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Bucharest’s hotel market – falling Montagne russe

As it was well predicted, the prices practiced by hotels in Bucharest fell this year to half of the value of those charged in the fall of 2008, the price of a room for one night dropping below 100 euros, even in units of five stars, according to industry representatives.

“It goes very bad, much worse even than last year. Bucharest is a city where nothing happens and we do not have nothing to show to our city’s tourists. From what I remember, in these past 20 years we have never had such a worse fall or year” – this was the statement of George Turna, the First Vice-President of Romania Hotel Industry Federation (FIHR) and manager of the

Ambassador Hotel in Bucharest, cited by Mediafax. He added that two of the most important rates in tourism industry have declined this fall, the occupancy rate as well as the overnight period.

Mihael Acatrinei, general manager of the Four Star Hotel Ramada Majestic Bucharest, affirmed that the average price this fall is placed at a rate of 20-25% below the one from last autumn and 50% lower compared to September-October 2008. Also, the occupancy rate dropped to 55-60%, compared with the value of 80% registered two years ago. Serious fall down!

Let’s see what Mr. Acatrinei affirms in this matter: “The main problem is that the segment of the business tourism disappeared over night in Bucharest. The average price dropped to below 100 euros, even in the five stars hotel case, compared to 120-160 euros in 2008. Also, very important, the number of conferences has been reduced by about 30% compared with the situation registered two years ago, and please note that the number of weddings dropped to 20% less than previous years.  If in 2008 the average stay of a tourist in a hotel in the capital was 2.8 nights, now it has dropped to 1.1 – 1.2 nights”.

Hoteluri Bucuresti

The owner of Continental hotel chain, Radu Enache, said that the average price for four and five star hotels in Bucharest fell to 66 euros per night, while the occupancy rate fell by 20% over last year.

For example, in the case of Continental Hotels chain, for 2010, they registered this year an average occupancy rate of 52% and the revenues increased by only 2%, given that fact that the accommodation capacity increased by 15% through the opening of two hotel units, Grand Hotel Continental in Bucharest and Ibis Sibiu.

We can look all around in the media, and notice that each entrepreneur in tourism area claims that for the moment they cannot see a way out of the actual crisis. There is no exit plan, no predictability, no plan approved by the actual government.

The tourism market will gain only if the investments will be encouraged, and the banks will begin to drop their interest rate from 12% to 5-6%.

George Towers to Ambassador believes, instead, that the situation will not improve the hotels until the entire economy, not out of the crisis.

Well, not hard to conclude that all hoteliers have a pessimistic opinion in what concerns the actual end of this crisis. And for sure, because tourism is a result of all other economic activities it cannot be restored as long as the economy does not begin to find its proper parameters of evolution.

Let’s all hope that 2011 will be better than 2010…just because the hope is the last one to die!

EastComfort Bucharest Apartmens

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