Tourism Stocks Risk in the Istanbul Stock Exchange
According to the Analysis and Translation Department of the Securities and Exchange Organization, citing Deutsche Welle, tourism is one of Turkey’s most important sources of income, accounting for about 13 percent of the country’s economy. Therefore, many companies listed on the Istanbul Stock Exchange seek to stabilize their capital inflows and outflows by relying on both domestic and foreign tourists.
Until 2020, this trend remained relatively stable, but since then, with the surge in inflation and the rise of regional insecurity, Turkey’s tourism industry has struggled with chronic crises.
According to data from the Turkish Statistical Institute, in June this year, hotel and restaurant prices increased by 36 percent compared to the same period last year. This led to around a 10 percent decline in travel bookings to Turkey through travel agencies and online portals, placing additional pressure on the tourism sector and the country’s capital market.
One of the key factors behind these conditions is the economic policy of President Recep Tayyip Erdoğan’s government. The fall of the Turkish lira against the euro and dollar has made travel to Turkey cheaper for European tourists, but it has also intensified domestic inflation. Turkey’s official inflation rate in June was reported at 35 percent, though independent experts believe the actual rate may be twice that figure.
Over the past two years, the Central Bank of Turkey has raised its benchmark interest rate to 46 percent to control inflation. While this helped curb inflation to some extent, it also increased financing costs for businesses and households and added pressure to the government’s debt burden. At the same time, heavy use of foreign exchange reserves to stabilize the lira has significantly depleted the country’s currency reserves.
In addition to economic challenges, Turkey’s economy is influenced by political developments. The arrest of Istanbul Mayor Ekrem İmamoğlu led to a sharper decline in the lira’s value, signaling the fragility of the nation’s economic environment. Analysts believe that such political uncertainties further increase the investment risks in Turkey’s tourism industry and stock market.
Despite these problems, official data from Turkey’s Ministry of Tourism remains impressive. In 2024, more than 18.5 million foreign tourists visited Istanbul, and over 15.9 million visited Antalya.
Nevertheless, this large influx of tourists has not been enough to fully restore investor confidence. Severe economic fluctuations, rising tourism costs, and declining domestic purchasing power continue to cast a shadow over the future of the capital market and the valuation of tourism company stocks.