The plunge in value of Turkish lira could spark a surge in late bookings to the country this year.
Lira dropped 13.8% against the dollar on Friday and a further 6.3% on Monday before rebounding 6% on Tuesday amid Turkey’s trade row with the US. The pound was up as much as 89% on the lira against August last year and 37% up on last month.
Shares in Tui dropped 53p to £15.13 before recovering to be 39p down on Monday. Shares in On the Beach fell 4.1% on Monday while Thomas Cook’s shares lost more than 3p, dropping to under 84p on Tuesday morning. Jet2holidays parent Dart Group’s shares fell 1.76% to £9.48.
Alan Bowen, legal adviser to the Association of Atol Companies, said: “I’m not sure why the stock market thinks this is terrible news [for operators]. They will sell more holidays and, if they contract hotels in lira, they’ll be quids in.” He said operators contracting hotels on an ad-hoc basis could enjoy rock-bottom last-minute rates given lira’s slump.
Steve Endacott, chairman of Teletext Holidays, predicted a “mini-boom” for adult-only self-catering holidays this autumn, adding that hotels would offer room nights for £1 to get customers with higher purchasing power in to spend at bars. “It makes the UK market more attractive to hoteliers,” he said.
Alistair Rowland, group general manager, specialist retail, at Midcounties Co-Operative Travel, said: “Short-term, bargain-hunters will spot the opportunity. There’s stock available in the lates in Turkey and it will probably sell faster than the Western Med.”
But he warned that, mid-term, economic gloom within Turkey could force hoteliers to up their prices of imported goods, such as premium drinks.
Akin Koc, managing director of Turkey specialist Diamond Sky Holidays, added: “Turkey was already offering excellent value for money compared to rival countries in the Eurozone, but now even this has reached in incredible level.” He added that Turkey’s travel industry was “looking forward with optimism as holiday makers look to take full advantage of the great value Turkey has to offer”.
Listed companies were buoyant. A Tui spokesman said: “Despite the current exchange rate, Turkey continues to deliver strong growth.”
A Thomas Cook spokesman said its Turkish hotels were contracted in sterling, meaning the company had not felt the effect of lira’s slump.
On the Beach said Turkey, its fifth most popular destination, has seen the biggest increase of any destination this year and searches were up 10% in the last four weeks.
“Turkey has always offered great value for money for British holidaymakers and with the strength of the pound against the lira at the moment, holidaymakers heading to Turkey will see in-resort costs are much cheaper than in recent years,” said marketing director Alan Harding.
Lira’s fall comes as industry analyst Forward Keys found UK leisure bookings to Turkey increased 66.4% on last year.