August 2016 TÜROB Investment Incentive Report
Investment appetite is on the rise again
The Association of Turkish Hoteliers (TÜROB) announced that in August 2016, 'incentive certificates' were issued for 17 new hotel projects with a bed capacity of 3,303. A total of TL 326.9 million will be spent on these investments. In August, incentive applications increased compared to the same month last year by 21% in the number of hotels, 38% in the number of beds, and 85% in the investment amount.
Despite a troubled period in the tourism sector, investment appetite in the accommodation sector rose rapidly. The Association of Turkish Hoteliers (TÜROB) compiled the 'Investment Incentive Certificates' for August 2016, issued by the Ministry of Economy and published in the Official Gazette, from the perspective of the accommodation sector. Accordingly, in August 2016, 17 new hotel projects with a bed capacity of 3,303 in 11 cities nationwide received an 'incentive certificate', and 1 hotel received a 'renovation certificate'. Upon completion of the investments, which will require a total expenditure of TL 326.9 million, 892 new additional jobs will be created in the sector.
This August, compared to the same month last year, the number of hotels increased by 21%, the number of beds by 38%, and the investment amount by 85%. In August of last year, 14 hotel projects with a total of 2,385 beds in 12 provinces had been granted incentives with an investment amount of TL 175 million. In terms of the number of beds for August 2016, Istanbul ranked first with 1,052 beds, followed by Muğla with 488 beds and Bursa with 396 beds. In terms of the number of hotels, Istanbul ranked first with 5 hotels, followed by Bursa and Ankara with 2 hotels each.
Decline continued over 8 months
At the end of the first 8 months of 2016, covering the January-August period, the decline in investments continued. In 8 months, 117 new hotel projects with a bed capacity of 24,274 in 35 cities across Turkey received an 'incentive certificate'. A total of TL 1 billion 961 million will be spent. Accordingly, over the 8 months of this year, compared to the same period last year, the number of hotels declined by 28%, the number of beds by 30%, and the investment amount by 12%. In the first 8-month period of 2015, 162 hotels with a total of 34,494 beds in 48 provinces had been granted incentives with an investment amount of TL 2 billion 249 million. Upon completion of the first 8-month investment incentives, 6,134 new additional jobs will be created in the sector. In terms of the number of beds during the 8-month period, Istanbul ranked first with 4,560 beds, followed by Antalya with 4,069 beds and Muğla with 2,200 beds. In terms of the number of hotels, Istanbul again ranked first with 21 hotels, while Muğla ranked second with 12 hotels, followed by Antalya with 9 hotels. Sivas and Karabük were the cities that entered the list for the first time this year.
Istanbul and Antalya have reached saturation for investment
Making an assessment on the subject, TÜROB President Timur Bayındır said that the incentive system should be revised and regulations should be made that will make an impact and encourage investors in spreading tourism investments to our Anatolian provinces. Drawing attention to the investments that continue to increase in Antalya and Istanbul, President Bayındır reiterated his view that, especially in Antalya and Istanbul, existing hotels should be renovated and modernized instead of building new ones. Bayındır said: "Instead of cities like Antalya and Istanbul, which have an oversupply of hotel investments, we need to diversify investments in alternative regions. Within the incentive system, especially regarding hotel investments, if we work in coordination with the Ministry of Economy as sector organizations, we can plan investments correctly. Taking into account that our existing hotels, particularly in the provinces of Antalya, Istanbul, Aydın and Muğla, have entered a period of wear and tear, we will request that the incentive certificates to be issued for these provinces be regulated to focus more on the modernization and renovation of existing investments rather than new investments."
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