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The Russian downturn and the Ukraine have a dramatic effect on the tourism in Antalya Turkey.
Wednesday, 27th May 2015
Source : Joseph Fischer ~ Exclusive for 4Hoteliers.com

Exclusive Views: If you would have had asked a year ago any large hotelier or incoming tour operator in the Antalya region for their forecast for the 2015 season, the picture would have been rosy; 

A year later, and the only wish the tour operators and hoteliers have is to see the end of this tourism season.

Clearly, not only Turkey was affected by this situation. Greece, Bulgaria, Cyprus, Egypt, Israel , the UAE and also far destinations like Thailand took a hit.

The country that took the brunt of the tourism crisis was Turkey and especially the Turkish Riviera region of Antalya.   

The latest headlines of the main Turkish newspapers read:

Today Zaman Newspaper: "Declining number of Russian tourists to impact nearby sectors in Turkey. Amid a serious decline in Russian tourists coming to Turkey, adjacent sectors will also feel the brunt of this turndown, according to industry experts"

Hurriyet Daily News:  "Hotel revenues hit as tourist eschew Antalya"

Hurriyet Daily News: "Antalya sees12.6 pct. Decline in tourists" 

These headlines don’t actually show the real picture which is far more complicated.

In 2014, one of every 3 tourists to the Antalya region was a Russian citizen.  About another 10% of the visitors came from the Ukraine.

The first four months of 2015 showed a dramatic drop of 40% in the numbers of Russian tourist arrivals to Antalya. In my most recent visit to Antalya I was told both by hoteliers and tour â€" operators working with the Russian / Ukrainian market that the current occupancy rates are about 30%-50% in most clubs and hotels. 

To understand the huge economic significance of the Antalya region on the Turkish economy this figure is the essence of it all.

The Antalya region generates 34% of Turkey's gross tourism revenues.

The immediate reaction of some of the hoteliers to the crisis was dropping the prices, but I am sure lower prices won't bring the Russians back. The problem goes deeper, much, much deeper.

In the last 12 months, 25 large and medium Russian outbound tour operators went bankrupt. Several Russian airlines also closed down and the rest are in financial difficulties. The main reason for this is the economic crisis that hit Russia, which was a result of the West's, namely the EU's and the US's imposed hard economic sanctions.

The Russian Rubble was devalued and people have much less money to spend on travel.

At the same time, the Russian government is trying to 'push' its citizens to have their holidays in "Mother Russia"- in Sochi and Crimea to show their support and patriotism. It goes even beyond: The government subsidizes government sector workers (Teachers, Police, Civil servants) holidays in Russia.

Russians have lost most if not all trust and confidence in the stability of their outbound travel sector. It is a huge psychological barrier.  Most holidaymakers are rather reluctant to make any down payments to the tour operators simply because they are afraid that those companies will go bankrupt before or during the time they will be on holidays.

This has a "domino effect" on the tour operators. They cannot charter the aircrafts or pay deposits to the hotels to guarantee the rooms in advance.

Hoteliers alone cannot change this unfortunate situation. They need the government to make some moves. One suggestion is to have those Russian holiday makers that are paying for holidays in Antalya this summer to be covered by a Turkish government "insurance" that would secure their payments and holidays in case of a bankruptcy of the Russian operator.

It sounds difficult but in practice it's easier than it sounds. There are only six major Russian tour-operators that control 80% if not more of all the market. Pegas,  Tez Tour, Biblo Globus, Anex  and Intourist. 

The insurance should cover the two critical elements of the package: Hotel accommodations and flights.

The other move that should be taken is to look for "last minute" business to cover for the loss of the Russian tourists. This is not easy especially due to the fact that the large majority of the European holiday makers already decided their upcoming summer holiday destinations. Getting additional charter flights diverted requires planning and permits.

Clearly the number one market for Antalya was and will be Germany.  other western European countries such as Sweden, Finland , Italy, the UK, Holland and Belgium make up the lion's share of the market.

Countries such as: Poland, Hungary, Czech Republic, Serbia Croatia, UAE , Iran might be able to make a difference, and also getting the Israelis back to Antalya (which has to do more with the politics between Turkey and Israel) . It is time for marketers to move away from 2-3 strategic markets focus to a more dynamic customer mix. 

One key element that is being avoided by the Turkish government is the houses being bought by foreigners in the Turkish Riviera. According to the Anadolu News agency â€" Turkey's official news agency, only in the region of Alanya, foreigners own 35,000 houses.  In the whole region of ANTALYA the numbers are at around 100,000 houses owned by foreigners. A large part of those houses go into the overall holiday circulation and are being rented out to tourist which adds up to growing competition. Some families prefer renting houses for lower prices and have a longer and cheaper vacation.

Another key element which is being disregarded by the Turkish government is planning and regulating new built hotels. This summer season will see an additional 30,000 new hotel beds joining the existing stock. The government should have prevented the opening of new hotels this summer.

New hotels opening up mean putting additional pressure on the already trembling hotel prices. This, in turn, might result in a drop of service and possibly even bring hotels to a state of bankruptcy at the end of the summer season.  

Too many new hotels opening up in an already slowing market will result in a price war and service decline which will affect the whole market and the future of "Antalya â€" Turkish Riviera brand". 

My recommendation to the Turkish tourism authorities is to put some planning and regulation in place.

I have visited Antalya more times than I can count. In my view, the Turkish Riviera is probably one of the best Mediterranean mass tourism holiday destinations.  However, planning is required. Regulations need to be imposed in order for this destination to have a constant growth ratio for the years to come.

This is strictly an exclusive feature, reprints of this article in any shape or form without prior written approval from 4Hoteliers.com is not permitted.

Joseph - Yossi - Fischer the CEO of Vision Hospitality & Travel - international lodging & Travel Solutions

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