Why Turkey's currency crisis means ultra-cheap holidays for Britons

Turkey has become extremely cheap for British holidaymakers visiting over the next few weeks, with the pound now buying nearly twice as much lira as this time last year.

The Turkish currency slid to record lows on Monday as the country suffered the effects of rampant inflation and concerns mounted over deteriorating relations with the US, meaning travellers could get nearly nine lira to the pound compared to 4.5 last August.

The currency has nosedived since January, losing a third of its value against the US dollar.

What does it mean for British travellers?

While the slump in the value of the lira does not mean the cost of package holidays will fall instantly, the favourable rate affords Britons an extra ￡236 worth of the local currency for every ￡500 exchanged. The pound is 89 per cent up on the lira compared to August last year and 37 per cent up compared to last month.

“While package holiday prices are unlikely to be directly affected this summer, holidaymakers will find that the cost of eating out, shopping and excursions are significantly lower,” said Nick Trend, Telegraph Travel’s consumer editor.

“Independent travellers who pay for their accommodation on arrival will also do well, and tour operators should be able to negotiate much more competitive deals on hotels and villas for next season.”

Ian Strafford Taylor, CEO of travel currency experts FairFX, said anyone travelling to Turkey in the near future should purchase a prepaid currency card to guarantee the current rate.

Turkish Lira against the US Dollar

How bad is the currency slump?

As you can see from the graph above, the spike in the number of lira to the pound is quite severe. Five years ago, a pound was worth just three lira, and today it is nearly nine. Even last year, the pound was providing good value in Turkey, with 4.5 lira to ￡1. Compared to two years ago, the pound is up 128 per cent.

The lira, the worst performing currency in 2018, was in freefall early Monday, slipping to 9.8 per cent down against the dollar, but rallied back to 6.5 per cent.

Turkey’s financial crisis has been brewing since the start of the year but deepened in the last week amid a row between Turkey and the US over the detention of an American Christian pastor. On Friday President Erdogan urged his followers to to convert their dollars and gold into lira to rescue the currency while Donald Trump ramped up the pressure on Ankara by doubling tariffs on Turkish steel and aluminium.

Turkey's tourism numbers

What does it mean for Turkey's tourism industry?

Turkey’s tourism industry has had a difficult few years, with its visitor numbers peaking in 2014 at 41.2 million but then slumping to 25.3 million in 2016, after numerous terrorists attacks, an attempted coup and ongoing political stability.

A security drive - and a thaw in Russo-Turkish relations - led to a resurgent sector last year, with visitor numbers rising to 32.4 million. The fall in the value of the lira has also helped boost arrivals, with British travellers in particular drawn back to the country’s turquoise waters and sandy beaches.

Last week, Thomas Cook reported an 63 per cent increase in holiday bookings to Turkey this year, with Antalya overtaking Palma de Mallorca as its airline’s most-served airport for UK customers. Earlier this year, Thomas Cook said bookings to Turkey were up 84 per cent on 2017, behind only Spain and Greece.

Tui, similarly, said in July that Turkey was back on the British travel map, with only Spain and Greece ahead in terms of bookings.

Why go now | Eight reasons to visit Turkey this summer

Is it safe to visit Turkey?

Despite the slump in visitors over terror and instability fears, the Foreign Office (FCO) only advises against travel to parts of the south-east of the country, where Turkey shares a border with Syria and Iraq. The tourists resorts around the south and west coast, such as Bodrum and Antalya, have been largely unaffected.

“British nationals made over 1.6 million visits to Turkey in 2017,” says the FCO. “Most visits are trouble free. Be alert to your surroundings and remain vigilant in crowded places popular with foreign nationals, including during festival periods.”

The FCO also warns that terrorists “are very likely to try to carry out attacks in Turkey” and that “further attacks could be indiscriminate”.

“Most terrorist attacks have taken place in the south and east of the country and in Ankara and Istanbul,” the FCO says. “Attacks are most likely to target the Turkish state, civilians and demonstrations. Nevertheless, it’s likely that some attacks will also target western interests and tourists from western countries, particularly in the major cities.

“The Turkish authorities have successfully disrupted attack planning in the recent past and have said that security has been tightened in response to recent attacks.”

Linda Cookson visited the Turquoise Coast, otherwise known as the Turkish Riviera to the south-west of the country, for Telegraph Travel last year and found a country keen for the return of British tourists.

Return to Turkey: How the country is luring British families back

“Like a boomerang, I landed back on the Turquoise Coast to revisit my favourite haunts. To my joy and relief, it was as though I’d never been away. Harbour-town Kalkan was as gorgeous as ever – awash with papery clouds of pink and purple bougainvillea, crammed with atmospheric cobbled streets overhung by Ottoman balconies, and twinkling at night with its cheery chain of sea-front restaurants buzzing with smiley waiters.

“It was exactly the same in neighbouring Ka?. Late in my stay, as I sat in the town’s central tea gardens, shaded by eucalyptus trees, an elderly man I didn’t know came up to the table and pressed a blue ‘Evil Eye’ lucky charm into my hand. ‘It’s good to see you Brits back,’ he said shyly.”

Where else is the pound strong?

A recent slump in the value of sterling has made it harder and harder for British holidaymakers to get bang for their buck abroad, especially in the eurozone.

Top 10 | Where is the pound going further?

FairFX, however, researched 10 destinations around the world where the pound is performing well, with travellers to Argentina, Turkey and Brazil enjoying magnified spending power.