The Romanian hotel market remains attractive for hotel operators
The hotel market in Bucharest, although heavily affected by the impact of the COVID-19 pandemic, continues to be of interest to hotel operators looking to expand their network.
The main cities of interest for major operators in Central and Eastern Europe, as well as in the European Economic Area, are Prague, Budapest, Warsaw, and Bucharest.
Major operators show confidence regarding the market’s recovery, anticipating that the rebound will occur between 2022-2023 in smaller cities and between 2023-2024 in capitals.
In Romania, the volume of hotel asset transactions reached approximately EUR 9.5 million in 2020, a decrease of 87% compared to the volume of nearly EUR 75 million in 2019.
From the operators’ perspective, Bucharest was one of the most attractive markets in the CEE and SEE regions, closely following more developed markets such as Warsaw, Prague, or Budapest, according to the Operator Beat survey. Other target cities in Romania mentioned by international operators were: Cluj-Napoca, Timisoara, Iasi, Constanta and Brasov – where the presence of international brands is low.
Regarding hotel performance, the occupancy rate reached its lowest level, 5.1%, in May 2020, due to government restrictions on hotels and travel.
With the easing of restrictions, the occupancy rate began to increase during the summer period, reaching its highest level (17%) in September 2020, before starting to decline again as a result of the second wave of COVID-19 infections. Meanwhile, the average daily rate (ADR) for the Bucharest market reached EUR 68 in 2020.
COVID-19 caused delays or even cancellations of projects in the CEE/SEE region, which may be good news for hoteliers from the perspective of limiting supply growth and facilitating a faster recovery of the local market.
Most operators expect a faster recovery of major regional cities than at the capital level, with 53% of respondents predicting the hotel market’s recovery in 2023.
Frequently Asked Questions
Which Romanian cities are most attractive to international hotel operators?
Bucharest remains the primary target, followed by regional hubs like Cluj-Napoca, Timisoara, Iasi, Constanta, and Brasov, where international brand presence is currently low.
When is the Romanian hotel market expected to recover?
Operators anticipate a recovery for smaller regional cities between 2022-2023, while capital cities like Bucharest are expected to rebound between 2023-2024.
How did COVID-19 impact hotel transaction volumes in Romania?
The market saw a significant drop, with transaction volumes falling from approximately EUR 75 million in 2019 to about EUR 9.5 million in 2020, an 87% decrease.