Turkey’s hotel industry is grappling with a volatile economic landscape, with its hoteliers seeking to balance record-breaking tourism numbers with soaring operational costs.
The country is no stranger to macroeconomic shocks.
Inflation reached 35% in 2025 and 68% in 2024, severely eroding purchasing power and increasing business costs. In response, the government implemented high interest rates, which made borrowing more expensive.
Cost pressures in Turkey’s hotels intensified significantly in 2025, driven primarily by that persistently high inflation, which continues to outpace currency, said Tuğra Gönden, chairman of Cushman & Wakefield in Turkey.
“This imbalance has pushed operating costs to levels that many hotels can no longer absorb, resulting in a growing number of properties exiting the market, entering distressed sale processes or continuing operations under severe margin pressure,” he said.
Operational costs are exceptionally high, said Erdoğan Turan, general manager of the 315-room Innvista Hotels Belek, near Antalya.
“Prices are rising across the board: fuel, energy, labor costs. Against this background, the key thing is to keep the increase in prices at a certain balance,” he said.
The harsh economic realities have gone hand in hand with Turkey’s positive travel industry performance.
Turkey achieved record-breaking tourism in 2025, welcoming approximately 64 million visitors and generating approximately $65.2 billion in revenue, according to government figures. In 2025, the sector saw a 3% rise in tourist numbers and a 7% increase in revenue, driven by strong demand from Russia, Germany and the United Kingdom.
Hoteliers are finding little joy in these rising tourist numbers.
“Inflation remains the dominant factor reshaping the sector’s economic realities,” Gönden said.
Hoteliers in the country are looking to move to a more premium product, as high occupancy is no longer translating into higher profits.
“The industry is navigating well-documented headwinds … which can place pressure on profitability even in periods of high occupancy,” said Seda Aslan Yilmaz, a marketing director who works closely with the Regnum chain of hotels.
Optimism among Turkish hoteliers
There are reasons to be optimistic about Turkey's hospitality industry, hoteliers said.
In 2025, Regnum Hotels observed a significant increase in tourist spending compared with previous years, Yilmaz said.
“Not only did visitor numbers remain strong but per-capita spend rose meaningfully, indicating a clear shift in demand towards higher-priced, premium and experience-led hotels,” she said.
The ongoing profitability crisis is affecting primarily the budget segment, a concern compounded by Turkey gradually moving away from its historic positioning as a low‑cost, all‑inclusive destination.
“Both government and industry stakeholders have accelerated efforts to reposition the country as a higher‑quality destination with improved service standards,” Gönden said.
He added this shift requires time and sustained investment but aligns strongly with Turkey’s broader value proposition.
Those hotels that took part in the premiumization trend in recent years have made the right bet, said Volkan Öztürkler, general manager of the 129-room Mandarin Oriental Bodrum.
“In the luxury segment especially, we believe Turkey has made a significant leap in recent years,” Öztürkler said. “The country is no longer perceived solely as a holiday destination. It is now a hub where global brands invest and where high-spending international travelers consciously choose to visit.”
Despite the macroeconomic uncertainty, the 2025 occupancy of the Mandarin Oriental Bodrum was higher than in 2019, Öztürkler said, and overall operational performance was “exceptionally strong.”
Navigating turbulence
The Turkish hotel forecast for 2026 remains cautiously optimistic, which will largely depend on whether the growth in foreign tourist numbers continues.
Overall growth has been highly volatile and there is no guarantee it will continue in 2026, Gönden said.
“Regional conflicts, geopolitical tensions and recessions in key feeder markets have all negatively affected booking trends, average spend and traveler confidence,” he said.
Specifically, economic headwinds in Germany and Russia are seen as factors that could undermine the upcoming summer season.
Yilmaz said Regnum Hotels expects continued growth in demand for luxury, wellness and experience, which aligns closely with its brand positioning.
“While we remain attentive to global economic conditions and ongoing cost pressures, we believe that strong product differentiation, brand strength and market diversification will support a balanced and sustainable year of performance,” she said.
Innvista’s Turan said Turkish tourism is always vulnerable to external factors.
“War, global crises or any other negative event can change the course of the sector,” he said.
Öztürkler, however, is optimistic for Turkey's hospitality sector.
“International demand remains resilient, and momentum in the premium segment continues. We believe upper-tier destinations such as Bodrum will continue to positively differentiate themselves,” he said.