Turkish PM announces plan to bolster beleaguered tourism sector

ANKARA (Reuters) - Prime Minister Ahmet Davutoglu unveiled a plan on Monday to support Turkey’s tourism sector, hit by tensions with Russia and domestic insecurity, including a 255 million lira ($87 million) grant and a facility to allow tourism firms to restructure debt.

Turkish Prime Minister Ahmet Davutoglu addresses the media in Ankara, Turkey February 20, 2016. REUTERS/Umit Bektas

Turkey is especially popular with German tourists, but has seen demand fall after a suicide bomber killed 10 Germans in Istanbul in January. Russians have meanwhile been told to stay away by Moscow after Turkey shot down a Russian jet near the border with Syria last October.

Tourism finances more than half of Turkey’s current account deficit, based on figures from 2014, which is seen as one of the country’s biggest economic weaknesses.

Turkey faces multiple security threats. It is part of the U.S.-led coalition fighting Islamic State in neighboring Syria and Iraq, and has seen suicide bombings in towns including Istanbul and Ankara over the past year blamed on the group.

It is also fighting a renewed conflict with the outlawed Kurdistan Workers Party (PKK), a Kurdish militant group pushing for autonomy in the southeast, and has been shelling Syrian Kurdish militia fighters across the border.

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A group linked to the PKK claimed responsibility on Friday for a car bomb attack in Ankara last week which killed 28 people, most of them soldiers.

Davutoglu said he expected Russia tourists, who favor southern beach towns such as Alanya and Antalya, to keep coming to Turkey, despite their government’s stance.

Tourism revenues in Turkey dropped 14.3 percent in the final quarter of last year. Full-year tourism revenues fell 8.3 percent, according to the Turkish Statistics Institute.

TUI, the world’s largest tour operator, this month reported a 40 percent drop in summer bookings to Turkey due to safety concerns.

Eight cruise companies - MSC, Costa, Thomson, Aida, Crystal, Norwegian Cruise Line, Oceania Cruises, Regent Seven Seas Cruises - have canceled cruises to Turkey because of security concerns, according to the Chamber of Commerce of Izmir, a coastal district.

Reporting by Ercan Gurses, Orhan Coskun and Daren Butler, writing by Dasha Afanasieva; Editing by Nick Tattersall