ISTANBUL—The genesis of Dedeman Hotels & Resorts International, which has two brands, Dedeman and Dedeman Park, was sparked in the early 1950s following Mehmet Dedeman’s visit to New York’s famed Waldorf Astoria.
Suitably inspired by Big Apple opulence, Dedeman arrived back in his native Turkey with dreams of hospitality and soon had financing and blueprints for Dedeman’s first property, in Turkey’s capital Ankara, in an era when only the state supported tourism.
Now the company is Turkey’s largest domestic hotel chain, with three properties in Istanbul and 11 in other Turkish cities, including Diyarbakir, Erzurum, Konya and Sanliurfa. Outside Turkey, the company has one hotel each in Erbil, Iraq; Oskemen, Kazakhstan; and Tashkent, Uzbekistan.
In 2012, the company founded a second brand, Dedeman Park, a midscale complement to the upscale Dedeman brand.
There are two Dedeman Park hotels in the Turkish cities of Denizli and Gaziantep. An additional two are under construction in Istanbul as well as one in Moscow. The 100-room hotel in Moscow will be the brand’s first international endeavor.
Already this year, Dedeman has opened the Dedeman Park Bostanci in Istanbul, which debuted in April with 252 rooms. The Dedeman Oskemen Tavros, the first major flag in the Kazakhstani city of Oskemen, also opened in April with 133 rooms.
Expansion capital
In January, the company announced in a news release it negotiated a project finance loan of $175 million from Turkish bank DenizBank, whose CEO Hakan Ates said at the recent Turkey & Neighbours Hotel Investment Conference (known by its Turkish acronym CATHIC) that six or seven banks in Turkey were bullish enough to concentrate their lending efforts on tourism.
That news followed the December 2013 reorganization of the company in which the Dedeman family announced it purchased the remaining shares.
Bilge Turcan, Dedeman’s chief business development officer, told HNN the company is not looking out of its traditional markets.
“Outside of Turkey, we are looking at what we can call Eurasia, places that Turkey has airlift and business relationships with. It would be nonsense for us to go into a country that we did not have these with. We are interested at the moment in markets that know what Turkey and its brand are and have a positive image of the country,” Turcan said.
Expansion is to be done carefully, he said.
“Land in Turkey is expensive, so the final product is expensive, too. We need to carefully look at the internal rate of return of each property, to boost profitability via more rooms at the right investment levels,” Turcan said.
That careful mix will be spearheaded by new Dedeman Park hotels, which will permit that sub-brand properties in Turkey’s growing regional cities to share back-of-hotel scale with its older siblings.
“The company cannot do the same building twice in each market, so Dedeman Park will be the perfect addition to our presence in such cities as Konya, Gaziantep, Izmir and Ankara,” Turcan said.
“The targets are cities that have an exciting mix of industry and tourism, local money and a population of more than a million. Outsiders are not so familiar with these cities, but there are more than 10 places in Turkey with more than 1 million people,” he added.
Dedeman also will look at adding hotels to Istanbul’s new, rapidly emerging business districts.
Turcan said Dedeman Park hotels will retain the core of the full-service offering of its sibling but concentrate on a “good welcome, a good sleep, a good breakfast and the ability to do business comfortably.”
“(Food and beverage) is not a determinate. In Turkey, company travelers have a limited budget. The main requirement they have is a warm breakfast,” Turcan added.
In its pipeline to 2023, the chain will have a total of 42 hotels, with 20 Dedeman-branded hotels and 22 Dedeman Park-branded hotels, up from 14 Dedeman properties and two Dedeman Park properties at present.