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Hotels in Istanbul Maintain Their Revenues While Demand Falls

Tourist industry of Turkey is not in its best state at the moment because for several years already the growth of hotel supply exceeds hotel demand. The difference may not be big (the growth of hotel supply estimates 3.7% while the growth of hotel demand is only 3.1%), but demonstrations and civil unrest in the country in 2013 made the situation even more complicated. However, hotels in Istanbul managed to cope with the problem and even post positive results. While occupancy lost 0.6%, average daily rate added 5.2%, making revenue per available room (RevPAR) grow by 4.6%. Even though in 2013 hotels in Istanbul finally reached the pre-recession level of RevPAR in 2011, during several last years the growth was driven only by increasing average daily rate, and that might become a problem in future as the city’s hotel supply is growing too.

In April 2014, hotels in Istanbul posted a double-digit growth of average daily rate compared to the same period of 2013. This helped to offset the negative growth of occupancy (-10.3%). As result, hotels in the city reached the highest level of RevPAR growth since 1996. The city’s hotel supply is growing fast mostly in upper upscale segment. Within next three years the existing room supply will be increased by 15%, with majority of new hotels being 4-star properties in the city centre managed by famous international brands. Currently, there are 380 hotels with over 40,000 guestrooms in Istanbul.

05.08.2014

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