World Economy

Financial Problems Cause Sale of Turkish Tourism Firms

Financial Problems Cause Sale of Turkish Tourism Firms Financial Problems Cause Sale of Turkish Tourism Firms

A total of 30 companies operating in the tourism sector and on the verge of bankruptcy have been sold to new owners. This was due to a decline in the number of tourists visiting Turkey causing huge economic losses to the firms and in turn creating unemployment, the Resort magazine said in its July edition.

According to Resort, the ownership of 30 tourism companies, mostly operating in coastal provinces, changed hands over the last five months due to financial difficulties. In comparison, the total number of tourism firms that went into deep financial trouble last year was 14, Today’s Zaman reported.

Problems in the tourism sector have been caused by a 30% drop in Russian tourists visiting Turkey this year due to economic crisis sparked by sanctions imposed by western countries.

The president of the Union of Mediterranean Hotel Owners, Yusuf Hacisuleyman, told the magazine that the bankruptcy of companies incurred a loss of $5 billion to the economy and precipitated a rise in unemployment.

Fehmi Kofteoglu, a senior executive at Ekin Group, a fair organizer, said that if the current trend continues in the tourism sector, there will be an explosion in the number of bankrupt firms.

Turkey Hoteliers’ Federation Chairman Osman Ayik told Resort that the crisis in the tourism sector is the deepest in recent years and has led to an unprecedented number of layoffs.

 Greece Offers Discounts

Greece is also facing the same problem. In order to keep revenues up, companies are offering steep discounts and encouraging tourists not to cancel their trips.

Greek newspaper Kathimerini is reporting that some tourism companies are offering up to 50% off on pre-packaged holidays to Greece in attractive European markets whose consumers may be hesitant to visit the island.

Turkish newspaper Hurriyet, which notes that Turkish tourists have been among the world’s most loyal to Greece, estimates that around 50,000 tourists have canceled trips to Greece since June 25, when the government of Prime Minister Alexis Tsipras made clear his state would not be able to make its monthly debt installment to the European Union and International Monetary Fund.

Hurriyet also spoke to cruise operators, who said they had witnessed a 60% decline in demand for voyages to Greece.