Of all Central and Eastern European capital cities, Bucharest saw last year the largest increase in the revenue per available hotel room (RevPAR), mainly due to the increase in the hotel occupancy rate, shows the Hotel Operator Beat Q4 2021 survey published by Cushman & Wakefield.

According to the cited source, this upward trend happened against the background of the relaxation of travel requirements and the rescheduling of several events from 2020 to 2021, specifically the European Football Championship, concerts and other sporting events. The market dynamics continues to raise the interest of hotel operators for expanding their own brands in Bucharest.

Of the 20 markets surveyed in the region, Prague, Warsaw, Budapest and Bucharest are the main cities of interest for the main operators. Compared to 2020, their interest has shifted from secondary or tertiary cities to capital cities, the real estate consulting company said in a release on Monday.

58 percent of the interviewed operators indicated Bucharest as an attractive and very attractive market, with the survey also revealing that the players who left the market at some point are very interested in re-entering Bucharest. Only a small number of operators did not report the capital as their main target for expansion, as their strategy is more focused on either the resorts in the country or Central and Western Europe.

"According to hospitality analytics firm STR, the average occupancy rate of Bucharest hotels was 32.1 percent in 2021, up by 77.7 percent compared to 2020, marking the highest advance of all the capitals in Central and Eastern Europe (Bratislava, Bucharest, Budapest, Prague, Sofia and Warsaw). Overall, the Bucharest hotel market reached a RevPAR of 20.5 euros, the third highest among the capital cities in the region, adversely affected by the decrease in the average daily rate (ADR). The explanation for this is the hotel owners' reliance, during the rebound period, on a volume-focused strategy, so that they have reduced the rates per room," the statement said.

Bucharest City's ADR in euro decreased by 5.9 percent in 2021 compared to 2020, mainly due to the low ADR between January 2021 and May 2021, as hoteliers put in efforts to increase the volume. However, there was a sharp increase in the ADR beginning with June 2021, as travel restrictions relaxed and rescheduled events resumed.

"It is important to note that with the easing of travel restrictions in 2021, although the market is still dominated by domestic demand, the demand for accommodation per night from international tourists has started to outpace demand from Romanians. Moreover, the Oxford Economics analysis of the 2021 tourist mix shows that it is similar to that of 2019. All this, as well as the fact that several hotel projects have been postponed, indicates that Bucharest will see a fast rebound of demand for the hotel industry," said Cushman & Wakefield Echinox consultants.

They point out that Cluj Napoca is another hospitality hub, as half of the respondents expressed interest in this city, one of Romania's fastest growing secondary markets.

"The growing attractiveness of the city draws the interest of large hotel chains. Most respondents are internationally renowned brands, some of which are not yet present in Cluj-Napoca or other cities in Romania. Although the market is currently dominated by independent hotels (77.9 percent of the current room offer), two new hotels will be developed in the next period, putting about 270 rooms on the market - Radisson Blu and Courtyard by Marriott," the cited experts say.

Other Romanian cities mentioned by the survey as target markets are Iasi, Constanta and Brasov, the latter being seen as a fairly dynamic hotel market given the future projects announced by 2023, which will total about 660 rooms in both international and local chains. In Constanta, IHG Hotels will develop approximately 100 new rooms by the end of 2022 under the Crown Plaza brand.

According to the Hotel Operator Beat survey, most operators expect hotel markets in tourist areas and regional cities to return faster to 2019 levels than capital cities.

"Bucharest is growing into a very dynamic Central and Eastern European market. This is visible in the healthy performance both in the pre-Covid and the rebound period, but also in the level of liquidity in 2021, when four hotels changed hands for a combined 19.2 million euros, and in the variety of future projects. In addition, our team is in the process of selecting an operator for one of the most important players on the market (whose name is kept confidential for the moment). We were delighted to see a high level of interest from international hotel chains for the capital of Romania and we noticed a growing desire to enter the market at operators who are not yet present, but who believe in the potential of the city," said David Nath, Head of Hospitality CEE & SEE at Cushman & Wakefield.

The survey authored by the real estate consulting company supports the hotel industry and presents the performance of the CEE market, looking at the preferences, plans and development projects of international and regional hotel operators active or interested in this region, as well as their views on the impact of the Covid-19 pandemic on the hotel market and its recovery.

The survey conducted in Q4 2021 was completed by executive members representing more than 30 operators already present or interested in expanding to CEE. The interviewed operators manage a total portfolio of over 730 hotels, with more than 121,000 rooms already operational in the region, and 590 hotel facilities with over 50,000 rooms in the planning phase.

The independently owned and operated Cushman & Wakefield Echinox, Cushman & Wakefield's exclusive affiliate in Romania, comprises a team of over 80 professionals and contributors offering a full range of real estate consulting services to investors, developers, landlords and tenants.

Cushman & Wakefield, one of the global leaders in commercial real estate services with 50,000 employees in 60 countries, helps tenants, landlords and investors optimize their assets. AGERPRES (RO - author: Nicoleta Gherasi, editor: Mariana Nica; EN - editor: Simona Klodnischi)