Turkey’s foreign arrivals data showed growth on an annual basis for the second consecutive month in May, with the return of Russian tourists to the country in the wake of the Ankara-Moscow rapprochement very much driving the expansion. The number of European tourists choosing to holiday in Turkey, however, continued to dwindle.

Overall, Turkey’s tourism tally rose by 16% y/y to 2.89mn vistors in the month following up on the first annual growth recorded since July 2014 in April, tourism ministry data showed on June 29.

However, the April and May figures still trailed the 2015 figures for the same months, although they did outperform the given monthly totals registered in 2016.

Turkey experienced a general and dramatic decline in arrivals during 2016 as anxieties spread over a rash of terrorist attacks and Russia placing restrictions on charter flights to Turkish airports after falling out with Ankara over the shooting down of a Russian jet near the Syrian border in November 2015. The International Monetary Fund estimated that the substantial reduction in arrivals took a percentage point off GDP growth in the year.

Across January-May, a total of 8.76mn foreign tourists visited the country, a 6% increase on a year ago, thanks to the April and May growth.

In April, the number of Russian tourists jumped by 1,384% y/y to 608,472, while across the first five months of the year 928,376 Russian tourists arrived in Turkey, up 572% compared with the same period of 2016.

The spike in the Russian tourist visitor rate reflected the positive effects of the Ankara-Moscow rapprochement process launched last summer. Russia was Turkey’s number one foreign tourist source both in May and in January-May.

Data also showed that the number of European tourists visiting Turkey fell by 20% y/y to 1.12mn in May and declined by 17% y/y to 3.44mn across January-May.

The average hotel occupancy rate for Turkey’s hotels stood at 53.8% across January-April this year versus 50.8% in the same period of last year, while the average daily room rate declined to €59.04 from €77.02, according to the latest data from the Hotels Association of Turkey (TUROB).

Over January-May, foreign tourist arrivals from the Middle East rose by 20% y/y to 965,409, a total equivalent to an 11% share in total arrivals.

TUROB is forecasting an increase of around 4-6% y/y in Turkey's 2017 arrivals from the Middle East. Last month, the latest annual Global Muslim Travel Index showed Turkey dropping one spot to fourth place.

Turkey’s foreign tourist arrivals figure saw its peak point of 36.8mn in 2014. That figure slipped 2% y/y to 36.2mn in 2015 due to rising security threats. The unfavourable trend sharpened to a 30% y/y fall in 2016, bringing total arrivals to 25.3mn. The 2016 figure was the lowest experienced since 2007.

Turkey’s tourism revenues plunged 17.1% y/y to stand at $3.37bn in Q1 this year. Tourism revenues help the country finance its large current account deficit. The government is targeting $23.5bn in tourism revenues for this year.

“Turkey is projected to expand by 3.5% in 2017, supported by accommodative fiscal policy, and by 3.9% in 2018 as uncertainty abates, tourism recovers, and corporate balance sheets mend,” the World Bank said in the June 2017 edition of its Global Economic Prospects report, published on June 4.

The weakened outlook for Turkey and the Southern and Eastern Mediterranean (SEMED) region somewhat reflects security and geopolitical risks and the related drop in tourism receipts and investment, the European Bank for Reconstruction and Development (EBRD) said on May 10 in the latest edition of its Regional Economic Prospects report.