The Dubai-based division of Millennium and Copthorne Hotels is entering Turkey despite a tourism slowdown.
The Middle East and Africa unit of the London-headquartered hotel company signed a deal with Altin Istanbul to operate the Millennium Golden Horn Hotel. The 125-room Istanbul property is expected to open next year.
The Golden Horn neighbourhood is located on the European side of Istanbul, and previously featured a trading harbour and a residential area during the Byzantine period. The property is spread over 11,000 square metres and features renovated historic buildings.
The Turkish tourism sector has nosedived after a series of terror attacks in the first half of the year and a coup attempt in July. This has been coupled with economic woes.
Still, the decline of the Turkish lira to its lowest against the US dollar in a year last week may offer some tourists better value for money.
During the second quarter, tourism income declined by 35.6 per cent to US$4.98 billion compared to the same period last year. The number of visitors decreased by 30.3 per cent compared to 7.49 million compared to a year earlier, according to the latest data from the Turkish Statistical Institute.
“The economic situation worsens as manufacturing, trade, retail and tourism slow down,” said Maya Shehayeb, an analyst at Euromonitor International. “The duration that the government will take to settle its international political conflicts and local tensions will dictate how quick it will improve the high-growth prospect.”
Millennium and Copthorne, similar to other UAE hotel operators looking to expand in Turkey, is banking on its popularity with Arabian Gulf visitors.
“We are confident that due to concrete measures put in place by the government, Turkey’s tourism industry is on the path to recovery,” according to Francois Kassab, the chief operating officer at Millennium and Copthorne for Middle East and Africa.
Jumeirah Group expects to open its third property in Turkey in 2018. Hotel operator Rotana will add three properties in Turkey before 2020.
Millennium and Copthorne currently operates 28 hotels, including 10 in the UAE, and has 12 hotels in the pipeline in the next year. It expects to expand its portfolio to 100 properties by 2020 in the Middle East and Africa region.
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What should do investors do now?
What does the S&P 500's new all-time high mean for the average investor?
Should I be euphoric?
No. It's fine to be pleased about hearty returns on your investments. But it's not a good idea to tie your emotions closely to the ups and downs of the stock market. You'll get tired fast. This market moment comes on the heels of last year's nosedive. And it's not the first or last time the stock market will make a dramatic move.
So what happened?
It's more about what happened last year. Many of the concerns that triggered that plunge towards the end of last have largely been quelled. The US and China are slowly moving toward a trade agreement. The Federal Reserve has indicated it likely will not raise rates at all in 2019 after seven recent increases. And those changes, along with some strong earnings reports and broader healthy economic indicators, have fueled some optimism in stock markets.
"The panic in the fourth quarter was based mostly on fears," says Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management Company. "The fundamentals have mostly held up, while the fears have gone away and the fears were based mostly on emotion."
Should I buy? Should I sell?
Maybe. It depends on what your long-term investment plan is. The best advice is usually the same no matter the day — determine your financial goals, make a plan to reach them and stick to it.
"I would encourage (investors) not to overreact to highs, just as I would encourage them not to overreact to the lows of December," Mr Schutte says.
All the same, there are some situations in which you should consider taking action. If you think you can't live through another low like last year, the time to get out is now. If the balance of assets in your portfolio is out of whack thanks to the rise of the stock market, make adjustments. And if you need your money in the next five to 10 years, it shouldn't be in stocks anyhow. But for most people, it's also a good time to just leave things be.
Resist the urge to abandon the diversification of your portfolio, Mr Schutte cautions. It may be tempting to shed other investments that aren't performing as well, such as some international stocks, but diversification is designed to help steady your performance over time.
Will the rally last?
No one knows for sure. But David Bailin, chief investment officer at Citi Private Bank, expects the US market could move up 5 per cent to 7 per cent more over the next nine to 12 months, provided the Fed doesn't raise rates and earnings growth exceeds current expectations. We are in a late cycle market, a period when US equities have historically done very well, but volatility also rises, he says.
"This phase can last six months to several years, but it's important clients remain invested and not try to prematurely position for a contraction of the market," Mr Bailin says. "Doing so would risk missing out on important portfolio returns."