Zirve Eki - ISTANBUL REstate

for the time being the focus is there. But you cannot currently force
or enforce your green aspect to the investment for the time being
because the technology sometimes is either not available or very
expensive from a conventional system. But it is becoming rapidly
available and cheaper. So you will see them penetrating in not only
to Marriott or Hilton but to many of the other brand as well.
Alaeddin Babao¤lu: Mike, coming back again to our secondary
cities. Although I mean, we can also call partially, as I said, tertiary
cities because we have one million inhabitants plus or minus I think
some twenty cities. And we have another 40 - now 500.000 so and
you have just recently opened a hotel. I mean, you have now the
experience. What would you highlight here? You know, the challenges
with regards to even to find the right stuff, the delivery, the qualities.
What are your experiences there? I mean about your hotel in Kütahya
you have just recently opened.
Mike Collini: We opened Kütahya two months ago so it is still sort
of very early days. But there is some interesting feedback in terms of
how the brand adapts to the local market. So we are using that
feedback in terms of how we go forward. I think the biggest challenge
is just really focusing on providing a focused service mentality. Now
whilst labor cost is still cheap in Turkey, you know, we want to
maximize returns for our owners and so there is no point in trying to
impose a full service upscale mentality on a market where you just
haven't got a right to command it. So I think that experience which
we are now learning from, I think he is going to set us up, going
forward. So that is really you know the key learned so far.
Alaeddin Babao¤lu: I mean the biggest challenge I could imagine
was also the right trained staff. Although it is focus service in this
regional places to establish this. Tar›k how do you see it if a hotel
investor comes and says I have a project in Samsun? Are you normally
preferring to set up the deal by yourself like the management contract
or franchise? Do you make their differences between the cities or you
go?
Tar›k Nasser: As I said earlier, we take every deal even within the
same city on case by case basis. As I said, we are still a brand that is
trying to penetrate the market. We haven't been in the market as
long as Hilton. So Hilton is confident enough to actually pursue more
franchise deals in comparison to us. We still would like to handpick
our owners that we would like to franchise our brands to because
first we have to establish the brand. We have to make sure that they
are introduced into the market properly and they are managed properly.
Having said that, there are very capable local operators in the country.
We have had our Renaissance brand franchise for a long time in
Turkey. There is one in Istanbul, there is one in Erzurum. Actually
probably one of the first internationally branded hotels in this one of
the secondary cities as a ski resort but anyway it has been there. And
for instance coming back to your example in Samsun, we actually
looked in Samsun and we found out that the demand in Samsun is
calling for a full service hotel whereas we would, if we didn't have
the focus and we didn't go there and look, we would say, well, this
is not a full service market. So one has to really go and see it after
having gone through all the statistics and the Internet. One really has
to go there as present, that is probably why Mike is travelling so much
because there is nothing like going there and having firsthand
experience. Talking to people, talking to locals, visiting restaurants,
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local flavor then you can make a certain judgment on that.
Alaeddin Babao¤lu: The city of Samsun which we were also
looking at very carefully. The next 5 to 10 years they will see a bigger
development with regards to this energy channeling towards Ceyhan
and everything.
Tar›k Nasser: Agreed.
Alaeddin Babao¤lu: And the harbor will be bigger. This is also part
of the, of course, strategy. We need to look to that. With Entegre,
concerning construction period, not only the pricing but how do you
see, okay, Samsun is a developed city but in a rather more moderate
city, how do you see the construction timing? Is it achievable? How
would you structure or how do you see as a project management
company a secondary city?
Kemal Okumufl: Normally TDD studies and feasibility studies for
hotel projects and the design period takes around one year but as we
spoke about Samsun, Samsun is a specific case. We worked for a
project. It was part of a shopping center. It was normally over that
period because developers and the owners in Turkey look for quick
return of their investments and normally the hotel investment is
compared to shopping centers or residential projects, as longer period.
So because of that project is on the hold at the moment. But on the
design wise for an international branded hotel, also we worked for
another hotel in Adana. It took around a year to develop the design
as per the international standards. But normally construction periods
are shorter in Turkey compared to European standards and of course
the construction costs are lower compared to European costs.
Alaeddin Babao¤lu: Yes. Mike?
Mike Collini: I'll agree that the Turkish contractors are the best in
the world. They have got into new markets and you know, once you
have overcome that permit, that design, that sort of application process
and you are ready to go. I'm just amazed that the speed that some
of these construction sites continue to grow. But it is getting the first
bit right. You need a good architect. Hotels are all about operational
efficiency. You need a good experienced hotel architect. Once your
design is ready, the construction phase is going very much quicker
than western European countries. With hotels you just have that