Between 2018 and the first five months of 2024, a total of 283 hotels in Türkiye have applied for bankruptcy protection, a legal form of debt restructuring. The significant rise in applications highlights the financial struggles faced by the hospitality industry over the past six and a half years.
In 2018, 37 hotels sought bankruptcy protection. This number surged to 76 in 2019, the onset of the COVID-19 pandemic, marking the highest annual figure in the last six and a half years.
A recent report reveals that hotels have been forced to reduce prices due to lower-than-expected occupancy rates, leading to decreased profitability. "Hotels facing difficulties in meeting debt payments are turning to concordat," the report states. "While 36 hotels applied for bankruptcy protection throughout last year, 23 have already filed in the first five months of this year."
A Resurgence in applications
The number of hotels seeking concordat spiked to 76 in 2019 during the global pandemic. Although there was a subsequent decline, applications are once again on the rise. Data compiled by Konkordatotakip.com from the Press Advertisement Agency indicates that while 36 hotels filed for bankruptcy protection in 2023, 23 hotels have done so in the first five months of this year.
Few successful outcomes
Despite the high number of applications, few hotels have successfully completed the bankruptcy protection process. Of the 283 hotels that applied between 2018 and May 2024, only 25 of the 104 granted temporary concordat have successfully concluded the process. During this period, 11 hotels that were granted temporary concordat ultimately declared bankruptcy.
