2009: 20-30% drop of hotels' asset values in Romania

Sorin Ionescu, managing partner of Fivestar Hospitality consultancy company, stated at the Hotel Investment Forum that it is possible that hotels’ assets in Romania will drop by 20-30% this year.

At the same time, the representative of Fivestar Hospitality mentioned that 2009 is a good year for the new brands that already announced their intention to enter the Romanian market and that investors might taking advantage of very good prices on lands.

If in 2008, the growth rate in hotel industry was of 12%, this year the rate will not exceed 3%, estimated Ionescu.

The occupancy rate in hotels and tariffs per room registered significant drop at the beginning of the year, which can be explained by the increased accommodation supply in Bucharest. In 2008, 3,500 new rooms entered the market reaching thus 10,929 bed places in 158 hotels. 

Sorin Ionescu also stated that the transactions volume of the national hospitality industry will be reduced by 70%.

At present, there are 4 hotels under developing on the market in Bucharest. The construction works for other 9 units in the capital will start within 12 months and 15 projects are planned ahead, stated the representative of Fivestar Hospitality, quoting sourse Lodging Econometrics.

According to Sorin Ionescu, the hotel market in Romania will not face recession this year, although it registered significant decreases in the first months of the year. Moreover, the Fivestar Hospitality representative considers the market will recover in 2010.

A study developed by Cameron McKenna consultancy company, attending the event, considers Romania one of the markets under developing, together with Bulgaria and Croatia and one of the few countries showing optimism in the context of the actual crisis. It is likely that 2009 will exceed expectations even though several companies cut budgets and would rather choose less expensive hotel services, stated Daniel Bilak, manager of Cameron McKenna company.

According to a report of Deloitte Touche Tohmatsu, the occupancy rate of hotels in Bucharest registered one of the highest decreases in Europe in 2008, from 19.6% down to 57%.  

Sursa: Bloom Biz [17.03.2009], Capital [17.03.2009], Curierul National [18.03.2009], Daily Business [17.03.2009], einformatii [18.03.2009], Financiarul [18.03.2009], Gardianul [18.03.2009], Business Standard [18.03.2009], Money Channel [18.03.2009], Travel Manager [18.03.2009], Wall-Street [18.03.2009], Ziarul Financiar [17.03.2009]