Time to check in to Bulgaria´s happening hotel sector
Despite concerns that EU member state Bulgaria is succumbing to the negative effects of the economic recession along with its other CEE neighbours, recent reports indicate an 8.4% increase in tourist revenue in 2008 (NSI Bulgaria), giving investors hope that the country´s hotel sector could be a ticket out of the downturn for 2009.
There are now over 3200 hotels, hostels and lodgings across Bulgaria, offering a total of 130,000 rooms, which is a 7.3% growth compared to 2007 figures. Over 120 new hotels opened last year, the majority of which were located in cities such as the capital, Sofia and second city, Plovdiv and along the popular Black Sea coast in towns such as Bourgas and Varna.
And it would seem that demand for accommodation, not only from foreign visitors but also Bulgarian nationals, is expected to remain stable in 2009. According to the Chairman of the Bulgarian Hotel & Restaurant Association hotels in the southern towns of Velingrad, Sandanski and Zlatograd have been full during this winter season as Bulgarians seek ski and spa breaks and hopes remain high for the impending summer season.
Nearly €4 billion is expected to be generated in Bulgaria during the 2009 tourist season according to the Head of the Bulgarian Institute for Analysis and Evaluation of Tourist Business, half from foreign visitors and the other from nationals encouraged to take domestic holidays. But the government is not leaving anything to chance with an 8 million leva (approx EUR 4 million) domestic and international advertising campaign planned by the State Tourism Agency to promote Bulgarian tourism in 2009.
Joseph Upchurch, MD of overseas property developer Aston Lloyd, comments,
"The reported increase in tourism revenue, new accommodation and plans to promote this wonderfully diverse European country is very encouraging. Bulgaria holds such a wide appeal from families seeking summer holidays on the Black Sea coast to winter sports enthusiasts taking advantage of the ski slopes in Vitosha National Park, to business tourists visiting Sofia.
"Aside from its rich culture and varied landscape, one of the key appeals of visiting Bulgaria is its affordability. According to the recent Post Office Travel Services Holiday Money Report, Bulgaria ranked the seventh cheapest place to holiday, three places ahead of perennial favourite Spain, and these real savings are becoming increasingly important to travellers and investors alike."
Notably absent from Bulgaria´s hotel scene are the large Western chains seen in most countries around the world. Love them or hate them, the type of accommodation offered by such operations remains reliable and popular, especially with the business community and now four of the world´s top hotel brands are reported to be entering the Sofia market. Despite the current financial landscape, Marriott, Hyatt, Movenpick and Intercontinental have all expressed interest in Bulgaria with the view of securing a foothold in the market now for future growth.
But it is not only these companies who have identified opportunity. Property development company Aston Lloyd & Partners International recently launched the Aston Hotel Sofia located in Kostinbrod, just 15 minutes from Sofia City. This 4 star boutique hotel complex boasts 52 beautifully designed en-suite bedrooms and six suites as well as a restaurant, stylish bars, swimming pool, fitness facilities and a 400 capacity conference centre.
Joseph Upchurch comments, "The major international hotel groups in Sofia are currently not able to meet demand. In particular, there is a real lack of conferencing and business facilities. The Aston Hotel Sofia will have 400 capacity conferencing facilities that will well and truly meet this demand…so the hotel not only offers a considerable yield for minimal risk (particularly in today’s market); it’s an affordable and simple lifetime investment.”
Aston Lloyd is welcoming investment in this project from just €10,000 for en-suite bedrooms and €14,000 for suites. The hotel initiative offers investors 28 days per year of potential room income, earning 50% of the revenue from the allocated room; Aston Lloyd is guaranteeing a 6% yield in the first year and those that are eligible for a SIPP could also get up to 40% cash back.
The project has already attracted some high-profile investors, including WBC super middle weight world champion, Carl Froch, and Ring Magazine light heavy weight champion boxer, Joe Calzaghe CBE. Both have bought into the Aston Hotel Sofia as a means of expanding their existing property portfolios and profiting from the thriving city.
For more information about Bulgarian hotel investment please call Aston Lloyd on 0845 260 0646 or visit www.astonlloyd.co.uk.