[Expat voice] Why small hotels are struggling

On the contrary, this year we find ourselves worse off than ever, having just scraped through the winter season when the hotel is closed and struggling to find the funds to open it. And the volcanic cloud is the least of our worries.

Certainly the optimism with which we started the project caused us to make some mistakes. At that time tourism was growing fast in the area, and the competition for beds led to tour operators offering good prices and guaranteed contracts. We based our calculations on that, not imagining that as the number of hotels increased, these guaranteed contracts would become a thing of the past -- at least for small hotels -- and the price paid by operators would drop drastically. For our first three seasons I refused to accept these prices and took only direct bookings. We survived the economic crash of 1998-9, managed to hang on to the hotel and eventually paid off the bank loan we had taken to finish building. Some of our guests -- both British and Turkish -- have been staying with us for years. So why are we struggling now?

Of course there is a financial crisis in Turkey and Europe -- but mostly that is supposed to benefit us, as people choose lower cost locations and accommodation. The problem is that in the struggle to attract guests, prices are being pushed down to an impossible level.

We have now been working with various tour companies for several years. The price they pay us for a four-person apartment varies from 15 pounds to as little as 5 pounds in the low season -- and they still ask for further discounts! Some are so unscrupulous that customers specifically asking for our hotel are told it is full and sold alternative accommodation -- usually one contracted at a lower price. Most guests are amazed to learn that the money they pay in advance of their holiday never reaches us until after their stay -- sometimes months after. We have often still been waiting for part of the previous season’s payment when we open the following summer.

We continue to work with tour operators because while in high season it is easy to fill the hotel, in low season it is difficult. Whereas we used to attract new customers with adverts in local and regional papers, in these days of the Internet those ads no longer get the same returns. However, the Internet has not become the marketing tool we had hoped it would be. Despite having a website for eight years and having various people “in the know” trying to move us up the list on the search engines, it is still hard to find our site on a search of, say, “holiday apartments Fethiye.” I have come to the conclusion that the only way to get into the top few on the list is to pay big money, which we are not in a position to do.

Once potential guests make contact, there is still the problem that though the price of the apartment is low, the price of flights can be prohibitive. With tour operators controlling many of the flights to Dalaman, it is sometimes possible to buy a package holiday for less than the price of a flight ticket, and while regular customers are prepared to pay extra to stay with us, it is often hard to persuade new people.

But the most pressing problem of all is that the sums just don’t add up any more. We charge 22 pounds a night for a room -- 2 pounds more than when we opened in 1998, but in the meantime expenses such as electricity, wages and pool chemicals have doubled and tripled. Why don’t we charge more? Because we would price ourselves out of the market. I spoke last week to a couple staying at a hotel on the seafront who paid 70 pounds for two weeks in a bed and breakfast for TWO people. One philosophy is that you keep the room prices down and make money on “extras” in the bar and restaurant, but there are places advertising large Efes beer at TL 2.5, when the cost is over TL 2. Can anyone really make money at these prices?

The only way this situation is going to improve is if we -- the owners of small hotels and other businesses serving tourists -- recognize the value of the product we are offering and have the confidence to set prices at a level where we can make a living. Visitors can see that the cost of living has increased in Turkey, and I believe that most will understand that prices need to reflect this. They will still get better value-for-money than in many holiday destinations and will benefit directly from an improvement in standards of accommodation and service. And if we lose the type of tourist who thinks they should be able to pay 1990 prices for rooms and drink all night for 10 pounds, it won’t make us any worse off.