Press Release

16 Dec 2011

Istanbul reports positive ADR, RevPAR

Istanbul reports positive ADR, RevPAR

10 November 2011

LONDON—The Istanbul hotel market experienced positive growth in both average daily rate (ADR) and revenue per available room (RevPAR) year-to-September 2011. The trend is encouraging, as new supply has grown by an additional 1,868 daily rooms (+5.9 percent) since 2010, according to STR Global, the leading provider of market data to the hotel industry.

As a result of the government’s introduction of economic stimulus measures in 2010, the Turkish economy, which is still recovering from the downturn in 2009, is approaching positive GDP growth. In fact, Istanbul, the European City of Culture in 2010, was ready to welcome an increase in tourism arrivals with an attractive exchange rate against the major currencies and a growing new hotel supply of branded hotels. The city’s central located between Asia, the Middle East and Europe helped position Istanbul as one of the top 10 destinations for Conference and Incentive events in 2010. 

Istanbul became the third-fastest growing tourist destination in the world in terms of visitor number (+30.1 percent) in 2010, according to a MasterCard Worldwide report published in July 2011, surpassing New York and Amsterdam, attracting more tourists from the Middle East (Saudi Arabia, Iran and United Arab Emirates), the U.S. and Europe.

For hoteliers it has meant that hotel performance in 2011 so far was mainly driven by ADR growth (+34.1 percent to TRY364.07) as the global economy as well as new hotel supply might have impaired the occupancy growth (-3.3 percent) year-to-September compared to the previous year. Looking at the impact of the currency exchange between the Turkish Lira and both the Euro and the U.S. dollar, ADR growth in Euro-terms was only 9 percent compared to14 percent in USD. 

The future is promising for hotels in the city, as Istanbul capitalises on its modern image as a destination of choice and remains an attractive destination for both business and leisure travellers.

“The flexibility of the Turkish Lira against the other major currencies and the sound economic environment will encourage the hotel market to remain very active in the coming months”, said Elizabeth Randall, managing director of STR Global. “Speaking recently with hotel consultants and operators in Istanbul confirmed our observations”.

But challenges still remain for Istanbul's hotels. Volatility in the global environment and the expected 9.3-percent increase in room supply, according to the STR Global pipeline, might present challenges for the market. Hoteliers might face more competition in both the high end of the market as well as the economy segment with the proliferation of branded supply.

Are you managing, or developing a hotel Istanbul? Do you own or plan to invest in a hotel in Istanbul, let us know what you think of the current market trend directly on our Facebook page or Twitter @str_global

About STR Global

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