Posted by: Christoph Härle
CEO Continental Europe - Jones Lang LaSalle Hotels
Jones Lang LaSalle Hotels
I departed from Munich with 15 cm of new snow and landed in warm, sunny Istanbul last Monday. Contrary to my expectations, Istanbul was unusually quiet upon my arrival and I was welcomed with spectacular fireworks. I later found out that the fireworks were less in my honour and more due to the Turkish Independence Day on 29th October. The Hospitality Summit, where I was speaking, was held at the Ceylan InterContinental Hotel and brought together a number of representatives of hotel companies, including Nikki Beach Resorts, Corinthia, Starwood and Accor with the event focussing on guest trends and the luxury hotel landscape in Turkey, Central and Eastern Europe and the Middle East.
Istanbul’s appeal as an event destination has grown considerably over the last couple of years, going hand in hand with less rigid visa requirements for Turkey. Luxury is currently the trend in Istanbul with the majority of hotel supply in terms of room count (37%) concentrated in the 5 star segment.
In line with this, a number of luxury hotels recently opened in 2012, including Le Méridien (where we helped negotiate the Management Agreement) and Radisson Blu, with further projects currently in the pipeline and due to open in 2013, such as the Shangri-La and Raffles. Average rates and occupancy in Istanbul’s luxury segment recorded a significant increase in 2010 and rose further in 2011 to reach EUR 238 and 74.0% respectively, resulting in a room yield of EUR 176 (up 12 % compared with 2010).
The market has remained strong in 2012 with average room rates reaching EUR 258 and occupancy at 71.9% in the year to September 2012 (a 0.3% increase in room yield compared to the same period a year ago).
Investor interest is high for Istanbul. However, due to the significant gap between buyer and seller expectations and the fairly opaque market, no notable transactions have been recorded in 2012. Last year saw the sale of two smaller hotels in Istanbul, the Taksim Keban Oteli and the Kartanesi Otel, both bought by local Turkish investors for an undisclosed amount.
My next stops are Berlin, Zurich and London, so watch out for more European hotel gossip.