Main Streets Across the World 2024
Bucharest, March 2021: Though significantly affected by the COVID-19 pandemic and its impacts, the Bucharest hotel market continues to receive attention from hotel operators to expand their networks. In the CEE & SEE region, Prague, Budapest, Warsaw and Bucharest are the top-ranking cities of interest amongst major operators. Operators show confidence when it comes to the market’s recovery: they predict smaller cities to recover between 2022 and 2023, and capital cities between 2023 and 2024.
Cushman & Wakefield, a leading global real estate services company, presents its Hospitality Operator Beat Q4 2020, a survey amongst selected international and regional hotel operators active or interested in the CEE and SEE region, including the Romanian hotel market. The survey investigated the preferences, plans and developments of hotel operators, as well as their views on the impact of COVID-19 and the expectations of market recovery. The purpose of this survey is to enhance the understanding of the CEE & SEE hospitality markets and prospects for the sector recovery, and thus support industry stakeholders in their business activities across the region.
In Romania, the transaction volume reached about EUR 9.5 million in 2020, down 87% from approximately EUR 75 million in 2019. This was in line with the general trend that we saw in CEE & SEE. Due to COVID-19 restrictions, investor activity was put on hold in 2020 and many sellers postponed their planned sales. However, investor interest in Romania remains relatively strong due to a clear basis for future growth in the local hotel market, coupled with the flow of the expected new capital into the hospitality sector from 2021.
Similarly, from the operators’ perspective, Bucharest was one of the most highly attractive markets in the CEE/SEE region, following closely behind the more developed markets of Warsaw, Prague and Budapest, according to the Operator Beat survey. Other cities in Romania mentioned by international operators as their target markets included Cluj-Napoca, Timisoara, Iasi, Constanta and Brasov – where brand penetration is significantly low.
COVID-19 has been causing delays or even cancellations in several projects in the CEE/SEE region, which can be good news for hoteliers, as it is likely to constrain supply growth and facilitate a faster market recovery. In Bucharest, despite the challenges faced by the market, a few fresh hotels opened, including the Moxy Old Town (July 2020) and Holiday Inn Bucharest Times (January 2021). In addition, the ongoing projects under construction, such as the Autograph Collection in the Old Town center, or the room extension and renovation of the Radisson Blu Complex, are due to open in 2021 and 2023 respectively.
According to the Operator Beat survey, the majority of operators are expecting major regional cities to recover earlier than capital cities, with 53% of respondents expecting these markets to recover by 2023. This is in line with Oxford Economics’ forecast, where tourism demand in Bucharest is similarly expected to fully recover by the same year.
Bogdan Gubandru, Director Investment Agency, Cushman & Wakefield Echinox: “Before the pandemic, the hospitality market was under-supplied, an aspect that will be highlighted again, with the end of the restrictions and the economic recovery. Significant opportunity remains and developers will align their delivery of new hotels with the return to some form of normality in terms of travel. We expect to see a steady return of business travel in the second half of 2021 and decent under-lying domestic demand around the country.”
Sevda Cadir, Hospitality Advisor CEE & SEE Cushman & Wakefield: “The Bucharest hotel market had been driven by international business demand; hoteliers had thus faced a difficult year in 2020, due to the market’s sharp decline of its main demand generator. Despite the current challenges in the market, however, the outlook for Bucharest hotel sector remains positive on the long-term perspective.”
Frederic Le Fichoux, Head of Hotel Transactions, Continental Europe Cushman & Wakefield: “In the past years, Bucharest has recorded an impressive demand growth, which is reflected in the strong occupancy levels the market has achieved. Despite the short-term challenges for hotels in the city, investors and operators remain optimistic on its long-term prospects, with continued keen interest in the market and expectations of a relatively quick recovery. Accordingly, Bucharest is increasingly becoming a highly attractive market amongst local and international investors and operators.”
Cushman & Wakefield Echinox is a leading real estate consulting company on the local market and the exclusive affiliate of Cushman & Wakefield in Romania, owned and operated independently, with a team of 60 consultants offering a full range of services to investors, developers, landlords and tenants.
Cushman & Wakefield, one of the global leaders in commercial real estate services, with 53,000 employees in over 60 countries and € 8.8 billion in revenue, provides asset and investment management consulting services, capital markets, leasing, properties administration, tenant representation, design and evaluation services. For more information, visit www.cwechinox.com.
