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BUCHAREST HOTELS RECORDED THE HIGHEST INCREASE IN THE NUMBER OF OVERNIGHT STAYS IN CEE, OVER 10% PER YEAR

Bucharest, October 2018: The Central and Eastern European (CEE) hospitality market is showing a positive evolution, with all the performance indicators higher than in the previous year. Between 2013 and 2017, Bucharest stands out with an average increase of overnight stays of 10.1% per year, the highest in the region, according to the real estate consultancy firm Cushman & Wakefield’s latest CEE Hospitality Snapshot 2018 report.

Therefore, Bucharest overcomes the main CEE capitals, namely Vienna, Prague, Budapest, Warsaw, Bratislava and Sofia, creating the basis for a sustainable development of the accommodation capacity. However, with a number of 3.2 million overnight stays in 2017, Bucharest still considerably lags behind Prague (18 million overnight stays), Vienna (15 million), Budapest (10 million) and Warsaw (6 million), surpassing only Bratislava (2.7 million) and Sofia (2 million).

“Warsaw needs to improve its visibility as a tourist destination. Similarly, the demand in Bucharest is generated mainly by the corporate segment. Despite this, the average occupancy rate in Bucharest is quite high (73.6% in 2017), with top international hotels registering over 80% occupancy rates, being fully occupied for six months per year “, according to Cushman & Wakefield real estate consultants.

The average hotel rates in Bucharest were 78.1 euro/ night during 2017, higher than in Sofia (76.1 euro/ night), Warsaw (75.4 euro/ night) and Bratislava (63.6 euro/ night), but below Vienna (96.9 euros/ night), Prague (87.5 euros/ night) and Budapest (84.3 euros/ night), according to the hotel industry research firm STR Global, quoted by Cushman & Wakefield.

By adjusting the average daily rate with the occupancy rate (calculated by STR at 73.6% for Bucharest in 2017), it appears that Bucharest hotels recorded an average of revenue of 57.5 euro/ night for each available room (RevPAR), a 6.4% increase compared to the previous year. Moreover, the RevPAR maintained this positive trend in H1 2018, increasing by 4.7%, to 60.2 euro/ night.

The solid results recorded by the hotels in the CEE region during the past few years have attracted both the developers’ attention and also the investors looking for higher returns compared to Western markets. While in cities such as Prague, Budapest or Vienna, it is now more difficult to find land plots or buildings that can be converted into hotels, in Warsaw, Bucharest or Sofia the accommodation capacity will continue to increase in the coming years, with at an average annual rate ranging between 3.9% (in Bucharest) and 8.5% in Warsaw.

In Bucharest, several hotels that will be affiliated to international chains are scheduled to be opened in the next few years, namely Courtyard by Marriott, Ibis Styles (Ştirbei Voda), Hotel Indigo (George Enescu – Georges Clemenceau), Corinthia Grand Hotel du Boulevard, Moxy by Marriott, or Autograph Collection.

Cushman & Wakefield Echinox is the exclusive affiliate of Cushman & Wakefield in Romania, owned and operated independently. With a team of over 50 professionals and collaborators, offers a full range of services to investors, developers, owners and tenants across all segments of the real estate market, including the residential market. For more information, visit our website www.cwechinox.com

Cushman & Wakefield is a leading global real estate services firm with 45,000 employees in more than 70 countries helping occupiers and investors optimize the value of their real estate. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $6 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visit www.cwechinox.com.

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