Martı Hotel/Narin: We Can Grow with All-Inclusive 2.0
Foreks - Emre Narin, Vice Chairman of the Board of Directors of Martı Hotel Enterprises A.Ş. (IS:MARTI), made notable statements regarding the 2024 and 2025 tourism seasons. Narin mentioned that 2024 has been very good for the Martı Group and expressed high expectations for the year 2025.
“Our revenue increased by 35% in Euro terms”
Emre Narin stated that they concluded a year with an increase in visitor numbers and tourism revenues, remarking, “The sector had a good year. Specifically for Martı Hotel Enterprises, our revenue increased by 35% in Euro terms during this period. We recorded a 22% increase in overnight stays compared to last year. We attribute these increases to the rise in tourism activities, the renovation investments we made in our facilities, and our marketing efforts in foreign markets.”
“Our profitability has shrunk”
Narin pointed out that while there has been high volume trade in 2024, profitability has narrowed: “This year's main challenge for the sector has been the declines in profitability. While there was high-volume trade, profit margins contracted due to rising costs. Our southern coasts operate within a 7-8 month seasonal cycle. The profits we generate in the summer should sustain us through the winter months and allow us to reinvest. When we consider the costs in the sector since June 2022, they have increased by 70% in Euro terms. It is not easy to convince foreign customers about these price hikes. We expect the inflation we are experiencing to decrease with the government program. As our Minister of Treasury and Finance, Mehmet Şimşek, mentioned to tourism stakeholders at the TIF 2024 conference, a downward trend in inflation has begun. One cannot overlook the strong position of the Turkish Lira, which is essential for the government’s policy to reduce inflation. As the tourism sector, we have always overcome challenges, and I believe we will overcome this current situation together.”
“We have recorded a significant increase in profitability”
Assessing 2024 and outlining expectations for 2025, Emre Narin emphasized that Martı Hotel Enterprises had a successful year, continuing, “We recently announced our financial statements for the first six months of the special accounting period from April 1, 2024, to September 30, 2024. While our revenue increased by 35% in Euro terms, our EBITDA rose by 160%. Our revenue reached 905 million TL with an 86% increase, and our Net Profit increased to 427.8 million TL with a 214% rise. The 146% increase in our operating profit is driven by the rising overnight prices and the increasing share of direct sales within total sales.
Next year, we aim to minimize the impact of inflation on our profitability through timely purchasing planning. If there are no geopolitical issues in 2025, it looks like it will be an even better year commercially.”
“We also need financing”
Emre Narin stated, “The motivation provided by the government is very important,” and said that it would be a positive development for the sector if there were an opening for investment and renovations in tourism led by state-backed loans in the upcoming period. Narin added, “Because the sector needs financing for renovation efforts. Since the pandemic, there has been a shortage of internal resources. If this opening is created, it will greatly benefit our sector. Hotels need to be renovated at least every 10 years. There are significant tourism investments being made around the world, especially in the Middle East and specifically in Saudi Arabia. New products and destinations are emerging in the market. We need to undertake renovations with these new investments to retain our existing customers and remain attractive to new ones.”
“We must increase direct sales”
Reminding that the main source markets for Martı Hotel Enterprises are Russia, the UK, and Germany, Narin stated, “Direct sales are very important for us. Hoteliers and tour operators are always in the same boat. Tour operators have made a significant contribution to how the sector has evolved. However, with developments in global digitalization, the concept of ‘dynamic sales’ has become prominent. This means customers purchasing both their hotel and transport online. When we talk to hoteliers abroad, their point of pride and success metric is increasing their direct sales. In the resort area, some hotels have direct sales ratios of up to 45%. Our partners, the tour operators, who have greatly contributed to our sector entering the top five in the world, are also adapting to this change. The collaboration model with them will continue shoulder to shoulder going forward.”
“We can grow with the All-Inclusive model”
Emre Narin stated that Turkish hotel chains do not need to invest abroad to expand internationally, saying, “The growth of the world’s top five hotel chains is based on management acquisitions and franchising. These chains did not grow by owning the buildings and lands of hotels. They grew by managing others’ properties in other countries or increasingly through franchising recently.
We are the undisputed best in the world at operating the All-Inclusive system. There is no barrier to us applying this model abroad through management or franchising. Saudi Arabia is investing $800 billion and is saying, ‘Please come and bring your expertise here’. The All-Inclusive system is something we can export. We can grow our chains by managing operations in other countries. I also think there is a sociological side to why this hasn’t been done until now. Most companies in Turkey are family businesses. We have a mindset formed from a young age, saying, ‘Let’s create something tangible and pass it on to the next generation’. We should certainly do that, but we also must elevate Turkish hotel brands on the world stage by managing operations or franchising using our knowledge of the All-Inclusive concept in other countries. As Martı Group, we have thoughts for both our country and our nearby geography regarding this in the coming period.”
“The All-Inclusive model cannot be eliminated”
Emre Narin indicated that the All-Inclusive system is a vital component of Turkish tourism and cannot be removed, stating, “The All-Inclusive model has placed Turkish tourism among the leading countries in the world. However, it has been 30 years since we implemented this system. During this time, customer perceptions around the world have changed significantly. Today, sustainability is the most important issue for ourselves and future generations. As is known, the All-Inclusive model can lead to a lot of waste. Customers are now noticing this and they want change. We need to, in my favorite term, ‘reformat’ this system or create an ‘All-Inclusive 2.0’. For instance, if we are serving 100 different dishes, we could provide 50 varieties instead; the number of beverage options can also be reduced. Our customers are ready for this even more than we are. Without compromising our service quality, we can offer a somewhat simplified but elevated quality food and beverage selection, fulfilling our responsibility for a sustainable world while satisfying our customers. Achieving this adaptation requires unity and working as one. We must move together. The elimination of the All-Inclusive model is impossible because there is considerable demand in the global travel sector, which is expected to grow by about 55% over the next ten years. If this system reaches a certain standard, it will be healthier. There is significant income inequality worldwide. Everyone is cautious about their spending. The All-Inclusive model is an excellent system, especially for families. There is no point in tarnishing this beautiful system that gives us a competitive advantage. If we redesign this system, Turkish tourism will become much more successful, and furthermore, it would mitigate the impact of the recent cost pressures we have experienced.”