The hotel market in Romania could go through a diversification process in the next year, as new brands are looking to close leasing contracts or partnerships with real estate developers for management and franchising contracts, according to real estate consultancy Colliers International.
The company says that the hospitality industry in Romania has expanded in the past three years from the point of view of occupancy rates and the average room price, but there were few new projects coming on the market.
“However, recently, young German, Austrian and Polish brands that have already covered the hotel markets in their countries of origin, have started looking for opportunities to expand in emerging markets in Southeastern Europe. On the Romanian market, such brands have initiated discussions with real estate developers, even proposing to co-finance the projects,” said Colliers International.
In Bucharest, such projects could be developed in the Old Town, Floreasca-Barbu Vacarescu or Calea Victoriei areas.
“From the perspective of costs, the option of brand hotels to rent buildings in these areas is profitable. For a hotel, the amount of the rent is equivalent to around 20 percent of the turnover and can be similar to the amount paid by tenants from office buildings,” said Raluca Buciuc, associate director Valuation Services and Hospitality Advisory Services at Colliers International.
The number of tourists in Bucharest rose by 63 percent in the last five years, while the occupancy rates of four and five-star hotels was on average at 75 percent.
This year, investors will start the construction of a new hotel affiliated to Marriott Courtyard in Floreasca-Barbu Vacarescu area.