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Room for expansion in luxury all-inclusive tourism in Turkey

Interview - October 8, 2015

Ali Şafak Öztürk, Vice President of Regnum Carya Hotels, explains the flourishing high-end all-inclusive resort concept in Turkey, as well as his hotel’s hosting role in the upcoming G20 summit, and the resilience and appeal of the Turkish tourism sector overall.


Last year was a record year for tourism in Turkey, but this year there has been an almost 14% reduction in arrivals across the country, and Antalya has been particularly affected. How do you assess the prospects for the tourism industry in Turkey going into 2016?

2015 has been a tough year; you already know the numbers. But, hopefully we can be optimistic about 2016 because there will be elections later this year and hopefully the outcome will be good for Turkey in general; things might be a bit steadier. Although the crash in the Russian market has badly affected the sector, we still believe things can improve, at least by 10% or 15%, depending on how steady the country is, because we feel people have already adjusted to the crisis.

There have been lots of question marks in 2015, such as how big the currency crisis is going to be, and how it is going to affect the daily life of people in general, but we feel that that things will improve, so people will be able to plan their days a bit better and plan their business a bit better too.

To what extent have the high-end resorts in Antalya been affected by the decrease in Russian tourists and the instability in Turkey?

We have been affected somewhat, but maybe not as much as the mid-range hotels. The problem for us is that there is a wave that affects from top to bottom and from bottom to top, so Russian people, although they have lots of businesses abroad, they still have houses or their main business in Russia and other countries. So it does affect us quite a lot, although, like I said, not as much as it affects the mid-range hotels. But we feel that when the Russian market starts picking back up again, we will do better than the mid-range hotels because people already have a comfort zone of luxury and they don’t want to lose that, especially people with money.

What is your client mix at Regnum Carya in terms of nationalities? How are you compensating for the shortfall in the Russian market?

The Russian market is the main one, but besides that, we have Kazak and Uzbek visitors, and also people from Azerbaijan and other countries close to Ukraine. The hotel has been very popular amongst people from these countries.

Also, there are hotels that only aim for the European market, Germany and UK being the main ones, and also France, Belgium, Austria and the Netherlands. So, it’s quite a mix. But since the loss of the Russian numbers, hotels have been quick to adjust with the numbers from countries like Germany, in particular, and the Middle East.

We, for example, have made a move to market our product better in the Middle East, because we feel that we have, of course, the same religion, and the level of service we feel is much higher than in other regions they usually visit. The revenue levels of the guests from that region are also more comparable to Russia. I think that region is going to play a big part in picking the tourism sector back up.

Europe is also a target for us, but we are scared that it might also fluctuate a lot because of all the recent things that have been happening worldwide in terms of terrorism, as you are aware. The things that have happened in Turkey, we feel like they have been exaggerated and blown out of proportion and the European market is very quick to react to these news articles, etc.

Regnum Carya is a vast resort offering a huge array of high-end sporting and leisure facilities. To what extent are you in competition with high-end resorts in Dubai and Marbella, rather than competing against Antalya resorts?

We feel it’s a mix of both. We would welcome other new projects that would push the level of luxury up, because we feel its good for the area; it brings the accessibility and visibility of high-scale developments, so we would welcome the idea of new hotels coming in. Although there is a good range of hotels in the region and they are at a good level already, we feel it can improve. And we feel the competition against other destinations is a bit out of our hands, on some levels. Dubai, for example, is one area you can compare because the size of the resorts is similar to Antalya, although Antalya is unique in itself because of the luxury all-inclusive concept. You don’t really see many regions with that concept at this level of luxury; it’s real five-star luxury. We are unique in our own way and we need to market that well.

Turkey and Antalya, compared to other regions, have beautiful history, and we need to market that. We also have 15 golf courses in a radius of 20 minutes of each other, so that is a big advantage for golfers. We have a good range of luxury hotels so people can come and stay in different resorts, and its great for families because it’s easy for them; with this all-inclusive luxury concept they don’t have to go outside of the hotel. In fact, most of them don’t leave the resort even though they stay here for two to three weeks, which is interesting.

But I think pushing this further, maybe it would be good to make the guests leave the hotels a bit more so that the surrounding area can improve as well. And that could be a new investment opportunity within the region, not just hotels but shopping malls, maybe theme parks and cultural organizations that can attract people.

Is your group considering investments in the region away from the resorts?

Hopefully in the future. We seriously believe in the area. We are making a large investment in the hotel and we have purchased the hotel next door as well. We are willing to push the region as much as we can, but I think we need to do this as a group of hotels and the government needs to really back this up. The G20 is a great place to make our voices be heard.

What do you think will be the impact of the G20 on Antalya, not only in terms of revenue for the region but also, and more importantly, in terms of reputation?

There will definitely be a plus on the revenue side, but the reputation is the real important factor here. I think there will be a sense of safety, because it’s the G20, and that is what we are lacking at the moment as a country and as a region, so the G20 will be a big advantage in that sense. If the tools for marketing this area are used well, and if we can tell people about the history of the region in general, it will help.

Antalya really has the potential to become a greater destination than it currently is because the season is the longest in Turkey. After London and Paris it was the third most-visited city by tourists in Europe in 2011, although it has maybe dropped down a few places now. We need to use this to our advantage because, for example, flights are a big problem for us. It would be great if airlines would fly here more often. For example, if Turkish Airlines would operate direct flights here from London and other main destinations like Paris, it would be a great boost for the number of guests coming into the area as well; and it’s another safety issue and another marketing upside. So I think the G20 will be our chance to say as a country that we can do better, and in terms of foreign investment there is a chance we can attract more within the region.

Away from the resorts, tell us about Antalya as a city. Aside from the luxury hotels, what can people expect?

Antalya is a nice city; it is the fourth or fifth largest in Turkey. It’s a beautiful city and, like I said, it has the longest season in Turkey because of its great weather. From a historical point of view it is very interesting, and it is also a good place to come and see different hotels if you are staying for a long time and if you like the all-inclusive luxury concept, because that is the concept most of these upscale hotels manage.

Antalya has been improving in many ways: there is a new football stadium for the football team. It is a very diverse destination, but the level of investment does not fully reflect the city’s potential, because there are a lot of high-scale hotels but the region in general could do a bit better in terms of investments in its surrounding areas, like I said.

How do you intend to capitalize on being the host venue of the G20 to grow the brand awareness of Regnum internationally?

We have limitations on what we can do now, because of safety and security before the G20, but we feel that, especially afterwards, we will be able to capitalize. Of course it will be impressive when we tell people that this was the main venue for the event and we will have pictures of the delegates hopefully in the main areas of the hotel. In addition, we will hopefully have photos of Obama playing golf with another delegate.

What are the competitive advantages of this resort that made the G20 organizing committee choose you as the main venue above all the others?

I think it is the quality. Our concept is suitable for this sort of event: it’s not a “sexy, chic” hotel; it is a simple but luxurious hotel and you will find that luxury in the details. And, of course, our convention center was another point in our favor, because of its size and the level of luxury it offers and the features it has. The size of the hotel was also an advantage, because it is a large hotel.

What kind of hospitality and treatment can the delegates expect when they come here?

There are still a lot of question marks about how involved we are going to be during the event. We are giving our staff special training right now to teach them how to act around the delegates and how to relate to them while they are here, but, again, we might be limited because of security reasons.

What is the potential for golfing and sports tourism here in Antalya, and how does your resort contribute to Antalya’s product offering in these niche areas?

Golf is very new in Turkey and it has picked up quite well very recently. There are around 15 golf courses within a radius of 20 minutes, so that is a big plus for any golf player. The concept of the hotels is very comfortable for golfers as well. In Spain, Portugal and other main destinations they might not get this level of service, transportation and the quality of products they can have access to. We don’t cut back on anything with our golfing guests; the level of services is the same so they have the advantage of using the products that the guests in the summer can use, even when it is out of high season.

The hotel has two great products: we have the Carya Golf Club, which is the only floodlit golf club in the whole of Europe. We have also recently acquired the national golf course, which is the first professional 18-hole golf course in Turkey. It also has a rich history because it is the golf course in Turkey. So we have those two great products and they have done well in the past and they are picking up as well. There are some problems in the golf sector and the competition has been really fierce, internationally and regionally, because there have been major drops in prices in Spain and Portugal, so that has an effect on us.

What would be the impact on Antalya as a golf destination if you had photos going around the world of Obama playing golf here?

It would be amazing, because people would like to experience something similar. Tiger Woods has been here twice in the past and the impact of that has been great on the region and the area, and it is a great way of saying that these people actually do come here. So there is a level of comfort and luxury and service that people can be happy with. It has great marketing value internationally because it can open up markets that we haven’t tapped yet. It can attract more people because if Obama comes, then maybe more Americans will start eyeing the region and it will give them a reason to research the area.

You also have first-class football facilities here and you operate a Chelsea FC Soccer School. How else do you capitalize on your football facilities?

This side of our business is picking up quite fast as well. We have already confirmed eight professional teams from around Europe that will do their winter training camps here. These are upscale teams, from Germany and Russia mostly. Fenerbache actually come here as well, they stayed here last year. Maybe we could increase interest further by organizing more tournaments in the region.

We have the Chelsea Soccer School, which raises awareness. The trouble with football is the bigger the teams get, the more they actually start to earn money from traveling abroad and staying in certain hotels in Dubai and Qatar, for example, because there are sponsorships involved. But this side of the business is good for the region and that is the important part.

Antalya has also been voted as the top M.I.C.E destination in the country. How competitive is Antalya globally as a M.I.C.E destination, and how important is your hotel to Antalya’s M.I.C.E product?

We feel that it can be much more competitive. Right now we are doing a lot of domestic meetings because of the size of the convention center and the all-inclusive concept and the level of quality it offers. But, again, we feel like flights are a big point of improvement here, because when companies are organizing events they want to do the least traveling possible, so the ease of transportation becomes a big part of the process when large groups of people are traveling together. I think we can do a lot more to help bring people here more easily, because we have all the facilities possible and we can definitely compete with the big players in the market on that area, but ease of transportation is a big point to look at.

Can you tell us more about Regnum’s international and national expansion plans?

Yes, we have a hotel in Bulgaria, and even though it has a completely different concept, it has helped us understand the hotel business a bit more. Regnum Carya was our first major hotel investment and after this we have purchased the hotel next door. So our plan for the future is to do another project here on an even better scale than this one. The concept will combine the two hotels in a way that offers easy access.

We feel that the brand is very strong and when we are ready we can take another step further and look at other destinations such as Dubai, Egypt, maybe Mexico or European destinations like Spain and Portugal. We feel the level of service that we provide in Turkey gives us a very good sense of what guests want and it will help us build on a concept that we can apply to other destinations as well. Other major groups have come here to look at the management of the hotel and the service, because they see the quality of the investment made here and they want their own brands to be here. Especially with the development of the project next door, they have a chance to participate.

The meeting of G20 Tourism Ministers this year will discuss the link between tourism and employment. How much of a contribution does Regnum make to employment in the tourism sector in Antalya?

I can give you an example: our main business in the Öztürk Group is our petroleum business, Opet, and in that company, in the main office, we employ about 780 people. But in the hotel we employ over 1,000 people directly. This is excluding the golf courses and the hotel next door. So it has a great impact on improving employment rates. There are also advantages with the currency: we make money in euros and dollars, but our expenses are all in Turkish lira, so it’s great for the current account deficit. We also improve the skills of people in the region because they take tourism classes and they learn more languages and it becomes a way to improve the region and the country in general.

As you mentioned, the main business for the Öztürk Group is oil. Why did you decide to move into the tourism sector?

We established Opet in 1992, and before that my parents were actually teachers. My dad was a physics teacher and my mum was a biology teacher. I’m going to tell you a bit about their story because it is interesting as well and they are known for the way they have become who they are now. So, they were teachers and they were asked to relocate to different cities from each other when they were already married, and after that my father said: “Ok, you stay on as a teacher, I’ll go into business and try my own thing.” So he picked up from there; first we had one fuel station and then we had five stations and then 20 and now we have more than 1,300 stations all over Turkey, as a brand. The company Opet has always increased its market share every year, so in 2002 we became 50-50 partners with the Koç Holding Energy Group and since then business has really picked up as well, because Koç is the largest conglomerate in Turkey.

From the investment we got from that sale we were thinking of diversifying our portfolio and trying different things. I actually started my property business in London, where I established our property company. We were doing little projects, and seeing where to invest our money and we knew our strengths were in Turkey, because there are a lot more projects coming our way and we could do many other things. So we started to grow in Turkey and, from there, we saw that the piece of land we had purchased would be more suitable for a hotel project than for a residential project.

This hotel in particular comes from my father’s love for golf; he started around 10 years ago and he loves the sport. So we built a golf course here six years ago and we were looking at what to do with the rest, because golf in itself in this region is not that feasible, so we decided to build a hotel next to it to make it feasible. But the project grew and grew, from 100 rooms to 200 rooms, until we said: “Ok, a large project is the way to go.” In my family, once we do something, we need to do the best. So it turned out to be one of the best hotels in the area. And it is going to grow with the new project.

I know you are a huge football fan so I will end with a themed question: if Regnum Carya was a football team, which one would it be?

Fenerbache! I’m a fan so I am biased. But I think the strength of it is, like Fenerbache, it doesn’t shout out: “I’m the strongest.” But once you enter the hotel, once you see the facilities, you really say: “This is a world-class hotel.” We believe if you were to pick up this hotel and put it in a region like Dubai it would be one of the top hotels in the region, and we would probably earn two or three times as much as we are earning right now. That is what we feel the quality of the hotel is and that is what we feel about the quality of Fenerbache also.