TÜROB’s 2020 investment report: Anatolia slows down, Antalya and Istanbul still hungry for investment...

Tourism came to a halt, but investments continued

Despite the harsh conditions of the pandemic period, hotel investments continued. In 2020, 137 new hotel projects received incentive certificates. The number of projects rose by 19% compared to 2019. In its assessment, TÜROB stated: “Even in a period when the pandemic had adverse effects on the sector and investments were postponed in many areas, investors continued their efforts to complete the hotel investments they had launched in 2020 and earlier, based on the fact that the cost of a stalled investment is higher. This can be regarded as an indication of investors’ hope and confidence in the sector.”

Although the accommodation sector experienced the worst period in its history in 2020 due to the pandemic, it did not lose its appeal in terms of investment. Hotel investments continued to be one of the areas that attracted the most investor interest in 2020 as well. According to the 2020 investment report prepared by the Association of Turkish Hoteliers (TÜROB) based on the Ministry of Industry and Technology’s data on ‘Investment Incentive Certificates,’ incentive applications were filed last year for a total of 137 hotel projects with 31,098 beds and a total incentive value of TL 4.065 billion.

Last year, while the monetary amount of incentive certificate applications declined by 7% compared to the previous year, the number of projects rose by 19% and bed capacity increased by 1.2%. In 2019, incentive applications totaling TL 4.353 billion had been filed for 115 hotel projects with a total bed capacity of 30,727.

An indication of hope and confidence

According to the calculation in the ‘2021 Tourism Facilities Unit Costs List’ announced by the Ministry of Culture and Tourism, the per-room cost of the hotel investments made during this period was calculated at TL 183,404, and the total investment cost at TL 5.704 billion.

In the TÜROB assessment included in the report, it was stated: “Even in a period when the pandemic had adverse effects on the sector and investments were postponed in many areas, investors continued their efforts to complete the hotel investments they had launched in 2020 and earlier, based on the fact that the cost of a stalled investment is higher. This can be regarded as an indication of investors’ hope and confidence in the sector.”

The investment frenzy in Trabzon subsides

On the other hand, according to TÜROB’s report, new projects were planned in 41 cities last year. Antalya and Istanbul continued to dominate overwhelmingly in new investments. Anatolia, meanwhile, was observed to have slowed down. The slowdown of the investment frenzy in the Black Sea region, a favored destination of recent years in particular, was striking. Antalya and Istanbul also continue to dominate overwhelmingly in the new investments to be realized. Of the projects that received incentive certificates, 24 were located in Antalya and 18 in Istanbul. The 24 hotel projects in Antalya, which had the highest number of applications, comprise 9,208 beds. The total bed capacity of the projects in Istanbul, which had 18 applications, is 4,308. In other words, nearly half of last year’s projects in terms of bed capacity were located in Antalya and Istanbul.

The other provinces in the top 10 were Muğla with 7, Mardin with 6, Nevşehir and Balıkesir with 5 each, and İzmir, Hatay, Sakarya and Şanlıurfa with 4 each. In Trabzon, which had long been among the top three provinces receiving the most investment, the number of projects last year remained at just 2.

Five stars in capacity, three stars in number of projects

Among the hotels that received incentive certificates in 2020, five-star hotels ranked first in terms of capacity, with 15,447 beds across 33 hotels. In terms of the number of hotels, the highest number of applications was for three-star hotels, with 49 projects.

TABLE 1:

Cities at the peak of investment

City

Number of projects that received incentive certificates (2020)

TABLE 2:

Hotel investments by year