The number of foreign tourists visiting Turkey plunged by 34.5% y/y to 2.5mn in May, the tourism ministry said on May 28.

The reading marks the sharpest decline since 1994 raising questions about the key tourism industry that generates revenues needed to plug the country’s large current account deficit. Heightened security risks and tension with Russia have been keeping tourists away since the start of the year.

It remains to be seen whether recent moves by Turkish President Recep Tayyip Erdogan to mend ties with Moscow will have the required positive effect on the struggling tourism industry. Erdogan sent a letter to his Russian counterpart Vladimir Putin, apologising for the downing of a Russian jet last year. Ankara also announced that it had reached a deal with Israel to normalise relations.

The latest data from the tourism ministry showed Russian tourist visits plunged by 92% y/y to just 41,000 in May, while in the first five months of the year only 138,000 Russian tourists came to Turkey, an 83% decline compared to the same period of last year.

“The industry could resume chartered flights within a month, and first flights may be ready to go in a week or two,” press secretary of the Russian Union of Tourist Industry Irina Turina said on June 27, TASS reported. “No other destinations may compete with Turkey in the price-quality ratio and in the level of service. We hope now for a decision towards opening Turkey,” she added.

In a further sign of Ankara’s willingness to improve its relations with Moscow, Turkey’s Prime Minister Binali Yildirim said on June 27 that Turkey would pay compensation for downing the Russian jet, if necessary.

Turkey’s feud with Israel, on the other hand, do not seem to have any significant impact on the tourism traffic between the two countries. The number of Israeli tourists increased by 28% y/y to 19,000 in May and Turkey hosted a total of 79,600 Israelis in January-May, a 37% y/y increase. Last year, 225,000 Israeli citizens visited Turkey, up 19.1% from the previous year.

Across the first five months of 2016, overall foreign tourist visits declined by 23% y/y to 8.3mn, reflecting a 33% y/y decrease in European tourists. Even if Turkey’s diplomatic charm offensive proves successful, it remains to be seen whether it will be enough to save tourism industry unless Europe’s economy picks up. The British vote to leave the EU has drifted Europe towards into uncharted waters and the world markets are now bracing for more volatility amid Brexit that will have repercussions for Turkey’s $720bn slowing economy.

Turkey's Foreign Tourist Arrivals
	May-16	Share (%)	May-15	Share (%)	y/y
Germany	427,219	17.19	623,685	16.39	-31.50%
Georgia	229,086	9.22	192,679	5.06	18.90%
UK	219,277	8.82	310,840	8.17	-29.46%
Others	1,609,829	64.77	2,676,954	70.37	-39.86%
TOTAL	2,485,411	100.00	3,804,158	100.00	-34.67%
	Jan-May/16	Share (%)	Jan-May/15	Share (%)	y/y
Germany	1,157,235	13.94	1,553,114	14.42	-25.49%
Georgia	844,038	10.17	665,421	6.18	26.84%
Iran	693,641	8.36	656,164	6.09	5.71%
Others	5,607,019	67.54	7,896,946	73.31	-29.00%
TOTAL	8,301,933	100.00	10,771,645	100.00	-22.93%
source: tourism ministry