Inflation has been particularly high in Turkey for some time. In addition, the local currency has been weakening against the euro and the US dollar for some time. Both circumstances could become problematic for tourism.

The weak Turkish lira was actually very good for vacationers, because the more local currency they got per euro, for example, the better. Prices in Turkey have been stable for a long time and have only increased slowly. That's exactly what has changed, because the inflation rate is around 67 percent. Week after week, month after month, day after day, everything is becoming more expensive in the state led by Erdogan. The fact that the Turkish lira are quite weak can no longer compensate for this, as this can no longer compensate for the sharp rise in domestic prices.

So far, the rather weak currency has been an advantage for tourists because they have received more Turkish lira per euro. At the same time, prices in local currency have been more or less stable and have only increased slowly. But that is no longer the case. The key interest rate set by the Turkish National Bank is also at an absurd level: it was recently increased to an impressive 45 percent.

The government repeatedly raised the minimum wage due to the ever-increasing prices for everyday goods. In some cases this is increased significantly every month, but the employees only benefit from it a little, as the costs have continued to rise in the meantime and the “wage increase” is defacto devalued. This has been going on for several years and all factors added together have led to an inflation rate of 67 percent.

This is now causing increasing concern for the tourism companies, hoteliers and airlines operating locally. Turkey continues to position itself as a cheap holiday destination, but there is increasing pressure to be able to fulfill this “promise”. In some cases, there are considerable problems in being able to provide the long-term room rates agreed with tour operators in an economically viable manner. It is not uncommon for hoteliers to pay extra because of runaway inflation. Potential customers are also noticing the fact that the “equivalent” of package holidays has become exorbitantly more expensive and the former currency advantage no longer exists, because the prices in local currency are rising faster than the devaluation of the currency.

However, people in Turkey are still confident that they can manage an economically successful summer season in 2024 due to the very high demand from holidaymakers. Nevertheless, people are also preparing for the fact that high inflation could lead to problems and that demand could therefore be dampened. Since domestic prices continue to rise sharply, no one is currently daring to predict how things will develop by July 2024. However, holidaymakers can hope that the lira exchange rate against the euro could develop further in favor of the euro.