Doubletree by Hilton Oradea is put up for sale
The Doubletree by Hilton Oradea hotel, a 4-star establishment within the portfolio of SIF Hoteluri, almost entirely controlled by SIF Banat-Crisana, is to be put up for sale.
The unit was put up for sale due to problems generated by the coronavirus pandemic, but also against the backdrop of an acute lack of qualified personnel and rising prices for raw materials, goods, and utilities, as well as high brand and management costs.
Restrictive measures had an extremely harsh effect, especially on tourism, and as the health crisis deepened, the economic effects on the hospitality sector became increasingly evident.
Extreme mobility restrictions and recommendations to avoid business travel led to low occupancy rates for both hotel accommodations and conference rooms or other locations for corporate events.
Locally, in the last two years, hotels were forced to temporarily suspend all activities (HoReCa) during full lockdown periods and subsequently partially, complying with applicable restrictions according to regulations imposed by authorities.
The Government launched a series of support programs for economic agents operating in the HoReCa industry, but the tension generated by the lack of perspectives was not long in coming.
In addition, despite efforts to retain employees, the temporary closure of activities for companies operating in HoReCa and the uncertainty regarding when COVID-19 would disappear led to a significant number of layoffs in the hospitality industry.
Many employees in this sector have retrained, and there is already an acute shortage of specialized personnel in the hotel services market, which will amplify even more when real recovery perspectives emerge.
On the other hand, we note that there is no certain direction regarding the evolution or involution of the pandemic situation, with the possibility/risk that the pandemic will continue to be present over a much longer time horizon than the forecasts mentioned in the Romanian hotel market analysis report.
In the economic context presented above, the activity of the hotels in the SIF Hoteluri portfolio was seriously affected by the crisis generated by the pandemic, a situation brought to the attention of shareholders by the company in the periodic reports published in 2020 and 2021. Following an in-depth internal analysis regarding the activity of the hotel operated under the DoubleTree by Hilton brand, considering: the negative result recorded from opening to the present by Hotel Doubletree by Hilton Oradea and the avoidance of accumulating additional losses; high brand and management costs; the high CAPEX requirement to compensate for the physical and moral wear and tear of fixed assets and inventory items; the acute lack of qualified personnel and the increase in prices for raw materials, goods, utilities, etc.; the risk of the pandemic continuing for longer periods of time that would undermine the activity and income generated by the hotel complex; the post-pandemic economic crisis; in the absence of realistic/sustainable perspectives for the growth of the hotel business that would lead to a substantial and effective improvement of the performance indicators of SIF Hoteluri SA, the proposal to sell the Doubletree by Hilton Oradea hotel is submitted for shareholder approval, together with all movable, immovable, tangible or intangible assets and contracts related to the continuation and conduct of hotel activity at the highest quality standards, in the form of a transfer of assets and liabilities as a universal title of goods, these not being treated individually, but as a unitary whole representing an independent business in accordance with the provisions of the Tax Code.
The Hilton hotel group affiliated the Oradea hotel in 2009, with the modernization investment indicated then at EUR 15 million.
Frequently Asked Questions
Why is Doubletree by Hilton Oradea being sold?
The sale is driven by accumulated financial losses, the impact of the pandemic, acute staff shortages, and high operational and brand management costs.
Who is the current owner of the hotel?
The hotel is part of the SIF Hoteluri SA portfolio, a company majority-controlled by SIF Banat-Crișana.
How will the sale process be conducted?
The hotel will be sold as a unitary whole through a transfer of assets and liabilities, including all property and contracts necessary for its operation.