included a 255-million-Turkish-Lira ($87 million) grant and several mechanisms which will enable tourism firms to restructure their debts. “Nobody should expect Turkey to become introverted or change its axis amid many tensions around.

Prime Minister Ahmet Davutoğlu announced an action plan to support Turkey's tourism sector, which has been negatively affected recently by tensions with Russia and security concerns.
 
The support package included a 255-million-Turkish-Lira ($87 million) grant and several mechanisms which will enable tourism firms to restructure their debts.
 
“Nobody should expect Turkey to become introverted or change its axis amid many tensions around. On the contrary, we'll open abroad more” said Davutoğlu in a speech launching the new tourism support package.
 
The sector has recently been battered amid a sharp decrease in the number of Russian tourists visiting Turkey and escalating security concerns triggered by a terror attack on Feb. 12 in Istanbul's main tourism spot, Sultanahmet, which left 12 German tourists dead.
 
TUI, the world's largest tour operator, this month reported a 40 percent drop in summer bookings to Turkey due to safety concerns, while eight cruise companies have canceled cruises to Turkey over security concerns according to the chamber of commerce in the Aegean province of İzmir.
 
“To recover the sector's losses, we will offer a total of 255 million liras of support and postpone the sector's payments at around 288 million liras [$97.6 million], spreading the repayment of their debts into installments,” said Davutoğlu.
 
These costs will be met from the spare budget of the Finance Ministry so as to not create an additional burden on the economy, he noted.
 
Tourism finances more than half of Turkey's current account deficit, based on figures from 2014, which is seen as one of the country's biggest economic weaknesses. Tourism revenues in Turkey declined 14.3 percent to $6.57 billion in the final quarter of 2015, the Turkish Statistics Institute (Turkstat) said on Jan. 29. In 2015 as a whole, tourism revenues fell 8.3 percent, reaching $31.46 billion amid the decrease in the number of Russian and European tourists.
 
“We have faced problems in the tourism sector due to the tensions with Russia and severe developments in the neighboring region. It is not good to turn out tourism as a sanction tool… We have developed nine compensating measures for our tourism players” said Davutoğlu.
 
Detailed measures
 
The first measure ensures financial support per flight for the A-group travel agencies, which bring tourists to Turkey, until May 31, without setting any limit in the number of source countries. Similar support was applied for charter flights in 2015 for only eight countries.
 
“The second measure will enable the A-group travel agencies, which attract more than 400,000 tourists to Turkey, to benefit from up to 100,000 liras in loans with the warrant of the loan guarantee fund. We increased the number of the source countries for these agencies to 26 this year from 13 in 2015” said Davutoğlu.
 
The third measure has stipulated the chance for tourism companies to restructure their bank debts if the sector contracts or there is a problem with repaying their debts, said Davutoğlu.
 
In line with a fourth measure, sea tourism facilities with the authorization of the Tourism Ministry will be able to benefit from the Economy Ministry's incentives. Any sea tourism facilities will be treated like accommodation facilities and offered incentives when they make new investments, said the prime minister.

 

Davutoğlu noted any tourism facilities which brought about more than $750,000 foreign exchanges into the country last year will be treated as an exporter, reminding that a similar measure was taken in 2009, but then the limit was $1 million. Such facilities will thus be able to benefit from the Eximbank loans, among others.
 
The sixth measure enables sector players with green certificates to pay their water, waste water and solid wastes at the lowest costs.
 
The government will also enable sector players to postpone their rent payments this year and pay them in three installments.
 
“This action plan will be realized very soon” Davutoğlu added.
 



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