Tourism Under Pressure from Currency and Prices

Several major tourism economies — the UK, Greece, Türkiye, Argentina and Spain — are entering 2025–2026 in the midst of a structural crisis. Inflation, distorted exchange rates, and rising travel costs are reshaping global tourism flows. Destinations once considered accessible are becoming financially prohibitive, driving travellers elsewhere and pushing local residents to spend their money abroad. This mismatch between economic policy and tourism dynamics forms the core of the new global paradox.

Currency Overvaluation as a Structural Distortion

Argentina is the clearest example of overvaluation: the peso remains artificially supported while domestic inflation accelerates. The outcome is predictable — services priced for locals become prohibitively expensive for foreigners, reducing inbound travel and encouraging residents to travel internationally. Similar pressures, though in different forms, emerge in Türkiye, the UK and southern Europe.

Inflation Undermining Affordability

Inflation has become the dominant force behind declining competitiveness. The UK faces price pressures compounded by post-Brexit disruptions; Spain and Greece have seen sharp increases across hospitality, food and transport; and Türkiye struggles with chronic inflation regardless of currency fluctuations. As a result, hotel stays, dining and local mobility now cost far more than many travellers expect.

Eroding International Competitiveness

Countries that built decades of tourism success on affordability are losing ground. Greece and Spain now face weakened demand from middle-income travellers. Türkiye’s volatile lira creates inconsistent pricing, discouraging those seeking predictability. The UK has become one of the most expensive destinations in Europe, reducing its appeal among long-haul visitors.

Country Examples: The Global Tourism Paradox

Argentina, despite high inflation, maintains a strong peso policy, making domestic tourism more expensive than travelling abroad. Türkiye’s currency cycle — devaluation followed by strengthening — keeps prices unpredictable even for cost-conscious visitors. The UK’s strong pound amplifies the cost of hotels and services for foreign tourists. Spain and Greece, once synonymous with Mediterranean affordability, now struggle to retain their value-for-money advantage.

Caribbean nations with currencies pegged to the US dollar face similar issues: while stable on paper, local inflation pushes prices beyond the reach of European and Canadian travellers.

Conclusion: Economics Override Destination Appeal

Inflation, currency distortions and weakening competitiveness form a growing global challenge. No matter how attractive a destination may be, it struggles to maintain tourism demand when domestic prices rise faster than global benchmarks. Without strategic economic recalibration, these countries risk losing relevance in a market defined by price-sensitive travellers and global choice.

In contrast to the crisis unfolding across major tourism economies, Georgia continues to demonstrate sustained growth. Tourist arrivals are rising year after year, hospitality investments are expanding, and the country maintains a favourable price-competitiveness balance thanks to a stable currency and moderate inflation. Tourism has become one of Georgia’s strongest economic drivers, supporting GDP growth, stimulating local consumption and attracting long-term investors. Unlike its regional peers, Georgia is strengthening — not losing — its position on the global tourism map.