Hotel groups from east and west arrive in Turkey for a tourism boom
A panorama shot of the hotel pool in Simena, Turkey. Matt / Flickr
Born out of the European recession and growing on the back of Turkish Airlines’ airlift, Turkey has entered the spotlight as a global destination and hotel brands are making moves to attract the early adopters.
Turkey is being tipped as the hot spot for hotel expansion by international and regional operators, following a spate of new deals signed in the country.
Towards the end of last year, Wyndham Hotel Group introduced its namesake Wyndham Hotels and Resorts brand to capital city Istanbul — the prime location for operators — as well as launching its first TRYP by Wyndham property in the city, taking the company’s presence in Turkey to 18 hotels.
Wyndham Hotel Group SVP and MD, Europe, Middle East & Africa Rui Barros told Hotelier there was plenty of potential for further development, with nine more hotels in the pipeline.
“Wyndham Hotel Group entered the Turkish market in 2007 and, since that time, has built a portfolio of 18 hotels and almost 2700 guest rooms in the country under three hotel brands,” said Barros. “Ramada is our largest brand in the country to date with 16 hotels currently operating, eight of which are in the vibrant capital of Istanbul.
“Many things make Turkey a good place to invest. Firstly, the demand is there. According to the Republic of Turkey Ministry of Culture and Tourism there were 31.5 million international tourist arrivals in 2011. Visitors are also coming from an increasingly broad base of countries, no doubt bringing with them different requirements for their accommodation which will open up new pockets of demand.”
Barros continued: “Market conditions are also favourable. The potential for a rapid return on investment, attractive construction prices, government support and the availability of qualified employees have all contributed to the upsurge in development. Many investors are locals, keen to generate wealth”.
“There is significant potential for growth within Turkey for Wyndham Hotel Group. We already have a further nine Ramada hotels in the pipeline across the country as well as plans to open the second Wyndham Hotels and Resorts property in the country this summer in the Petek area of Istanbul.
“With 15 brands globally, we are also excited to bring other brands within our portfolio into the country as well, particularly within the mid-market and budget sectors.”
It’s no surprise that the world’s largest hotel group by number of rooms is focusing on Turkey. However, smaller operators have also identified niches they are keen to capitalise on.
In February, Nikki Beach announced that Nikki Beach Resort & Spa Bodrum would open in 2014 and Nikki Beach EMEA Hotels & Resorts Ltd COO Sary Arab told Hotelier there was potential for its urban hotel brand, The Nikki, in Istanbul.
He observed: “Turkey has some of the most incredible pristine beaches available in the Mediterranean and its tourism is growing by staggering numbers — the country’s location and stability, economical growth and excellent flight connections are also very positive factors that respond to our typical requirements.
“Our aim has been to open resort properties in Mediterranean locations that suit the growing demand of our loyal customers, and Turkey has been on top of our list for quite a while,” said Arab.
“Turkey is ripe for growth; Istanbul has more room to grow as well as other resort destinations, which have so far developed mainly with large hotel key counts and traditional brands,” he continued.
“There are opportunities for the lifestyle boutique hotel segment to grow, which matches perfectly with our positioning, a hotel type that has mainly been under the patronage and vision of local entrepreneurs.
“Our concept will be instrumental in shaping the emerging five-star lifestyle boutique hotel market,” asserted Arab.
Turkey has also been identified as a key expansion location for Middle East-based operators such as Rotana, Jumeirah and Millennium & Copthorne Middle East. Rotana announced its first foray there through a partnership with Turkish group Dap-Yapi for Tango Arjaan by Rotana and Burgu Arjaan by Rotana in Istanbul, which will increase its portfolio by 410 rooms.
Rotana president and chief executive officer Selim El Zyr said: “Arjaan Hotel Apartments by Rotana are designed to close the gap between hotel and home and we are entering the vibrant Turkish leisure market for the first time with this concept”.
Millennium & Copthorne MEA president and CEO Ali Hamad Lakhraim Alzaabi said he saw potential to open 10 to 20 hotels in the country.
“There are still a lot of hotel shortages in Turkey. If you look at Istanbul; the number of tourists, the number of flights expanding into Istanbul, they’ve done a good job but still Turkey has a long way to go,” Alzaabi told Hotelier Middle East.
“We’re about to sign there, talking now, we want to enter Turkey in Istanbul, then we expand into Turkey.”
Opportunities for growth for brands such as Millennium & Copthorne Middle East will be highlighted at the annual CATHIC (Turkey & Neighbours Hotel Investment Conference), being held in Istanbul from May 29-30, 2013.
According to Mehmet Önkal, managing partner of BDO Hospitality Consulting and the co-organiser of CATHIC, a recent Ministry of Culture & Tourism report from Turkey suggested that the country expects more than 50 million international visitors in the coming years, which will generate tourism-related revenue in excess of US $50 billion per annum.
“Now is the time for investors, developers and operators to take a serious look at Turkey and the greater region.
The opportunity is in the development of destinations and new tourism hubs. This year’s CATHIC provides the perfect venue for serious players to discuss the investment roadmap, together,” said Önkal.
Increased airlift and destination marketing from Turkish Airlines is also set to support expansion, with the carrier recently completing its Winter in Turkey campaign, which highlighted 20 skiing destinations.
According to the airline, in 2013, the number of beds in ski resorts is set to grow by 60,000 to accommodate for the popularity of winter tourism in the country. In resorts like Erciyes, where occupancy rates have approached 100%, construction of 21 hotels is due to begin this year.
This 275 million euro investment is expected to provide 5000 additional hotel rooms, part of the Kayseri Tourism Master Plan, setting Erciyes as one of the best mountain and winter sports resorts in the Middle East and Balkans regions, according to the Turkish Tourism Investors Association.