Hotel Business

Features of the hotel business in Turkey

Turkey is an excellent platform for any kind of investment, but it is the hotel business that has been holding the palm of the championship for decades. After all, this is not only a guaranteed opportunity to recoup your investment, but also the prospect of combining work and rest, which greatly enhances the popularity of the direction.

Holiday is the most wonderful opportunity for work, and only the Turkish tourist infrastructure in conjunction with the active development of the medium and high segment of hotels allow you to build on the beautiful coast, working and at the same time enjoying the privileges of the resort area.

However, in order to achieve success it is not enough only to have an idea and financial investments, but it is necessary to understand what the tourism business in Turkey is focused on, what is more in demand, how to achieve a stable income in the short term, as well as to take into account the recommendations of the Ministry of Tourism of the country and international standards.

Why do hoteliers choose Turkey?

More and more hoteliers are betting on Turkey, the number of hotel chains in the country is increasing every year, today there are more than 160 of them. It is important that about 18 percent of them are owned by foreigners or are a form of joint ownership. Why Turkey? There are several reasons:

• Last year, tourism in the Republic of Turkey was recognized as exceeding the global average in terms of development, and the industry’s contribution to the balance sheet deficit in 2017 amounted to 38 percent;
• Turkey is among the top five countries in terms of geothermal tourism and ranks first in terms of the number of thermal springs, as there are more than 1500 of them in the Republic!
• The number of hotel beds at thermal spa resorts is growing rapidly, their number has already exceeded 55 thousand, which is due to high demand.
• Turkish Belek is a real paradise for golf fans. Every year more than 2.5 million tourists from different countries come here, and the International Association of Tourist Golf Tours Managers recognized Turkey as the most developed country in the industry. Every year new hotels are opened in Belek, which are always in demand.
• Due to optimal climatic conditions, construction of hotels in Turkey is very fast and relatively inexpensive. Competition is very high, which forces construction companies to offer customers low prices, thus minimizing the payback period of investment.
• The Turkish authorities are actively working to turn the country into a year-round resort. Examples include the development of diving in the city of Kekaba, where tourists can admire sunken ships at any time of the year, the “Lycian Trail” for trekking fans, numerous tennis courts and soccer fields for training athletes in winter. Last but not least, medical and business conferences, usually held in winter, play a major role in maintaining hoteliers’ year-round income.

Most popular hotels in Turkey

Popularity and peculiarities of Turkish hotels cause keen interest not only among tourists, but also among investors who plan to open a hotel business on the coast.

AKTOV (Association of Investors and Hoteliers of Turkey) is considered the most unbiased and accurate source of hotel ratings in the country.

According to the latest data provided by analysts of this organization at the end of 2017, the best Turkish hotel chains are: Dedeman Hotels, Rixos Hotels, Limak Int.Hotels, Titanic Hotels, Delphin Hotels, Crystal Hotels, Paloma Hotels and Anemom Hotels.

As for the international hotels of the chains, which, similarly to the Turkish ones, were assessed according to at least 15 criteria, the leaders were: Hilton Worldwide Hotels, Intercontinental Group, Accor Hotels and Wyndham Hotels.

According to the Ministry of Tourism, the Land of Legends, Delphin Premium and Max Royals Hotel are the most popular holiday destinations this season. The originality and fantasy with which the owners approach the organization of the hotel business and Land of Legends Hotel chain Rixos plays a very bright role.

The concept of the hotel is truly unique, as its rooms are decorated in a unique style, there are elements of fantasy and fairytale motifs, as well as the interior reflects the bright historical moments. In addition, the hotel has developed a chic amusement park, holidaymakers are delighted to be immersed in the fantastic world offered by the hotel’s creators.

As far as Max Royals Kemer is concerned, it has become a leader in many respects due to its unique location, the hotel is located on the territory of the reserve, its concept is based on the unification of man with nature, combined with high quality service and meeting all the requirements of the VIP.

The most unusual Turkish hotels include the Aqua Boss Hotel in Istanbul, located within the walls of the former cannery, the floating Otantik Gemi Hotel, located near Bursa and based on a real Istanbul ferry, the Gamirasu Hotel in Cappadocia, where guests are welcome in the rooms-caves, and hotels in the form of forest houses on the Mediterranean coast.

The ingenuity of the hoteliers is invariably justified by the high income and flow of guests, as practice shows, modern tourists appreciate originality.

Do not forget about the numerous boutique hotels, the popularity of which has almost doubled over the past year and a half. This segment is becoming more and more attractive for investors due to its fast payback. Such hotels are designed for travelers who are tired of the bustle, and seeking to plunge into the atmosphere of relaxation and privacy, relax from the noise.

One of the most popular boutique hotels in Turkey is the Ada Hotel, located in the thickets of ancient olive trees in Bodrum, no less famous is Tahsin bey Konagi, which is based in the walls of an ancient mansion and creates a unique historical atmosphere.

The fantasy of Turkish hoteliers really knows no borders, because thanks to the geographical location and the support of the state, Turkey has the most courageous ideas.

Features of the hotel business in Turkey

Turkey has long been recognized as a real tourist “mecca”, it pays off well as large hotel complexes and boutique hotels, camping sites, or resorts.

Antalya, Belek, Bodrum, Alania and Side are recognized as the main tourist centers of the country, although in other regions tourism is developing with no less intensity, there are differences, except in the specifics and categories of hotels. The main criteria, which should be paid attention to when planning investments in hotel business:

• Shoreline (distance to the sea)
• the difference (and number) in the pool or water park on the hotel’s premises
• area size
• Additional hotel services provided to guests (spa, massage, gym, playgrounds)

Important: The hotel business in Turkey is modeled on the differences in the cooperation between the hotel owner and the managers, and the most common schemes are those that apply:

• Hotels with an independent management system, where the disposal is entirely in the hands of the owner (this option may also involve a team of managers or management organizations);
• Hotels united in hotel chains (they are full members of hotel chains, usually run by official representatives of the owners, who have all the rights to the profits. The phenomenon of hotels joining the network by means of franchise is also widespread);
• A chain of hotels under the direct supervision of professional hotel holdings. In this case, several business options are considered. Sometimes the owner does not interfere in the conduct of business and trusts their manager, who is fully responsible for all risks and financial transactions, and the owner only makes a profit. However, the owner is often involved in the management process and the level of responsibility is specified in the contract;
• Hotels that are combined by the owners on mixed and individually agreed terms;
• Hotels that are officially members of independent hotel associations.

Organization of the hotel business in Turkey is greatly simplified if it is accompanied by competent legal support and transactions made under the control of proven consulting organizations.

In Turkey, the leader in business support is the largest company Sovet Consulting, which provides security, legality and optimal conditions for the transaction.

Payback of hotels

At the end of 2016-2018, foreign investors significantly shifted their interests towards the hotel business, one of the main reasons being the return on investment. For example, on the Antalya coast the prices for hotel services increase by about 9 percent per year, and business class hotels increase the cost of living up to 25 percent annually.

In the middle class hotels segment there is also a stable intensive growth, which has no effect on demand. Gross income in the hotel business is much higher than the amount invested. For example, the construction of a small hotel for 90-100 beds will cost about 4 million dollars. A hotel pays off in 5 years on average, becoming a source of stable income for life.

In addition to constant income, the hotel business is also attractive because property prices are rising, and the cost of real estate by the time the return on investment increases by at least 2 times. When choosing a suitable location and competent management of the hotel a significant increase appears quickly enough and directly depends on the initially competent organization of business.

Benefits of investing in a hotel in Turkey

The Turkish government is very loyal to foreign investors and provides them with the same benefits as its citizens. Over the past 2 years, the number of government programs designed to stimulate foreign investment in tourism has increased significantly.

For example, if a businessman decides to open a hotel in an area with low economic development, the government provides a number of benefits due to the priority of financial investments in these areas. Economic incentives in the underdeveloped areas of Turkey are usually expressed in exemptions from some taxes and customs duties and flexible credit schemes.

In Turkey, there is a so-called “Certificate of Incentives”, which provides the investor with a number of privileges in doing business in some areas.

Buying a hotel in Turkey

Prices for Turkish turnkey hotels vary depending on the location, infrastructure and category of the facility. For example, a luxury five-star hotel with guaranteed payback will cost at least $100 million.

But hotels in the middle segment can cost from one and a half million. Most investors focus on small hotels, buying them relatively cheap and transforming them into unique boutique hotels and resorts with high payback.

Having determined the object of the transaction, the businessman faces the need to familiarize himself with the terms of the transaction, the peculiarities of contracts and Turkish legislation. In order to avoid problems, most investors prefer to seek help from reputable companies, such as Sovet Consulting, which will accompany the start of the business and ensure the legitimacy and quality of the transaction.

Careful! If you decide to take on a hotel sale by yourself, be prepared for a number of challenges. Often there are a number of mistakes in the documents, which can become fatal for the buyer in the future. Sometimes this happens as a result of a lack of awareness of the nuances of the law.

In order to avoid such troubles, the support of such transactions is better to trust only professionals. The huge amount of regulatory documentation in Turkish language invariably requires the presence of qualified specialists accompanying the transaction.

If the decision to start a hotel business has already been made, the object of purchase and sale has been chosen, and the hotel development plan is fully prepared, it remains only to entrust the transaction to specialists and enjoy the planning of successful implementation of the project, which will not only bring income to you, your children and grandchildren.