Published On: Tue, Aug 15th, 2017

Hotel investments in Black Sea region climb due to interest from Gulf countries

It was reported that the investment amount of the projects that received incentive certificate in 6 months reached 1.7 billion TL and the Black Sea region enjoyed a large increase in the amount of investments in hospitality sector. In the current year so far, 7 hotel projects have been started in Trabzon, where there is a boom of interest from Gulf countries mainly. On the other hand, it is noteworthy to remind that the region stands the risk of receiving unplanned investments which could turn out to be a disadvantage in the long run.

According to a survey conducted by the Turkish Association of Hoteliers (TÜROB) based on data provided by the Ministry of Economy on “Investment Incentive Certificates” the investment amount has increased due to high capacity facilities. In fact, in the first six months of 2017, 101 hotels in 38 provinces have received incentive certificates for an investment amount of 1 billion 681 million TL with a capacity of 16 thousand beds.

Experts draw attention to the fact that the increase in the number of tourists coming from the Gulf region has played an important role in the investment increase in the Black Sea, and remind the critical point that investments in this region should be done in a controlled manner.

The fact that said region is quite short of tourism season (sun & sea, in specific), might turn out to be a major issue in the future. This concern applies to not only to investments in Trabzon, but also to those in other locations in the region. As a rule of thumb, occupancy rates go up to of 80 percent in high seasons but are less than 50 percent per year, on average. Investments need to be done within a plan and surely taking this into consideration as well.

Experts say if the capacity of hotels in the region surpasses the demand, this may cause many investments to become idle which would mean waste of time, energy and certainly funds.

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