An Examination of Central and Eastern Europe’s Hotel Sector in 2021
By Korosh Farazad, Founder & Chairman of Farazad Group of Companies and Member of Board for Trinity Hospitality Group
Even though European hospitality sector has been hit hard by COVID-19 in 2020, there is a lot of positivity and movement in regard to new hotel openings in the region. According to research from TOPHOTELPROJECTS, it is expected that 277 hotels with 63,680 rooms are planned to open this year across Central and Eastern Europe. Thus, it seems that 2021 will be a busy period for new openings of hotels in the region and with even more to come in the market for the subsequent years. This indicates that investors and developers are optimistic about the rebound of hotels in the next few years.
Central and Eastern Europe's top urban growth centres include Budapest, which will see 14 new hotels opening in the following years to welcome tourists and business travellers alike. Moscow is another city on this list. The Russian capital will get 11 additional hotels, while nine new properties are coming to Prague.
Studies conducted by Savills and Fitch Ratings claim that investors should expect hotels to reach pre-pandemic levels in 2023 because of the impressive performance that the European hospitality sector experienced in 2019, with hotel values in Central Europe raised to 3% across the board on a year-to-year basis. As an example, the city that leads the openings of hotels in 2021 in the region, Budapest has had an impressive CAGR in the past decade of 6.1%. Therefore, it is not surprising why the market believes that there is more growth to come after boarders and restrictions are lifted.
It is worth exploring specific projects that will come to the market in the next few years to understand better their quality and what new aspects they have to offer in the industry. One & Only Portonovi will open their first hotel in Montenegro in March 2020. It will be the brand's first property in Europe. When open, the hotel will offer 140 rooms and villas, private residences, and a marina. It will combine effortless elegance with want-for-nothing service and world-class wellness facilities.
Another impressive hotel that will come to the market in 2022 is the Bvlgari Hotel Moscow. It will be world's seventh Bvlgari Hotel, and it will preside over one of the city's most prestigious areas, just 300 metres from the Kremlin and Red Square in Moscow's affluent historic district.
The hotel will have 65 keys, and it will be infused with modern Italian style throughout its private and public spaces, including the 300-square-metre Bvlgari Suite, lavish restaurant, bar with spacious roof terrace, and state-of-the-art Spa. The hotel is expected to bring an unprecedented standard of luxury to one of the world's great cities.
Lastly, another exceptional hotel that will come to the market in 2023 is the 5-star Hard Rock Hotel Letna Prague. Hard Rock International continues its growth and portfolio of hotels in Europe with one of Prague's newest additions. The hotel will open in 2023, and it will have 523 rooms and suites. It will boast magnificent views overlooking Letna Park and the spectacular Prague Castle from the hotel's sophisticated rooftop Sky Bar. There are also substantial convention facilities including a 20,000 sq. ft. multi-purpose ballroom and - on the top floor, a full-service spa with pool and gym.
In brief, another notable project that will come to the Central and Eastern European region in the following years is the 120-room Ritz-Carlton, Montenegro which will be the first property for Marriott International's iconic luxury brand in the country. Also, in Budapest Anantara New York Palace Budapest Hotel is expected to open its doors in 2021. The hotel is expected to have 185 guest rooms and suites. Accommodation is centred around the cavernous atrium, while the ground-floor New York Café is the heart of the social scene. Named 'The Most Beautiful Café in the World', with gilded stucco and plush velvet, the venue has played host to Hungary's artists and poets for over a century.
In conclusion, it seems that the next few years will be busy and with many exciting hotel openings in Europe. The scale of the mentioned projects proves the hospitality sector's resilience and the positivity among the market players and investors who have committed large amounts of capital and expect to see positive returns in the next decade. It is also evident that the region will continue being one of the top international tourist destinations. In that region, the hotel sector predicts that business travelling will continue soon since they have made large investments in impressive boardrooms and event spaces.
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