The COVID-19 pandemic has had a significant impact on the service sector in Turkey, particularly in the tourism, hospitality, and retail industries. The government's timely response and various relief measures have helped mitigate some of the negative effects of the pandemic on these sectors. As the global health crisis subsides and the economy begins to recover, the Turkish service sector will continue to adapt and evolve to meet the changing demands and expectations of consumers. The long-term effects of the pandemic on the service sector will depend on the resilience and adaptability of businesses and the continued support from the Turkish government.
Tourism is a critical contributor to Turkey's economy, accounting for approximately 12% of its GDP before the pandemic. The COVID-19 pandemic and the subsequent travel restrictions imposed around the world led to a significant decline in tourist arrivals. According to Turkey's Ministry of Culture and Tourism, international tourist arrivals in the country fell by approximately 65% in 2020 compared to the previous year.
This decrease had severe consequences for local businesses and employment in the tourism sector. Major hotels, such as the Four Seasons Hotel Istanbul and the Çırağan Palace Kempinski, experienced substantial declines in occupancy rates. Turkish Airlines, the country's national carrier, also suffered a significant drop in passenger numbers. The loss of tourism revenue and the closure of many businesses resulted in job losses and reduced income for many workers in the sector.
The hospitality industry in Turkey faced considerable challenges during the pandemic. Lockdown measures and social distancing requirements led to the temporary closure of restaurants, bars, and cafes, causing financial strain on these establishments. Many small and medium-sized businesses (SMEs) within the hospitality sector struggled to survive, with some eventually closing down permanently.
To counter these challenges, the Turkish government introduced various relief measures under the "Economic Stability Shield" package. These measures included tax relief, financial assistance to affected businesses, and wage subsidies for employees. Turkey's Ministry of Treasury and Finance stated that these measures aimed to preserve jobs and support the recovery of the sector.
Turkey's retail sector experienced significant impacts due to the COVID-19 pandemic. Lockdown measures and a decrease in consumer confidence led to a sharp decline in foot traffic and sales for many brick-and-mortar retail stores. Major shopping centers, such as the İstinye Park and Zorlu Center in Istanbul, faced significant challenges.
However, the pandemic also accelerated the growth of e-commerce in Turkey, as consumers increasingly turned to online shopping amid restrictions. This trend provided a lifeline for many retail businesses that were able to quickly adapt and invest in their online presence. Major e-commerce platforms like Trendyol and Hepsiburada experienced a surge in demand during the pandemic. The Turkish government recognized the potential of e-commerce and introduced measures to support its development, including financial incentives and promoting digital literacy.