Turkey - Tourists arrivals by country

The tourism sector’s outlook remains uncertain, as MNCs look at the industry as a source of potential opportunity this year

MNCs continue to face a highly volatile pricing environment in Turkey. Companies will need to readjust volume and market share expectations as they continue price hikes. Adapting talent retainment strategies, adding flexibility into the budget to continue providing salary increases, prioritizing customers and partners with strong financials, and using Turkey assets (both local teams and manufacturing capacity) for the broader region, while focusing on resilient pockets of opportunity through targeted strategies are critical for winning in the market this year. 


• The Turkish lira depreciated over 10% between late April and late May.

• The agriculture producers’ price index increased 118% YOY in April, while the foreign producer price index grew 97.1%. 

• Consumer confidence dipped to an all time low in April 2022, hitting 67.3. It remained equally low in May at 67.6. 

• Tourist arrivals increased 225% YOY in April 2022, bringing the first four month’s average increase to 172% YOY. 

• House sales to Russian citizens grew 110% between March and April 2022, and 187% between April 2021 and April 2022. House sales to Ukrainian citizens grew 56% between March and April 2022, and 186% between April 2021 and April 2022.

Our View

The Turkish lira faces strong pressures in H2 2022. The US Federal Reserve’s monetary policy tightening is causing strong dollar appreciation; a higher global risk environment is pulling funds away from riskier emerging markets; negative real interest rates and uncertain policymaking are fueling further inflationary pressures; and confidence in price stability is at an all-time low in Turkey. FrontierView expects inflation to average 60–65% in 2022. The exchange rate is likely to average above TRY 16.5 to US$ 1 (rather than the TRY 15.5 originally forecasted for the year) due to the additional inflationary and political pressures stemming from Russia’s Ukraine invasion. This average would entail an above TRY 17 average in H2 2022.

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