This quarter BMI has revised and restructured its tourism reports, incorporating a greater range of data and focusing on the hotel industry, the value of the tourism industry itself, and the impact of macroeconomic factors.
We believe that Turkey offers a great deal of investment potential to large tourist industries - particularly global hotel groups - as they seek to maximise the growth opportunities being offered by the local market at the present time.
In 2012, a total of 31,782,832 tourists visited Turkey, representing growth of 1.04%, according to BMI estimates. Looking forward, we remain very positive about the outlook for Turkish tourism between 2013 and 2017, although there is always a risk that sentiment towards the local tourist industry could be dented by potential terrorist attacks or other domestic security issues.
For 2013, BMI is predicting an increase of 3.5% in total tourist arrivals. The outlook for foreign visitors over the forecast period will remain strongly influenced by real GDP growth in the eurozone - one of the key source regions for tourists. At the present time, BMI is forecasting flat growth for the eurozone in 2013, rising to 1.2% in 2014. Limited economic growth in two major source markets, the UK and Germany, is also expected to constrain inbound tourism over the short term.
However, Turkey also receives a significant amount of inbound tourism from the faster-growing CEE region and, in particular, Russia. Much of the CEE region is currently booming and various tourist industries, particularly the large global hotel chains, are looking towards the CEE region now as they see it as a potentially lucrative market. A large part of this growth will be seen in intra-CEE tourism, and Turkey's future tourism arrivals will reflect this. Higher disposable incomes from Russia and other former states of the Soviet Union should also lead to increased outbound tourism demand for CEE countries such as Turkey over the medium term.
Encouragingly for the longer-term development of the local tourism industry, there is a good deal of diversification in the Top 10 source markets for inbound tourism to Turkey. Four of the Top 10 countries are from Western Europe (Germany, UK. Netherlands and France); three are from Eastern Europe (Russia, Bulgaria and Georgia); two are from the Middle East (Syria and Iran) and one from North America (the USA).
Over the forecast period to 2017, BMI is forecasting that some 600 hotels and other accommodation establishments will open in Turkey, reflecting the higher visitor numbers that we expect over the coming years. This will equate to some 16,180 extra rooms. The country is currently perceived as offering extremely attractive investment opportunities for hotel groups and other tourist-related industries, largely due to rising domestic tourism and regional tourism, supported by an increase in higher disposable incomes.
- In January 2013, Wyndham Hotel Group opened its TRYP by Wyndham hotel brand in Turkey, with the opening of the 108-room TRYP by Wyndham Istanbul Taksim. In mid-2013, Wyndham is also set to open the 306-room Wyndham Istanbul Petek.
- Carlson Rezidor is also in the midst of a significant expansion programme within Turkey. In December 2012, the hotel group announced that it would be opening a new 240-room Radisson Blu hotel in Kayseri, which is due to open in Q114. The company is also developing two Radisson Blu properties in Istanbul, as well as a new Hotel Missoni at Belek. These four new openings will then reportedly bring the total number of Carlson Rezidor hotels in Turkey to 10, with 2,200 rooms in operation and under development.
- In early 2014, InterContinental Hotels Group (ICHG) is scheduled to open the 93-room Holiday Inn Gaziantep - Sehitkamil and the 156-room Crowne Plaza Istanbul - Oryapark. Looking further ahead, ICHG is also developing the 273-room Crowne Plaza Istanbul - Ora, which is scheduled to open in 2017. This latter property will form part of an integrated project that incorporates the Ora Arena performance centre, as well as a shopping mall, convention centre and theme park.
- Underlining the growth potential of the Turkish tourism industry, outbound air traffic flows look set to increase from 59.37mn in 2013, to 78.08mn in 2017, representing growth of 31.5%.
- Although Turkey scores fairly well on most measures in BMI's proprietary Tourism Industry Risk/ Reward ratings, a very low score for Market Risks, reflecting high levels of short-term political uncertainty, weighs on its overall score. This has resulted in BMI giving Turkey an overall Tourism Industry Risk/Reward rating of 52.35 this quarter, putting it in 11th position for the CEE region, behind Moldova but ahead of Slovakia.