Amid government claims of booming tourism revenue and occupancies, hoteliers say the Turkish hotel industry is unstable as operators face rising costs, high inflation and staffing challenges.
Erdoğan Turan, secretary general of the Profesyonel Otel Yöneticileri Derneği, or Professional Hoteliers Association, and general manager of the 315-room Innvista Hotels Belek, said the Turkish Riviera holiday region’s hotel industry is currently “volatile.”
Despite government claims of record occupancies in the region, Turan said hotel performance this season is unpredictable as hoteliers grapple with higher operating costs, high inflation and price volatility.
“It’s still not clear whether the season has been good or bad, but there are problems in the market in general,” he said.
While August hotel occupancy rates in Turkey have been generally good, the situation is fluid.
“Reservations are usually last-minute. This creates great uncertainty for hotels. Some regions and hotels face more problems than others. There are also fluctuations in prices,” he said.
The latest monthly data from the Turkish Ministry of Culture & Tourism shows Antalya — located on the country's southwest Mediterranean coast — is leading a rebound in hotel occupancies in Turkey after small year-over-year dips earlier in the year.
Turkey's luxury hotels are booming; in Antalya, the segment reached 88.6% in June. However, occupancy at two-star hotels was 55.8% in June, compared to 66.8% in the same period last year.
The picture is very different across different Turkey's various hotel markets.
In Istanbul, June occupancy was 48.7% for five-star properties and 47.1% for two-star properties, down from 50.6% and 51.4% in 2024. One- and four-star hotels performed the best, with occupancies of 57.8% and 58.8%, respectively.
In August, those figures rose slightly to 58.5% for five-star properties and 55% for two-star properties, while Istanbul averaged 61% occupancies on the whole. Antalya hotels, meanwhile, operated at 101.5% occupancy in the month.
After a record 62.2 million tourists in 2024, the government believes this year’s target of 65 million tourists and $64 billion in tourism revenue is on track, despite evidence of a fallout from inflation and rising prices for both hoteliers and travelers.
Visitor numbers slid by 3% in July to 7.12 million, official data shows, down from 7.33 million in July 2024. The government said losses were primarily from the key incoming markets — Germany, Russia and the United Kingdom — fueling concerns that rising prices are dampening Turkey’s appeal for European travelers.
“Last year, we had a greater competitive advantage in price for foreign tourists,” said Yiğit Girgin, who retired in August as general manager of the Bodrium Hotel & Spa in Muğla, immediately west of Bodrum.
Pain points
Global cost pressures and Turkey’s economic situation combined to produce a slow start to the country’s tourism season.
There have been “price-related challenges in the U.K. and German markets,” Girgin said.
“Tax burdens on businesses coupled with rising costs and the lack of an expected exchange rate hike have pushed our prices above the globally desired levels. Increasing staff and other … costs have all contributed to reducing the competitive advantage abroad,” he said.
Müberra Eresin, vice-president of Istanbul’s Eresin Hotels Group and president of Türkiye Otelciler Birliği, or Turkish Hoteliers Association, said Turkish hotels are caught between a rock and a hard place when it comes to inflation and room prices. But hotel occupancy is improving in Istanbul, she said.
“However, due to the steep increases in the inflation rate in 2024, we have seen our average room rates drop … [and] a significant increase in costs continuing, which is more than challenging the hospitality industry,” she said.
While Turkish inflation rates dipped in June to 35.41% — about half that of June 2024 — hotels remained near the top of the inflationary ladder, according to the Türkiye İstatistik Kurumu, or Turkish Statistical Institute, with a 35% hike in costs year-on-year and a 2% price increase.
Ergün Demiray, chairman of Dedeman Hotels & Resorts International — Turkey’s largest homegrown international hotel chain — said high inflation “ate up” around 8% of profits in 2024 as costs outpaced inflation.
Eresin said ADR hikes were the goal this year after rates were stagnant in 2024 despite inflationary pressure.
“The industry is facing a competitive market environment, coupled with workforce difficulties in providing quality services. Our aim is to increase revenues and ensure that businesses survive,” she said.
Sabahattín Duman, president of the Bodrum Professional Hotel Managers Association, said the Aegean coastal city has lost European visitors amid reports of rising prices, which he added are normal given the level of inflation hoteliers are facing.
“Hoteliers are all competing under the exchange rate pressure that is driving up prices,” he said.
He added the Turkish hotel industry needs to correct these “price perceptions.”
“Even local tourists are talking about the affordability of the Greek islands,” he said.
Girgin agreed, adding he felt quality tourism needs to be prioritized over growing occupancy.
“In Turkey, we have moved past the phase of tourism solely focused on occupancy rates. … Bodrum should stand out for what it offers its guests,” Girgin said.
Hakan Saatçıoğlu, president of Antalya’s Professional Hotel Managers Association, said increased prices must be accompanied by quality improvements.
“We need to reflect our increasing expenses by providing better service and quality,” he said.
Hoteliers across the region were raising rates by at least 5% in 2025, but he added there is room for more increases.
Government crackdown
The Turkish government began to keep a close eye on the country's hotel quality following a fire at a Turkish ski resort in January that resulted in 78 deaths.
At the end of May, the government shut down more than 4,000 hotels for failing to obtain mandatory national tourism certification introduced in 2021. All operating licenses previously issued by local authorities are set to be revoked.
But global hotel brands are still optimistic about Turkey's lasting travel appeal.
“As interest rates begin to decline, we remain confident in the country’s improving economic landscape,” said Nilsun Tümer, business development director for Turkey at IHG Hotels & Resorts.
IHG plans to debut its soft brand Vignette Collection in Turkey later this year with the opening of Union Han, Istanbul Karaköy. The hotel is part of IHG’s strategic market penetration in Turkey across all brand segments, Tümer said.
“Turkey is a key market for us due to the impressive tourism growth in recent years, and we see it as an opportunity to drive further expansion,” she said.
High costs and inflation and the dip in occupancy have not deter growth from the global hotel brands.
Accor opened the 403-room Mövenpick Resort Antalya Tekirova in June 2024 and is now targeting Ankara and Antalya, said Sinan Köseoğlu, vice president of operations for Turkey at Accor. He added there's plenty of room in Turkey for more hotels affiliated with Accor's premium, midscale and economy brands.
“A further 20 hotels are due to be signed by 2030,” he added, across brands Mercure, Mövenpick, Novotel and Swissôtel.
As the Turkish hotel industry focuses on quality over quantity and developing sustainable, year-round tourism, Turkey’s image as an “expensive country” is the biggest obstacle in reaching 2025 tourism targets, Eresin said.
“We can only overcome this situation with an increase in exchange rates,” she said.
Dedeman’s Demiray agreed it is the perceived expense that is the “critical and ongoing problem, not drops in demand.”
“The failure of the exchange rate to keep pace with inflation puts [hoteliers] in a difficult position," he said.
But not everyone shares that optimism. It's more difficult than ever to find hotel workers in Turkey, Turan said. He added if the country's economy gets any worse, more small and medium hotel companies will feel the strain.
“We have difficulty finding staff … we have difficulty in price strategies, and we are seriously struggling in terms of marketing,” he said.