CEE Hospitality MarketBeat Reports

CEE-6 HOSPITALITY MARKETBEAT H2 2024

• The CEE hotel investment market showcased strong resilience and expansion in 2024, recording a 16% year-on-year increase in investment volumes. This growth was fueled by increased activity in the Czech Republic, which led the region in hotel investment volumes, followed by Poland and Hungary. Notable transactions include the acquisition of Wellness Hotel Step in Prague by Czech Inn Hotels, Sofitel Grand in Sopot by Sinfam Investments, Barcelo Palace in Brno by Czech Inn Hotels and Mornington Capital, Circular Hotel in Budapest by Market Asset Management, and Cloud One in Gdańsk by Invesco.
  
  
• Throughout 2024, prime yields in the CEE hotel investment market held steady, with a slight tightening observed for top-tier assets in key locations. Stabilizing inflation, lower bank financing costs, and growing capital inflows indicate the possibility of further yield compression moving into 2025
  
  
• There is growing interest from local investors in the CEE hospitality market. The region saw a notable 8.9% increase in RevPAR in 2024, largely driven by a 4.7% rise in ADR. Meanwhile, Occupancy saw a 2.5 pp. improvement from 2023, reaching 65.2% in 2024 (4.7 pp. behind 2019 levels). The RevPAR index for all CEE capitals has exceeded 2019 levels, with Warsaw (132.6%), Sofia (123.2%), and Prague (122.5%) at the forefront. Warsaw stands out as the only city to have exceeded its 2019 occupancy, achieving 103%.
  
  
• Markets such as Romania and Bulgaria are expected to grow in the coming years, primarily supported by their inclusion in the Schengen area. Furthermore, the combination of limited investment opportunities in the CEE region and strong demand is putting pressure on pricing. However, investors still incorporate a degree of uncertainty in their expectations due to the geopolitical situation and macroeconomic outlook.