Holidays despite the economic crisis: this is what Turkish inflation means for travelers

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Written By Maya Cantina

Holiday planning: Inflation and exchange rates: How expensive is a holiday to Turkey anyway?

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Monday, June 10, 2024, 8:38 am

The Turkish economy is plagued by high inflation. Financial expert Lars Erichsen explains how this affects the costs of a holiday.

How does high inflation in Turkey affect the cost of a holiday?

High inflation in Turkey has a strong impact on the country’s economy and therefore also affects the cost of a holiday. Inflation means that domestic prices for goods and services are rising. Inflation in Turkey is currently over 20%, making many products and services significantly more expensive compared to last year.

This has several consequences for German holidaymakers. On the one hand, inflation leads to higher prices for local goods and services, including food, transportation and leisure activities. In short, these effects would make holidays in Türkiye more expensive.

On the other hand, this effect is mitigated by the weak exchange rate of the Turkish lira against the euro. The depreciation of the lira means that holidaymakers receive more Turkish lira for every euro, which can partially or even completely offset the increased prices. This means that despite inflation, German tourists can often go on holiday cheaper than in many other holiday countries.

Moreover, tourists can take advantage of special offers and discounts offered by the Turkish tourism industry to maintain the flow of visitors.

About the expert

Lars Erichsen is an investor, author and financial influencer. The stock market and economics were and are his passion. For 15 years he lived exclusively from active trading on the stock exchange. Today he passes on his knowledge of investing and building wealth in the stock market and operates under the name “Erichsen – money and gold” a YouTube channel with over 150,000 subscribers and a podcast with over 200,000 listeners. More than 60,000 people read his free report every week. He regularly acts as a keynote speaker at events.

How has the exchange rate of the Turkish lira developed against the euro and the US dollar and what does that mean for German holidaymakers?

The exchange rate of the Turkish lira (TRY) against the euro (EUR) and the US dollar (USD) has changed significantly in recent years in favor of foreign currencies. The lira has lost significant value, largely due to economic uncertainties and high inflation.

For example, at the beginning of 2020 the exchange rate was around 6 TRY per euro, while in 2024 it rose to more than 20 TRY per euro. This devaluation means that tourists from the euro area and the US receive significantly more Turkish lira for their own currency than a few years ago.

For German holidaymakers, this means that their money in Turkey is worth considerably more. For the same amount of euros you can buy significantly more goods and services. This makes staying in Turkey attractive as costs for accommodation, food, transport and tourist activities remain cheap compared to many other destinations. As described above, this positive effect is partly offset by high inflation.

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What impact does the weak Turkish lira have on the purchasing power of tourists in Turkey?

A weak lira exchange rate means that every euro is worth more Turkish lira. This leads to lower relative prices for accommodation, food, transport, souvenirs and tourist activities. Even luxury goods and services that may be more expensive in other countries are more affordable in Turkey. However, travelers sometimes report significant price increases in their holiday areas. In more rural and less developed tourist areas, German holidaymakers find particularly good bargains; demand regulates prices – and they are still quite high. Despite the weak Turkish lira, holidays in Turkey have become more expensive in recent years.

How have prices in the catering and hotel industry in Turkey developed and what influence does this have on holidays?

Inflation has caused food and beverage prices to rise, which has a direct impact on the hospitality industry. Restaurants have had to adjust their prices to cover the higher costs of ingredients and operations. Despite these price increases, the cost of food and drink in Turkey remains relatively low compared to many European countries. Tourists can therefore still eat cheaply, especially in local restaurants and street kitchens.

This applies equally well to the hotel sector. Increased operating costs, such as energy, maintenance and staff, have led to many hotels having to adjust their prices. Nevertheless, Turkey remains an affordable travel destination in comparison. In order not to experience any unpleasant surprises on site, holidaymakers in Turkey are increasingly opting for “all-inclusive offers”. This can help you keep costs under control, as long as you resist the temptation to stroll around the city at night. Or you want to resist, after all, it’s not a holiday every day of the year and sometimes consuming can be fun.

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This text comes from an expert from the FOCUS online EXPERTS Circle. Our experts have a high level of specialist knowledge in their field and are not part of the editorial staff. Learn more.



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