ISTANBUL—Turkey has a lot to offer hoteliers. The country’s hotel industry just needs to do a better job of marketing itself to potential investors and tourists, concluded panellists and speakers during the first day of the Central Asia & Turkey Hotel Investment Conference.
Here are key takeaways from the first day of coverage:
• Turkey has a bad perception among much of the world, according to Yapi Kredi Bank's Cevdet Akçay. “Turkey has a perception problem because we are not doing a good PR job on our economy,” he said. “My idol is Brazil because there are many similarities between our economies, but Brazil is doing an excellent job of managing the perceptions of their economy.”
• The general sentiment: The region’s hotel industry is headed in a positive direction despite challenges in the economy.
• The industry is excited about the opportunities in Turkey—there are 20 cities in the country with 1 million-plus people that are in need of hotel development.
• The country has the most appetite for midscale and economy hotels. Larger profit margins and less up-front costs contribute to the appeal. Most of the focus for these product types is in regional cities where land is more readily available for development and demand will support between 150 to 220 keys.
• Hot markets in the region, according to BDO International’s Mehmet Önkal, include:
o Baku, Azerbaijan—A Fairmont, Hilton, JW Marriott, Kempinski and Four Seasons are due to open in 2012.
o Batumi, Georgia—Hilton, Kempinski, Rixos and all have hotels in the pipeline, while a Radisson Blu has just opened.
o Erbil, Iraq—Doubletree, Hilton and Kempinski have projects in the pipeline.
o Baghdad—There are five 3- to 5-star hotels that are being refurbished by the state, and they want international chains to run them. However, safety outside the green zone remains an issue.
o Istanbul, Turkey—39 hotels are open with another 24 in the pipeline (international brands only).
• The biggest barriers to growth in Turkey include the lack of land for hotel development (and the cost in Istanbul) and the reluctance of Turkish banks to lend for hotel projects.
• Hilton Worldwide is the market leader in Turkey. The chain has 20 hotels in operation and 13 in the pipeline. (Four new projects were signed yesterday, including the first Hampton by Hilton in the country.)
• Investment in Turkey needs to be done through a trustworthy local partner.
• There is a feeling there will continued growth in the resorts sector, but debate exists as to how much of that is branded. Both Hilton and Starwood Hotels & Resorts Worldwide have a strong resort strategy in Europe, whereas InterContinental Hotels Group does not.
Overall, conference organizers and attendees think the region holds a wealth of opportunities that will persist for some time, with Turkey, in particular, emerging as a hot target for investment and development.
