Things are getting worse: Istanbul is at rock bottom and wages are going unpaid

According to the Turkish Hoteliers’ Union’s 2016 Country Performance Report, Istanbul and Antalya were the two places in Europe to witness the greatest fall in tourist numbers. The THU’s Chair Timur Bayındır said, “There may be hotels in Istanbul that shut down for the winter.” The tourism sector is one of the sectors to have been hit the hardest by the economic crisis in Turkey. The situation in Istanbul and Antalya, which up until two years ago were heading the European league in terms of both occupancy and price, is now fully reversed. The ‘October 2016 Country Performance Report’ issued by the Turkish Hoteliers’ Union lays bare the extent of the crisis being experienced in the tourism sector. According to the report, the loss of tourists in Istanbul and Antalya has dragged Turkey’s average down. In its analysis of the figures, the THU has also made a comparison with two years ago.

HUGE FALL

According to these figures, Turkey’s hotel occupancy rate has fallen by 14% in 2016 as against 2015 to 52.2%. This rate was 60.7% in October 2015 and 63.8% in October 2014. With Turkey unfortunately maintaining its position in October as the country with the lowest occupancy level in Europe, the 20.8% fall in Turkey’s occupancy rate in the ten-month period has left it as the country to have experienced the biggest fall and, with occupancy at 50.4%, having the lowest occupancy rate in Europe

This rate was 63.7% in the first ten months of 2015 and 62.7% in the first ten months of 2014. Turkey was also the country to have the largest decrease in room yields in the first ten months of 2016, with a fall of 41.9%.

THERE ARE HOTELIERS WHO ARE SELLING THEIR HOMES TO MAKE THEIR PAYMENTS

The THU’s Chair Timur Bayındır said with reference to the occupancy figures, “These days we sadly witness many accommodation facilities closing and some employees at facilities that have either closed or are attempting to keep running having their contracts of employment terminated and being made unemployed.” Bayındır, noting that hotels are operating at an average occupancy level of 30% this year, commented, “This 30% translates into total loss. Many hotels have been unable to pay their rent and staff wages. There are even hotel owners who are selling their homes to make their payments. At least 40% of the staff in the sector have been shed.” Bayındır, stating that heading the list of problems currently faced by hotels are problems experienced with banks, said, “Many businesses are weighed down by bank loans. There are problems repaying loans on investments made in recent times in the expectation of double-figure increases in tourist numbers. The way things are going, banks will be big owners of hotels.”

OFF-SEASON SHUTDOWNS POSSIBLE IN ISTANBUL

Bayındır, said, “We can unfortunately say that the situation in Istanbul as far as tourism goes is at a very serious point.” Bayındır, indicating, “The difficulties are not restricted to foreigners and the flow of local customers has also come to a halt. City hotels need to be brought under incentive schemes, too. Until now, Istanbul has not been accustomed to proprietors saying, ‘Let’s close the hotel for three months and reopen in the new season.’ But, this winter, there may be hotels in Istanbul that follow the example of those in Antalya and shut down. The prospect also beckons of 2017 being worse than 2016,” said, “Planning and promotional activities for 2017 must start without wasting any time, otherwise we may also lose 2017.” Bayındır points out that steps must be taken immediately to overcome the difficulties in the sector.

On the other hand, October occupancy rates for the main tourism centres have become known. Occupancy rates for Turkey’s most important tourism destination of Istanbul fell by 18.8% in October 2016 compared to the same period last year to 52.3%. The corresponding figure in October 2015 was 64.4%, and in October 2014 67.6%.

FALL IN ROOM PRICES, TOO

As to the measure of room income known as the ‘average daily rate’ (ADR), this has fallen from 2015 by 29.6% to 85.5 euro. The corresponding figure for October 2015 was 121.4 euro and, for October 2014, 152.5 euro. The most significant fall was registered in revenue per available room (RevPAR). Revenue per available room fell by 42.9% as against the previous year to 44.7 euro. In October 2015, this figure stood at 78.2 euro and at 103.1 euro in October 2014. As to the average occupancy level in Istanbul over the ten-month period from January until October 2016, this was 49.1%. The corresponding figure for January-October 2015 was 67.2%, and for January-October 2014 65.8%. The average daily rate over the ten months was 93.3 euro. In January-October 2015, on the other hand, this measure stood at 124.1 euro, and at 138.2 euro for January-October 2014. Revenue per room was 45.8 euro over the ten months. The corresponding amount was 83.4 euro in January-October 2015 and 90.9 euro in January-October 2014.

FROM 90 EURO TO 62.5 EURO IN ANTALYA

Occupancy in Antalya fell in October 2016 by 12.6% from the previous year to 50.6%. In October 2015 this stood at the level of 57.9%, and at 59.1% in October 2014. The average daily rate fell from 2015 by 29.5% to 62.5 euro. The corresponding figure for October 2015 was 88.6 euro, and that for October 2014 90.5 euro.

As to revenue per available room, this fell by 38.4% from the previous year to stand at 31.6 euro. The corresponding figure in October 2015 was 51.3 euro, and for October 2014 53.5 euro. As to occupancy levels in the January-October 2016 period, these measured at 53.6%. The corresponding rate for January-October 2015 was 61.7% and that for January-October 2014 was 61.9%. With the average daily rate, which measured at 122.5 euro in January-October 2015 and 98.2 euro in January-October 2014, falling to 83.0 euro in January-October 2016, revenue per room, on the other hand, which stood at 75.6 euro in January-October 2015 and 60.8 euro in January-October 2014, came to 44.4 euro this year.

OCTOBER SURPRISE IN ANKARA

In October, a surprise increase in occupancy rates was experienced in the capital, Ankara. Hotel occupancy levels in Ankara in October 2016 rose by 3% in comparison to the same period in the previous year to stand at 65.5%. This rate was 63.6% in October 2015 and 61.3% in October 2014. With the average daily rate amounting to 68.2 euro, this corresponded to an 18.1% fall as against 2015. As to the occupancy rate from the start of 2016 until October, this stood at 53%.