Interest in Romania as a tourist destination has been growing in recent years, entailing an increase in investments in the hotel industry. This trend, where tourists’ growing interest in a destination is supported by an increase in investments, has also been reported for other Central and Eastern European countries. In 2016, the overall volume of hospitality investments in Central and Eastern Europe accounted for roughly 1.2 billion Euros, a significant increase as compared to 2015, when investments stood at 700 million euros. Also on a growing trend is the hotel occupancy rate, which is another reason to invest in the hotel industry. Calin Ile is the president of the Federation of the Romanian Hospitality Industry. He explains why the investors’ interest in this sector has been on a growing trend:
Calin Ile: ”On one hand, the favorable regional backdrop is an element of stability and safety which has propagated in recent years, and that is why investors find markets in Eastern Europe interesting, mainly because tourists themselves have found those markets interesting. And tourists are increasingly attracted to Eastern European markets because the region is safe, stable, with no alarming inflow of immigrants and the ensuing risks that have affected Western Europe. On the other hand, this also occurred thanks to a change in the youth behavior patterns. Youngsters no longer see that many barriers everywhere and seek new experiences, so they travel to Eastern Europe more often.“
The growing interest of tourists in this part of Europe has also triggered an increase in hotel fares, and, implicitly, an increase in profit. The steepest tariff increases in 2016 compared to 2015 were reported for Bratislava, 9.5%, Budapest, 6.1%, Bucharest and Sofia, 5.8 % and Prague, where accommodation prices rose by 3.4%. As regards Romania, investors’ interest appears to focus on specific areas, according to the head of the Romanian Hospitality Industry Federation:
Calin Ile: “I should say tourists focus on three key areas in Romania. On the one hand, we have Transylvania, and particularly the cities in Transylvania, a region which has a better and better image and it is the driving force in terms of image. Then Bucharest fares quite well too, also due to a very good economic growth rate in recent years. Then there’s the leisure segment, where the Black Sea coast region has seen a lot of investment lately. This includes the Danube Delta, a unique element in Europe, and the Black Sea coast resorts, where the industry focuses on entertainment, and we have very good results during the summer months.”
The northern part of the Romanian Black seacoast, Mamaia resort in particular, makes for a favourite summer destination not just for Romanians, but also for foreign tourists. Bucharest has become a city-break destination, with some 20% of the 1.1 million foreign tourists reported in 2016 having bought city-break packages, while another 60% of the tourists who visited Bucharest were here to attend various conferences and events.
According to statistics, apart from Bucharest and Constanta, the most visited counties of Romania were Timis in the west, and Sibiu and Brasov in central Romania. Unlike Timis County and the city of Timisoara, which lie on Romania’s western border, Sibiu and Brasov counties are not so easily accessible, yet their popularity is growing. Brasov has its own tourist objectives, but is also a good starting point for sightseeing tours in an area rich in tourist sites. Suffice it to mention the Rasnov medieval citadel, the Prejmer fortified Saxon church, and, last but not least, the Poiana Brasov mountain resort with its large array of hotels and restaurants, also offering the best winter sports infrastructure in Romania. A city with airport access itself, Sibiu has a privileged position, as it was designated European Capital of Culture in 2007.
Romania also has a great potential in the spa sector, despite investor interest for this sector staying at low levels. Calin Ile, the head of the Federation of the Romanian Hospitality Industry is back at the microphone with more details:
Calin Ile: “Spa tourism remains our best hope, although hope is literally all we’ve been doing for the past several years now. On the one hand, spa tourism needs significantly more investment than other areas, because both the treatment facilities as such and the infrastructure require large investments, which is something investors are unwilling to do. But we do have great potential in terms of spa tourism. Provided some areas are better promoted on international markets, I think we will manage to attract investors too”.
Low-cost airlines operating flights in Romania have contributed to increasing the number of foreign tourists to Romania, especially those visiting Bucharest, which remains a low-cost destination, at least for the time being. According to some estimates, a young tourist can visit Bucharest with only €40, a price covering one night’s accommodation, the meals and transport around the city. Investors sensed the Romanian hospitality industry is good business, which is why in the last 15 years the number of accommodation facilities in Bucharest has tripled, reaching 20,000 units. Most hotels in Bucharest are rated as 3 or 4 star units.
(translated by: Eugen Nasta, Vlad Palcu)