Appetite for hotel investments still strong: Association

ISTANBUL

The latest data for incentive certificates issued by authorities show that appetite for hotel investments remained strong in the first half of 2023, says Müberra Eresin, the president of the Hotel Association of Türkiye (TÖROB).

From January to September, 131 hotel projects with 23,725 rooms in the country's 29 of all 81 provinces received investment incentives, according to Eresin.

“The size of those investment incentives amounts to 17 billion Turkish Liras ($637 million),” Eresin said.

When those investments materialize, they will create around 7,000 jobs, she added.

In the same period of last year, investment incentives worth 7.5 billion liras were issued to 75 hotel projects with more than 14,000 rooms, Eresin said.

“Despite the decline in hotel occupancy rates, which is due to the combination of several factors, hotel investments are showing signs of recovery,” she added.

Hotel occupancy rate declines

The occupancy rate at Türkiye’s hotels declined from 71.2 percent in July 2022 to 67.3 percent in the same month of this year. The occupancy was much higher at 75.6 percent in July 2019 but plunged to 31.4 percent when the COVID-19 pandemic took its toll on the tourism industry.

In Istanbul and Antalya, two major tourist destinations in the country, the occupancy rate was 73.3 percent - down from 80 percent a year ago - and 70.5 percent, respectively. The occupancy rates at Antalya’s hotels were 74.6 percent last July and 77.4 percent in 2019.

The average daily rate at Istanbul hotels rose 2.7 percent year-on-year to 163 euros, while it was 313 euros in Antalya, up nearly 13 percent compared with July 2022.

People from the tourism industry mostly blame short-term rental houses for the low occupancy rates.

The soaring demand for short-term rentals is gravely affecting the hotels, necessitating the need for new regulations, Association of Mediterranean Touristic Hoteliers and Operators (AKTOB) President Kaan Kaşif Kavaloğlu said last month.

Other players in the industry have also joined the discussion, making proposals to resolve the problem.

All countries, which are Türkiye’s competitors, such as Spain, have this short-term rental system, noted Mehmet Gem, the president of the Travel Agencies Managers’ Association (SAYD).

“But what we have [in Türkiye] is wrong altogether… There are some 45,000 registered Airbnb users in Spain, but in Türkiye, there are only about 3,000 to 4,000 users. What we demand is that travel agencies should be responsible for short-term rentals. Real estate agents should be excluded from this system,” he said, adding that the association has presented its proposal to the Tourism Ministry.