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14 Aug 2018

BY James Chapple

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Turkish lira crisis: Travel giants take share hit despite rebound

The crisis-hit Turkish lira rebounded 6% on Tuesday morning (August 14) - but not before shares in Thomas Cook, Tui and On the Beach all took a hit.

Turkey, beach, sun loungers

The lira is down 45% this year against the value of the dollar as Turkey struggles to manage a worsening financial crisis.

 

Shares in Thomas Cook, Tui and On the Beach were all down on Monday (August 13) as the Turkish lira crisis deepened.


President Recep Erdogan on Monday accused the US of “stabbing Turkey in the back” after it imposed sanctions on the country and doubled tariffs on Turkey’s steel and aluminium imports, sending prices tumbling further.


The crisis comes amid a resurgence in travel to Turkey from the UK after years of political tension.


The Foreign Office late last month relaxed its travel advice while both Tui and Cook have reported a sizeable rebound in summer bookings.


But while British travellers can currently get 8.40 lira to the pound, the instability brought on by the currency crisis has hit the travel industry.


Cook shares had fallen to 85.3p by close on trading on Monday, Tui £15.27 and On The Beach £4.14.


By 9am on Tuesday, Cook shares had fallen further to 83.8p, while Tui recovered to £15.36 and On The Beach £4.15.


Tui last month said Turkey featured among its five most booked destinations across 11 markets, including the UK, and ranked third for bookings behind Spain and Greece.


Turkey, meanwhile, recovered to Cook’s second most popular destination earlier this year, while its latest earnings call noted “strong customer demand for Turkey, Egypt and Greece”.


The latest FCO advice notes the country’s state of emergency has now been lifted, and advised only against all but essential travel to its south eastern border with Syria.

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