Budapest performs best in CEE in hotel performance

Hotels

European hotel investments reached €3.74 bln in the first quarter of 2015, more than double the Q1 2014 volumes of €1.73 bln, data published today by commercial property advisor CBRE reveal.

European hotel investments have seen a year-on-year growth of 116% reflecting the strength in hotels as a growing commercial property asset class, and led by a number of factors including high investor appetite for consumer driven real estate asset classes in a time of low inflation and rising consumer spending, CBRE said in a press release.

"The hotel market performed outstandingly in Budapest last year," analyst Gábor Borbély, Head of Research and Consulting at CBRE in Hungary said. "The average hotel occupancy rate in the capital rose to 75%, and the average room price was 7% higher than in the previous period. The improvement in hotel profitability indicators was even more striking, for example the gross operating profit per room increased by 20%, which was the best performance in Europe," he added.

Most guests in the capital’s hotels came from abroad, but the benefits of the domestic tourist boom could also be felt in the countryʼs other tourist destinations. For the first time since 2009, the turnover of hotels in the countryside rose faster than those of the capital; the increase in the number of visitors was particularly strong in the Mátra-Bükk tourist region. At a national level, it is surprising that more and more visitors arrive from Asia (South Korea and China) and the Visegrád countries, but the number of tourists from such countries as Germany and Austria did not decrease either.

"The hotel as an investment opportunity is attracting more and more capital; soon it will become as mature a market as those of office and logistic real estate," Borbély said. "The domestic investment market can also benefit from this trend," he said. As with the offices and logistics category, the investment logic in hotel investments is also based on user market stability, which is why the stellar performance of the domestic hotels by European standards is so remarkable, Borbély added.

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