Incentive-based hotel investments fell 26 percent year-on-year in 2015, according to a recent report by the Turkish Hotelier’s Association (TUROB).
Compiling data from the Economy Ministry, TUROB calculated the volume of incentive certificates issued for hotel investments.
While investment incentives for 316 hotel projects totaled TL 5.36 billion in 2014, the figure fell to TL 3.98 billion for 239 projects last year, according to the TUROB report. The number of projects decreased 25 percent and total volume 26 percent.
The Turkish Statistics Institute (TurkStat) in late January said Turkey’s tourism revenues fell 8.3 percent to $31.46 billion in 2015.
Investment incentive certificates were issued for projects in 52 provinces, with Antalya, İstanbul and İzmir having the highest number, accounting for 99 of the 239 projects. Most of the investment incentives were granted for three, four and five-star projects.
The total bed capacity in the planned projects, meanwhile, dropped 31 percent, from 82,000 in 2014 to 56,448 in 2015. New hotels are expected to employ 14,264 people once completed.
Instead of giving certificates for new investments, the ministry should focus on the modernization of existing hotels, TUROB Chairman Timur Bayındır said.
“That is the only way to deal with the ‘bed capacity inflation’ in some provinces and prioritize quality,” he added.
Even though İstanbul ranked in the top spot in terms of investment volume, Turkey’s resort city of Antalya came well ahead of other cities in terms of total bed capacity in planned projects.
Turkish media reported last week that as many as 1,318 hotels have been put up for sale along the Aegean and Mediterranean coasts after Russian sanctions and security concerns hit Turkey’s tourism industry hard.