Hotel investments blocked by economic crisis

Hotel investments blocked by economic crisis

“The market is currently blocked. There are hotels for sale, but investors are fearful. Given the problems on the international market, I do not estimate a revival before two or three years,” said Mircea Draghici, Project Manager of Fivestar Hospitality hotel consulting company.

The only segment on the hotel market on which investments can focus is greenfield. Analysts say the main areas for new projects are northern, southern and central Bucharest, and the cities of Craiova, Iasi, Timisoara and Cluj-Napoca.

According to a study by Continental Hotels, some 2,000 new hotel rooms are to become available in the coming two years. Investments are set to amount to €350-400 million in 2008-2010, according to Fivestar Hospitality.

Some 73 percent of the total hotel accommodation capacity in Bucharest is made up by four and five-star hotels, with a total 7,396 rooms. Three-star hotels alone make up 21.7 percent of the market.