The economic crisis impacted mostly the Eastern Europe hotel market

The revenues of hotel owners in Eastern Europe faced the largest drop on the continent this year.

The decreases will make the investors in the region more realistic, therefore big projects will no longer be developed as in the past, but smaller hotel projects, meeting the needs of the region, said the representatives of some of the largest hotel companies worldwide.

Not only the demand on the market leads to developing small hotel projects, but also the opportunities of raising financing.

Peter Vermeer, Development Vice-President for Benelux and Eastern Europe of Intercontinental Group, stated that things changed on the market and it is not hard to obtain financing for amounts under EUR 10 mil.

He also stated that every situation creates opportunities and that larger projects of hotels will be replaced by smaller projects. Moreover, the new hotels will be oriented towards the middle class.

Mike Collini, Development Vice-President of Hilton in Northern Europe, stated that now is the time to develop hotels for the middle class.

Only 8 out of the 40 undergoing projects for hotels in Romania to be completed within 2 years are 2 and 3 star classified.

Although market players are expecting demand recovery for tourism sector in 2010 and a recovery at the 2008 level only within 4 years from now, the specialists consider that certain types of business tourists will not come back on the market, not even when the crisis will end, as technologies such as video conferences will become largely used, stated Macy Marvel, tourism economy teacher at Ecole Hoteliere de Lausanne. 

The most exposed properties are those which were financed between 2005 and 2007, when banks were very liberal and granted loans up to 90% of a project’s value, stated Marvel.

Sursa: Daily Business [19.11.2009]