In 2016, hotels in Bucharest recorded a 4.7% increase in occupancy rate compared to the previous year, a growth rate nearly twice as high as in Prague or Warsaw, while the average rate increased by 5.8%, in the context where the regional hotel industry attracted significant investments last year and maintains high growth potential, according to a report by the consulting firm Cushman & Wakefield.
A larger number of tourists chose destinations in Central and Eastern Europe in 2016, so the occupancy rate returned to or even exceeded pre-crisis levels, reaching an average of 72%, compared to 69% during the crisis period.
Bucharest had an occupancy growth rate nearly double that of other capitals in the region, stated Marius Grigorica, senior broker at Cushman & Wakefield.
Bratislava recorded the highest occupancy growth rate in 2016, at 10.2%, followed by Sofia with 6.3%, Bucharest – 4.7%, Warsaw – 2.8%, Budapest – 2.7%, Vienna – 2.5%, and Prague – 2.4%.
As the cost of travel in the region advanced and hotel room rates increased, profits were also on the rise. The average daily rate per room increased from 73.6 EUR/day in 2015 to 76.6 EUR/day in 2016.
Bratislava recorded the highest rate increase – 9.5%, followed by Budapest – 6.1%, Bucharest and Sofia with 5.8% each, Prague – 3.4%, Warsaw – 3.1%, and Vienna – minus 2.1%.
The volume of investments in the hotel industry at the Central and Eastern European level increased by 66% in 2016 compared to the previous year, up to 1.2 billion EUR, but Austria held the largest share, with nearly 800 million EUR transacted, representing 67% of the total investment volume.
In other markets in Central and Eastern Europe, the volume was lower than in 2015, with Poland recording the largest decline, with more than half of the previous investment volume.
The Czech Republic attracted 18% of total investments in Central and Eastern Europe. Most investments took place in Prague, where seven transactions were completed, including Old Town Hilton, Park Hotel, and Chopin Hotel, the report states.
For this year, consultants expect an addition of 4,000 rooms in Central and Eastern European capitals. The markets with the highest development prospects are considered to be Warsaw and Budapest.
Source: Economica
Frequently Asked Questions
What was the hotel occupancy growth in Bucharest in 2016?
Bucharest recorded a 4.7% increase in hotel occupancy, a growth rate nearly double that of other regional capitals like Prague or Warsaw.
Which CEE city saw the highest occupancy growth in 2016?
Bratislava recorded the highest occupancy growth rate in the region at 10.2%, followed by Sofia at 6.3% and Bucharest at 4.7%.
How did hotel investment volumes change in Central and Eastern Europe in 2016?
Investment volumes in the hotel industry rose by 66% to 1.2 billion EUR, with Austria accounting for the largest share at nearly 800 million EUR.