Millennium Hotels & Resorts opening its first property in Turkey later this month could not come at a better time.
The launch of the Millennium Istanbul Golden Horn coincides with Istanbul seeing the highest increase in occupancy rates across Europe in February, as leisure travel bounced back. Still, there is room for improvement as rates were less buoyant, a sign that business travel is still timid.
As the 127-room Millennium Istanbul Golden Horn readies for its opening, GM Orhan Yeserenyuva said: “Istanbul remains one of the world’s leading tourist destinations, attracting more than 10 million travelers last year alone, so we are delighted to bring the first Millennium Hotels’ and Resorts’ hotel to this vibrant city.”
The hotel is not the only luxury property entering the market, with Hongkong and Shanghai Hotels currently building a Peninsula Hotel in partnership with two Turkish partners, Doğuş Holding and BLG. Once completed, it will join the Fairmont Quasar Istanbul, which opened last year.
According to Lodging Econometrics, Istanbul had the third-largest pipeline in Europe, with 31 projects and 5,620 rooms in February.
According to the country’s ministry of tourism and culture, January saw a 38 percent year-on-year increase in the number of foreign visitors coming into Turkey as a whole, to 1.46 million.
STR reported that Istanbul saw the highest increase in terms of hotel occupancy rates among all European destinations with a 35.1 percent year-on-year increase in February, while the city’s hotel room rates rose slightly by 3.3 percent to €68.70.
Timur Bayındır, president of the country’s hotel association, commenting on the figures, called on an increase in business and conference tourism to drive up room rates to the level prior to the attempted coup and political unrest in 2016.
The country has seen recent growth in leisure visitors, driven by rising prices in Spain, as illustrated by the 38-percent increase in traffic through Antalya airport last year, a market heavily reliant on holiday traffic. Both TUI and Thomas Cook have reported a resurgence in bookings, with Thomas Cook’s head of Germany, Stefanie Berk, telling ITB last month: “Measured in terms of the flight capacity, a doubling of customer numbers is possible. 2018 could be a record summer.”
Leisure business has been further aided through government subsidies on flights from locations including Western Europe, along with subsidies for cruise passengers.
Hüseyin Yayman, deputy culture & tourism minister, was looking to move away from reliance on the leisure market, commenting at a recent meeting in Istanbul: “We have been aware of the structural problems of the Turkish tourism sector, including an extremely high number of all-inclusive hotels and an overemphasis on summer tourism rather than a 12-month-long approach.”
In the capital, hotels were looking to the city’s new airport, due to open later this year, to drive trade. Built to support the growth of Turkish Airlines as it aspires to make Istanbul a leading global hub, it is aiming to have the capacity to serve 200 million passengers in 2028, making it the largest in the world, according to its website.
While the country was reporting a recovery driven by holiday-makers seeking out cheap sun, the beginning of this year marked the one-year anniversary of a terrorist attack in the capital that killed 39 people. With the country’s prime minister continuing to make headlines with his treatment of the press and his perceived enemies, there remains doubt over Istanbul’s safety, doubts which are likely to give pause to any company considering dispatching their executives.
That caution is likely to continue in the lucrative corporate market.
Katherine Doggrell is an editor at Hotel Analyst, the U.K.-based news analysis service for hotel investors.