Attended by, and benefitting from insights from key industry leaders and dignitaries including Governor of Istanbul Davut Gil, vice president of Turkiye Cevdet Yılmaz and Minister of Treasury & Finance Mehmet Şimşek, the Tourism Investment Forum 2024 hosted by TTYD emphasised the critical role the tourism sector – and by extension the hotel and hospitality sector - plays in Turkiye’s plan for its future.
Government strategy
With tourism accounting for 12 per cent of the country’s GDP, the sector is seen as an important part of the strategy to boost the Turkish economy and public investment to facilitate this is high on the government’s list of priorities, a move which no doubt benefits the hotel sector.
Minister of Treasury & Finance Şimşek emphasized plans to improve tourism-related infrastructure, highlighting sizable investments into making destinations across Turkiye more accessible as well as into ensuring sustainable tourism. “We have invested in airports - increasing the number of airports from 26 in 2003 to 60 to 2023 – and we are now prioritising railroads which will account for 36 percent of investment.”
He noted the planned investment on infrastructure for 2024 to 2029 stands at $85 billion, 2030 to 2035 at $59 billion, and 2036 to 2053 at $51 billion, taking total planned investment until 2053 to $195 billion.
This comes as the country is also moving towards diversification to expand its tourism portfolio, with the aim of unlocking the untapped potential from destinations across the country leveraging part-government owned Turkish Airlines.
“We are trying to diversify tourism products in Turkiye to ensure we have greater scope and we want to have year-round tourism in all 81 provinces. We also want to diversify our markets, and Turkish Airlines destinations are all markets of focus for us,” said Nadir Alpaslan, deputy minister – Ministry of Culture and Tourism.
“Turkiye has traditionally very well-known destinations but it has the huge potential for further cities. We have our provincial tourism promotion and development program where we cooperate with all the mayors, governors and local industry in 81 provinces of the country, and each one is working to become a destination for tourism. We will continue promoting more destinations and make more of our cities famous,” said Elif Balcı Fisunoğlu, vice general manager of Turkish tourism agency TGA.
Growing interest
Dominique Exmann, commercial associate director at Oxford Economics added: “Travellers are increasingly looking for emerging destinations beyond traditional hotspots and are seeking new experiences. Turkey has a golden opportunity to capture that demand.”
Julia Simpson, president & CEO of the World Travel and Tourism Council agrees that the country has huge potential, noting that the country was one of the first major markets to make a full recovery after the pandemic, recording a 30 per cent outperformance of 2019 levels by 2023.
She adds: “Looking at investment, in 2023 travel and tourism reached a ten-billion-dollar goal of investment, putting Turkey in the top 20 destinations globally for travel investment. And this momentum shows no sign of slowing down – in 2024, travel and tourism in Turkiye will be worth over $15 billion and over the next ten years will grow at 2.4 per cent annually.”
Challenges and solutions
But while there’s a bright future in store, with the country showing great fundamentals, challenges remain, one being inflation as well as a volatile albeit improving interest rate environment. However, Simsek stresses work is being done to manage the high inflation.
Governor Davut Gil adds: “Interest rates will decrease as well as inflation, and our risk premiums are on a decreasing trend. Investment conditions are favourable, especially going into the second half of 2025.”
He adds that despite political uncertainties in its surroundings, the country has maintained its security as well as its political stability.
Partnership between the public and private sector also forms part of the strategy to boost inbound tourism and investment with Yılmaz highlighting the importance of collaboration amongst the two.
“Public-private partnership is paramount – without it, you’re going nowhere. We need to build an investment friendly environment and there needs to be political stability if we’re to attract both Turkish investors and international investors,” stresses Alessandra Priante, president of Italian National Tourist Board ENIT.
And experts notes that Turkiye’s tourism landscape shares similarities with established destinations like Italy and Spain, drawing parallels as they highlight the opportunity in the Turkish market.
“Drawing similarities with Turkiye, Italy has notoriously been a very fragmented country in terms of the presence of hotel chains but there’s massive demand and a lot of opportunity around rebranding,” says Angelica Corsini, director & head of business development at Arsenale Group.
Brand expansion
And the big hotel brands see the opportunity too, with major hotel brands doubling down on Turkiye’s potential.
Hilton leads with a pipeline of over 5,000 rooms, and Hilton senior vice president continental Europe David Kelly notes that Turkiye plays a significant role in Hilton’s growth plans.
“Next year, we’re on track to open almost 50 hotels in Europe, with Turkiye making up 10 of those hotels – so it’s a really important market for us. US growth into Turkiye presents a huge opportunity for the future and the opportunity for us to attract the US business into this market will be very strong for some time to come,” he says.
Meanwhile, Marriott, Accor and Wyndham have aggressive expansion plans. Accor regional vice president Jean-Baptiste sees a lot of opportunity in the amount of unbranded hotels in the country, Marriott chief development officer Jerome Briet sees a lot of room to grow in a bid to increase its market share, and Wyndham aims to reach 150 hotels from its current 125 by the end of 2025.
“For us, it’s not just about Istanbul or Izmir. We also plan to grow in the Tier 2 and Tier 3 cities and follow the government’s infrastructure projects – the airports, the highways, the ports - because those will be the places people will flock to,” says Dimitris Manikis, president EMEA at Wyndham.
Performance
And with international arrivals into the country surging 6.6 per cent higher in 2023 compared to 2019, average rates seeing strong growth, and occupancy improving year-on-year, it’s clear Turkiye is set for a boom.
“We’ve seen average rates grow more strongly in Turkiye than any other European country since 2019. Occupancy is doing well at 63 per cent, up 5.4 percent on last year and that growth is expected to continue. Average daily rate October 2024 year-to-date stood at €131, with Istanbul recording €135 and the Turkish Riviera coming in at €195,” notes Thomas Emanuel, director at STR.
Looking ahead
He adds that Turkiye has the 4th largest pipeline in Europe after the UK, Germany and Spain - beating out Poland, Ireland, France, Italy and Portugal - with 42 per cent of Turkiye’s pipeline of 20,545 rooms in Istanbul.
With ambitious investment strategies, a commitment to public-private partnerships and a focus on attracting international investment, it seems investors can have confidence there will be enabling support from the highest echelons of government when seeking to harness the opportunity Turkiye has to offer
Put simply by Governor Davut Gil: “As the Governor of Istanbul, we are at the service and disposal of your investors 24/7 and are ready to do whatever needs to be done to pave the way for you in every aspect.”