In the wake of a strong performance in the tourism sector in 2008 (but lower growth than in 2007), thetrend of weaker quarterly growth in the number of foreign visitor arrivals during the course of last yearturned sharply into negative growth in Q109. However, the most recent data for the Q209 record a smallrise in foreign arrivals (excluding Turkish citizens residing outside the country) of just over 2% comparedwith the same period a year earlier. This followed a fall in foreign visitor arrivals of about 2% year-onyear(y-o-y) in Q109.
Hospitality
Latest hospitality sector data for the second quarter of 2009 show the total number of foreign anddomestic tourist room nights amounted to 67.8mn nights, an increase of just over 5% y-o-y. Foreigntourist room nights - almost 78% of the total - rose by 9% y-o-y to 52.6mn nights in Q209. This followsa similarly strong 10% y-o-y increase in the number of foreign tourist room nights in Q109, to 31.1mnnights. In both quarters, growth in room nights attributed to foreign tourists was particularly favourablegiven the weak performance of foreign visitor arrivals over the same period.
Forecast Scenario
BMI maintains the view that foreign visitor arrivals will record negative annual growth this year of 3%,which is largely unchanged compared from our previous forecast (-3.5%). Although the anticipated fall invisitors is relatively small, particularly compared with forecast declines in regional competitor countriessuch as Greece and Croatia, it is a sharp deterioration on the growth achieved during 2008. Modestrecovery in foreign arrivals should take place next year. The background to these forecasts is the severeeconomic conditions this year in Turkey’s major source markets, including the eurozone - especiallyGermany - Russia and the UK, followed by modest economic recovery in 2010. The weakness of theTurkish lira against the US dollar and the euro, as seen in 2008, which assisted the competitiveness ofTurkey’s tourism sector, is forecast to be reversed from H209 onwards. This is likely to dampen therecovery in growth of visitor arrivals from next year.
Turkish Airlines
Turkey’s national airline, Turkish Airlines (THY), achieved a more than favourable performance in thefirst seven months of this year, with passenger numbers up nearly 10% y-o-y to 13.7mn (internationalbusiness class traffic was up slightly y-o-y, while there was buoyant growth in transit passengers). As partof an ambitious expansion programme announced towards the end of 2008, THY said in June it will buy10 planes from Airbus (A330s) and seven from Boeing (777-300ERs).
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