Last year Trip Advisor listed Istanbul as the must see location of the year (2014). With the promotional work done on Trip Advisor the world is still seeing a decline in tourism to Turkey from Western Countries. One of the biggest factors though for the market for those looking to tour Turkey has been the significant devaluation of Russian currency with regards to the global currencies of the Dollar and Euro.
The fall of the Russian Rubble has influenced the market and although the WTTC projects a steady growth of income with regards to the Turkish nations GDP and the Travel industry in Turkey this year seeing some difficult circumstances in the media, with regards to the difficulties in neighboring countries and the somewhat disheartening news of wars and refugees.
Russian Ruble Issues lend to decreased tourism intake in Turkey.
Small Businesses Take on Tour Turkey Issues
These influences we believe have skewed the projections regarding tour Turkey statistics. Some smaller businesses can easily see the decrease in sales. Some have seen a direct drop in their tours sold and can attribute most cancellations of tours that would have sold in the past few years to media induced fear.
The upside for the international is that the services and goods available in Turkey are decreased in price. The dollar price for all forms of goods and services are relatively cheaper than they were last year and now is the best time for those who receive their salary in dollars to purchase services in Turkish Lira rates. It may be best for you to consider purchasing tours in country with dollars brought into the country in cash. There could be a lot more to do in the near future for those looking to visit Turkey at a lesser price with greater services.
Bargain hunters in the tourism industry are often looking for different kinds of services packaged and then resold at a bargain but sometimes it’s better to look at the individual prices and their price reduction. Often times the packagers of tours are dealing with the devaluation of their own currency and yet selling to outside groups turns the previous profit margin into a great opportunity for being the operator of a tour, this is why you have to follow the two lines of the chart what the approximate value is of a service in dollars and then compare the value of what a dollar can buy you at McDonald’s in a given country. There was actually an index created for this in the late nineteen eighties that they called the Big Mac Index.
You can read more about the Big Mac Index in our future post on the Big Mac Index. I hope you’ll take the time to read that as it is a great little tool to decide whether things are being overpriced or currencies are being overvalued in the global economy. In short if a local isn’t willing to pay the amount in dollars that you’re paying for a good in dollars (after exchange) then why should you pay that sum on a good or service.
The only problem is that some countries and regions put greater value on certain goods because of their scarcity or the community’s applied value in social status or stigma in purchasing. A McDonald’s Big Mac may menu in Turkey costs you 15.95 TL with an exchange rate of 2.91 TL : $1 . This means that the dollar value of that Big Mac meal should be that the price of the same meal in the US should be roughly the same as what you get from dividing 15.95 by 2.91 ($5.48). Presently you’re paying closer to $7.85 for a Big Mac Meal in New York State.