Officials from the Turkish Tourism Investors Association (TYDD) have called for public offerings to help companies solve their financing problems. Officials emphasized that the increase in the number of publicly traded companies would accelerate the inflow of foreign funds into the sector.
The 3rd Tourism Investment Forum (TIF2023) organized by TTYD was held in Istanbul on Wednesday. Deputy Minister of Culture and Tourism Nadir Alparslan and Vice President of the Presidential Investment Office Bekir Polat, who attended the event, called on foreign guests to invest in the Turkish tourism sector, while TTYD officials suggested local companies to go public.
19 tourism companies traded on Borsa Istanbul
Speaking at the opening of TIF2023, Ali İhsan Gungor, Deputy Chairman of the Capital Markets Board, said that their duties as an institution are not limited to finance. “Our duty is to provide the necessary support to the tourism sector. For this, we help individual and institutional investors to find investments” Gungor said. He noted that 19 tourism companies are traded on Borsa Istanbul and emphasized the importance of the real estate investment trust (REIT) model in terms of access to finance. In this way, the public can also benefit from the income generated by this model, Gungor said.
“Only Turkey reached the pre-pandemic levels”
Delivering the opening speech of the forum, TTYD President Oya Narin emphasized that Turkey has become a top 5 destination and one of the fastest growing markets among G20 countries, receiving 60 million tourists and generating USD 56 billion in revenue annually, and said, “Only Turkey was able to reach the pre-pandemic figures of 2019. As tourism investors, we think that the sector’s contribution to the economy should grow even more. We are growing fast, but we are still far behind our potential.”
As part of the forum, Narin also held a private meeting with a group of industry representatives, including TTYD Vice President Mehmet Nane and Mediterranean Touristic Hoteliers & Investors Association (AKTOB) President Kaan Kasif Kavaloglu. Narin said that Turkey’s tourism sector needs new investments as well as 50 thousand bed renovations annually. However, as in all other sectors, there are problems in accessing financing in the tourism sector. TTYD officials emphasized that the public offering of companies would offer an important solution at this point. Narin said, “Large companies can meet their financing needs with foreign funds. However, it is not easy to provide this renewal especially for medium and small-sized companies. It is easier for public companies to attract funds.”
TTYD Vice President Mehmet Nane said that public offerings should be encouraged in order to spread the capital to the bottom. Stating that the increase in the number of public offerings in the tourism sector will increase foreigners’ appetite for investment in Turkey, TTYD officials said, “Public offerings also increase the transparency and visibility of a company. Therefore, the more the number of public offerings in the sector increases, the more foreigners will trust the country for investment. The hotel real estate sector needs to reach a transparent structure like the capital markets. There is a need for large funds to invest in the sector rather than individual investments. We want to attract foreign funds to the country through capital markets.”
Two challenges for foreigners’ appetite in the tourism sector
TYDD President Narin told about two major challenges for foreign investments in the sector: The lack of standardization in the zoning law and the 49-year allocation period.
According to Narin, there is confusion with municipalities about the zoning law. There is a need for an easy-to-understand and standardized zoning law. For example, Sarigerme is a very good destination. However, the zoning plan changed 4 times. In the meantime, there were finished investments.
49-year allocation period is also not preferred among the Arabian Peninsula investors, Narin said, and added: They prefer title deeds. Stating that there is a need to a transition to new models in investment allocation periods, Narin gave the example from the UK, where allocation periods start at 999 years.
WTTC/Rodriguez: Attract foreigners to Turkey
Maribel Rodriguez, Senior Vice President of the World Travel and Tourism Council (WTTC), stated that the global tourism sector, which was hit hard by the pandemic, has entered a growth trend again, even growing faster than the global economy. “However, we are still 5 percent below the pre-pandemic figures. China has a big impact on this. China, which has an important share in tourism, opened only a year ago” Rodriquez said. Stating that Turkey experienced a boom in tourism in 2022 and grew faster than Europe, Rodriguez said, “Turkish companies started to open their doors abroad. You are very strong, please open the power abroad and please encourage foreigners to invest in your country.”
