Turkey becomes hotbed of investments

INTERNATIONAL REPORT— As tourism in Turkey reaches record heights, the country is becoming one of Europe’s hottest hotel investment markets, with Istanbul and the resort city of Antalya major hubs of new projects.

Data from the Turkish Statistical Institute shows an 8.3% hike in tourism revenue in 2024, to $61.1 billion, as Turkey’s international visitor numbers rose by 9% to over 62 million. Those figures are seeing investment interest blossom along with signings with big brands.

Nilsun Tümer

According to Lodging Econometrics, Turkey has a record high of 130 projects and 19,038 rooms under development, putting it third in the European construction pipeline after the U.K. and Germany. In Q4 2024, Istanbul was the second top market in Europe after London, with 49 projects/7,903 rooms.

IHG recently added three hotels to its Turkey portfolio, said Developement Director Nilsun Tümer. IHG now has 33 open hotels and 12 in its pipeline across seven brands.

The February signing of the Crowne Plaza Istanbul West in partnership with Artas Turizm was part of a strategic expansion of all brand segments in Turkey, said Tümer, fueled by surging leisure and business tourism demand.

Turkey saw positive RevPAR growth for IHG in 2024 and remains one of our fastest-growing European markets... This makes it a highly attractive destination for hotel investment, reflected in our recent signings.

Nilsun Tümer

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“Turkey saw positive RevPAR growth for IHG in 2024 and remains one of our fastest-growing European markets, driven by rising demand in the luxury, mainstream, and resort segments. This makes it a highly attractive destination for hotel investment, reflected in our recent signings."

Tümer said established tourist hubs such as Istanbul, Antalya, and Bodrum are attracting significant foreign investment and tourism.

“However, we are seeing numerous opportunities across several newer destinations, from cities to coastal locations such as Izmir and Cappadocia, with plans to expand further,” she said.   

Tümer said IHG is working closely with several Turkish investors to meet that growth, “focusing on how different global brands can adapt to the Turkish market with both management and franchise agreements.”

This year, IHG is debuting its first Garner brand and Vignette Collection in Turkey and is also seeing great momentum with its Crowne Plaza brand with 13 hotels open and two pipeline properties.

Interest from big brands

Accor, too, is reinforcing its expansion strategy in Turkey, “tapping into this vast tourism potential and growing its presence from economy to luxury,” said Paul Stevens, the group’s COO for the Premium, Midscale & Economy division for the Middle East, Africa and Turkey.

In January, the openings of the Ibis Styles Kurtköy in Istanbul’s business district and the launch of the Mercure Ankara Kızılay in Ankara kicked off a year of 10 additional signings, with more openings due over the next 18 months, Stevens said.

Paul Stevens

“Turkey stands out among the most dynamic and rapidly growing regions, with 15 of Accor’s 45-plus brands currently present in the market across 80 operating hotels. As we strengthen our footprint in the country, we are evaluating new opportunities and expanding our portfolio with 20 additional properties in the pipeline by 2030.”

Stevens said Accor’s growth strategy in Turkey is focused on increasing the presence of established brands, including ibis, Mövenpick, Novotel, Pullman and Swissôtel – and opportunities to introduce new brands like Tribe in key cities and resorts “to meet different accommodation demands in different segments.”

The 2024 opening of the 383-room Mövenpick Resort Antalya Tekirova was one example of this; he added, “highlighting the huge potential in maximizing Accor’s presence along Turkey’s strong coastal leisure destinations.”

Antalya is also on Marriott’s radar (along with Istanbul and Ankara) for a Four Points Express by Sheraton, with the January opening of the Cappadocia Marriott Hotel flagged as one of 20 planned openings in 2025 as its growth in Turkey unfurls.

Many investors are feeding into the record 16.6 million foreign tourists to Turkey’s second top destination in 2024 – an 8% year-on-year increase, according to Kaan Kaşif Kavaloğlu, president of the Mediterranean Touristic Hoteliers’ and Investors’ Association (AKTOB).

Eyüp Mavi, group chairman of the Fenix Companies Group, partnered with Accor in 2023 to develop the Swissôtel Antalya Kalkan.

Investor interest

Eyüp Mavi is the group chairman of the Fenix Companies Group. He described his 2023 partnership with Accor to develop the Swissôtel Antalya Kalkan as a turning point in the company’s growth.

The luxurious 245-room hotel is set to open this year in Kalkan, Antalya Province, as part of the mixed-use Fenix Center, comprising a ritzy shopping mall, apartments and restaurants, and the Swissôtel.

Mavi foresaw untapped potential in the resort town with its turquoise bays and beaches, a three-hour drive from Antalya. “It is located close to the airport, with 7 million tourists a year passing through,” he said of the site, which had been vacant for 25 years.

Eyüp Mavi

Both the Dalaman and Antalya airports are expected to become epicenters of surging tourism in the region. Mavi wanted to attract tourists and Russian investors with one of the largest projects of the Mediterranean region, costing 850 million lira ($23 million) and creating a new luxury destination in the city for vacationers.

“Russians who previously came for shopping or holidays are now buying property in Antalya, helping to accelerate investments,” Mavi said. He said foreigners, particularly Russians, have bought most of the residences.

The development aims to give those investors hotel services and the possibility of renting out their properties to the hotel business.

“The return on investment for those apartments given over to the hotel business has a short period of four to five years, which proves that it is a unique project for investors,” said Mavi, who’s banking on 80% occupancies for the hotel. That compares to a national average of 62.7% in 2024, according to The Hotel Association of Türkiye (TÜROB), as inflation soared – and ADRs dropped to €130.

Antalya is a magnet for investments. Hotel rates in the resort city rose 19.35% in 2023 to €172– compared to €143.5 in Istanbul. TÜROB expects rates to improve nationally in 2025, along with economic conditions.

IHG’s Tümer agrees with the positive outlook – and says investment obstacles are diminishing “in the improving economic landscape.”

“The Turkish Tourism Investors’ Association (TTYD) has forecast that tourism investments in the country are set to accelerate this year as interest rates start to fall. We see strong growth potential, which fuels our commitment to expanding and launching our conversion brands in Turkey,” Tümer said.