Positive ADR, RevPAR for Hotels in Istanbul

According to data compiled by STR Global, the Istanbul hotel market experienced positive growth in both ADR and RevPAR year-to-September 2011.

The trend is encouraging, as new supply has grown by an additional 1,868 daily rooms (+5.9%) since 2010.

The city's central location 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%) 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 this has meant that hotel performance in 2011 has mainly been driven by ADR growth (+34.1% to TRY364.07) as the global economy as well as new hotel supply might have impaired the occupancy growth (-3.3%) 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% compared to14% 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% increase in room supply might present challenges for the market. Hoteliers may also face more competition in both the high end of the market, as well as the economy segment.

See recent travel news from: Travel News Asia, STR, September 2011, Istanbul, Turkey