Serdar Erkılıç is a Director at the CBRT.
Demet Şenoğlu is a Central Bank Specialist at the CBRT.
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Tourism revenues are vital to Turkey’s current account balance. Latest data suggest a relative rebound in tourism for 2018. Tourism (travel) revenues amounted to USD 25.2 billion in 2018 while the number of visitors totaled 45.6 million, with 38.9 million international visitors and 6.7 million non-resident Turkish citizens (Chart 1). To provide a better analysis, we inquire into inbound tourism, broken down by country of origin and visitor profiles, and expenditure items generating tourism revenues.
How to calculate tourism revenues
Internationally established methodology and standards provide the conceptual framework for tourism statistics. The following equation shows how to calculate a country’s tourism revenue and expenditure for a certain period:
Nevertheless, there can be national differences as to how data are collected. These range from official records obtained from border or passport controls to tourism surveys, data from mobile phone operators, credit card records, big data sources, and mirror statistics.
In Turkey, data on tourism revenue and expenditure are gathered by the Turkish Statistical Institute (TURKSTAT) from arrival and departure figures collected at air, sea, land and rail border control points and surveys conducted every three months at these borders. The “Departing Visitors Survey (DVS)” is used to calculate revenues while the “Incoming Citizens Survey (ICS)” is used to calculate expenditures. The Central Bank and the Ministry of Culture and Tourism are other stakeholders involved in collecting tourism statistics.
The data used in this study are based on countries of origin, visitor profiles, individual and package tour spending, DVS results and TURKSTAT’s quarterly Tourism Statistics.
Where does Turkey stand in world tourism?
The answer lies in tourism arrivals and tourism revenue. Although Turkey ranks eighth worldwide in tourism arrivals (Table 1), it stands 14th in tourism revenues (Table 2).
Among the countries listed above, China, Mexico, Turkey and Greece saw the lowest average expenditure per visitor. This explains why these countries rank low in revenues despite receiving relatively higher numbers of visitors.
International inbound visitors by country and their spending habits
About one-third of inbound visitors arrived from Russia, Germany and Bulgaria, in that order (Table 3).
Australia, Canada, Japan, the US and Spain recorded the highest expenditure per visitor while the lowest expenditure per visitor was found among visitors from Georgia, Bulgaria, Greece, Ukraine and Russia.
There’s a widespread belief that tourism revenue is generated by foreign visitors. The truth is that, with data based on “place of usual residence”, tourism revenue includes expenditure by non-resident Turkish citizens visiting Turkey.
The average expenditure of non-resident citizens is much higher than that of foreigners (Chart 2). However, there has been some downtrend over the past few years.
How do visitors spend their money?
Individual and package tour expenditures account for about 80% and 20%, respectively, of Turkey’s total tourism revenues (Table 4 and Chart 3). These percentages have been flat for years.
Cyclically speaking, package tour spending is the highest in the third quarter, i.e. peak season, as expected, and lowest in the first quarter, i.e. off season (Chart 3).
Highlights of the breakdown of individual spending include food and beverages (26.7%), accommodation (15.6%) and local transport (8.3%). If provided by domestic air carriers, international transport (11.6%) is another spending item (Chart 4).
Accounting for the largest share of expenditures with 31.5%, the other goods and services item is broken down by size into: clothing and footwear (44.1%); jewelry, gold, silver, personal care products, and other spending for the repair and maintenance of the dwelling (26.4%); souvenirs (24.2%); and carpets, rugs etc. (5.3%) (Chart 5).
In conclusion, the country of origin and the profile of inbound tourists as well as data on spending items that generate tourism revenue are key to analyzing tourism trends, identifying a target market and proposing better policies. As a major component of Turkey’s current account balance and international services, travel revenues point to a record-high number of tourists for 2018 that jumped by double-digit percentages, but a relatively smaller growth in tourism revenues. The fact that countries sending the most visitors to Turkey are among the lowest spenders weighs heavily on Turkey’s tourism revenues.