lira of credit support, which was promised to the tourism industry by Turkish President Recep Tayyip Erdogan. With this amount, 85 luxurious luxury hotels can be built in addition to the existing ones, which will simply “explode tourism in Turkey” – these are the literal words of one of the local experts, who expressed himself so emotionally about the new prospects.
The crux of the matter is that after meeting with business representatives, the Turkish president said that out of the announced 150 billion Turkish lira credit support to be provided to manufacturing and tourism, a part of 50 billion will be allocated to tourism and mainly to hotels. According to the president's assessment, this amount is “large enough to finance the tourism sector and invest in tourism.” Note that we are not talking about a gratuitous subsidy, but about a long-term loan at 9% for “companies that provide services for earning foreign currency in the tourism sector.”
Kayhan Taner Ozen, one of the credit department managers of the former Development Bank of Turkey (TKB), commented as follows: “If this happens, 85 brand new 5-star hotels, each with a capacity of 1,000 beds, can be built with this financial support. Assuming these hotels sell for an average of $70 per night per night during high season and $40 during low and off season, the hotels would have a net operating income of $1.05 million of total turnover. $1.9 million. This gives one hotel a net operating income of $6,175,000 per hotel, and there is not a single hotel owner who is not happy with this profit.”
The expert also added that assuming 50% of the estimated cost is financed and the remainder covered by investors' own capital, the number of five-star hotels under construction will increase to 170 and capacity to 170,000 beds. “Given that an incoming tourist stays an average of 10 nights, this means that in the high season, which lasts four months, 2,040,000 tourists will be received. If we calculate that our hotels sell for an average of $70 per night per night during the high season, then we get $1.5 billion, and if we assume that they sell for an average of $40 during the low season, we will see another 400 million .dollars in circulation. Thus, the net operating profit of new hotels will be over a billion dollars,” the expert added.
In general, experts noted that investments in hotels “will provide a direct net inflow of foreign exchange, which will support the needs of the economy.” “We can expect an explosion in tourism stimulus next month due to new credit support,” they added.
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