An executive perspective on market dynamics, investment strategies, and future growth opportunities in Eastern Europe’s evolving hospitality sector
The hospitality sector in Central and Eastern Europe is experiencing a transformative period marked by post-pandemic recovery, shifting operational models, and new investment patterns. To understand the strategic implications for industry leaders, we spoke with Sevda Cadîr, Head of Feasibility and Valuation at Win Advisors, who offers data-driven insights on market performance, investment trends, and future growth opportunities in Romania’s hotel industry.
Market Performance: The Numbers Behind the Recovery
The post-pandemic recovery trajectory for Eastern European hospitality reveals an instructive pattern for market analysts. Despite occupancy rates in the region remaining below pre-pandemic benchmarks—affected by geopolitical tensions, diminished Asian market demand, and MICE segment sluggishness—the average daily rate (ADR) has increased by 28% in January-November 2024 compared to the same period in 2019, driving a 19% growth in Revenue Per Available Room (RevPAR).
“Romania’s hotel market demonstrates remarkable resilience,” notes Cadîr. “While average occupancy for January-November 2024 remained 9% below 2019 levels, the 19% ADR growth has propelled RevPAR 8% above pre-pandemic figures.”
Bucharest’s performance metrics tell an even more compelling story: occupancy rates just 6% below 2019 but 5% above 2023, with ADR growth of 19% since 2019 and 7% year-over-year. This has resulted in RevPAR figures exceeding pre-pandemic levels by 13%.
This performance dichotomy—lagging occupancy versus strengthening rates—represents a structural shift rather than a temporary anomaly. The data suggests that while volume recovery continues, value recovery has already surpassed pre-crisis levels, creating new strategic imperatives for operators.
Investment Dynamics: Capital Flows and Market Constraints
Despite strong operational performance indicators, hotel investment transactions in Romania totaled approximately €20 million in 2024—a figure that belies the actual interest level. Two key constraints have moderated transaction volume: limited property availability and elevated financing costs.
“What we’re witnessing is not lack of investor appetite but rather a temporary market inefficiency,” explains Cadîr. “The hotel market’s demonstrated resilience through economic volatility has actually heightened investor interest in portfolio diversification through hospitality assets.”
This phenomenon creates an interesting dynamic for 2025-2026: as interest rates moderate and more properties become available, we anticipate a potential acceleration in transaction activity. The critical variable will be alignment between seller and buyer valuation expectations, particularly as operating metrics continue to evolve.
Strategic Pivot: From Management to Franchise Models
Perhaps the most significant strategic shift occurring in the market involves the evolution of operator-owner relationships. Hotel brands increasingly favor franchise models over traditional management contracts, giving rise to what industry insiders term the “sandwich model.”
In this arrangement, property owners enter management or lease agreements with specialized white-label operators like Win Advisors, who subsequently establish franchise relationships with hotel brands. “This triangular structure optimizes outcomes for all parties involved,” Cadîr observes. “Owners gain both brand visibility and local operational expertise, typically at improved economics.”
This model reflects a broader unbundling trend in the industry, separating brand, operations, and real estate into distinct value components. The rise of the hybrid “manchise” approach—blending management and franchise elements—further demonstrates the market’s movement toward flexible operational structures that better align incentives and expertise.
Market Gaps and Strategic Opportunities
Market analysis reveals several strategic gaps in Romania’s hospitality landscape that represent potentially high-ROI investment opportunities:
- Demographic-driven concepts: The growing millennial and Gen Z traveler segments seek authentic experiences and social interactions, yet remain underserved by current offerings.
- Affordable lifestyle hotels: This high-growth segment delivers experience-focused environments at moderate price points—a combination with significant potential in Bucharest and secondary cities.
- Luxury residential components: The branded residence model, which pairs luxury hotel operations with residential sales, remains underdeveloped despite proving financially compelling in comparable markets.
- Bleisure infrastructure: Properties designed to accommodate the blending of business and leisure travel represent another underexploited opportunity, particularly in Bucharest.
- Regional resort development: Romania’s natural assets provide a foundation for experiential luxury resorts aligned with wellness and nature tourism trends.
“What’s particularly interesting about these opportunities is that they represent structural market gaps rather than cyclical ones,” notes Cadîr. “They reflect fundamental shifts in traveler preferences and consumption patterns rather than temporary imbalances.”
Operational Challenges and Mitigation Strategies
For executives navigating this evolving landscape, several operational challenges require strategic attention:
Regulatory complexity: Urban zoning plans continue to create friction in development timelines and economics, particularly in primary markets. Forward-thinking developers are mitigating this through earlier engagement with regulatory stakeholders.
Sustainability imperatives: New EU regulations mandate more comprehensive sustainability implementation and reporting. Leading operators are transforming this compliance requirement into a value-creation opportunity through both operational savings and price premium potential.
Talent acquisition and retention: Human capital remains a critical constraint. Innovative operators are developing talent pipelines through educational partnerships and implementing retention strategies beyond traditional compensation models.
Asset conversion expertise: The growing practice of converting office properties to hospitality use requires specialized knowledge. Successful projects involve early-stage collaboration between office developers and hospitality specialists to optimize building systems and spatial configurations.
Forward Outlook: Strategic Imperatives for Market Leaders
Looking ahead, several strategic imperatives emerge for hospitality executives operating in or considering the Romanian market:
- Geographical diversification: Beyond Bucharest, regions such as Moldova (particularly Bacău and Iași) and the southern coastline present compelling development opportunities, with wine tourism representing an additional growth vertical.
- Operational model optimization: The shift toward franchise and hybrid operational models requires reassessment of existing arrangements to ensure alignment with current market conditions.
- Product-market fit refinement: The evolution of traveler demographics and preferences necessitates regular reassessment of concept positioning and service delivery models.
- Sustainability integration: Forward-thinking operators are moving beyond compliance to integrate sustainability as a core value proposition and competitive differentiator.
“The Romanian hospitality market is at an inflection point,” concludes Cadîr. “The combination of strong post-pandemic recovery, evolving operational models, and emerging consumer preferences creates a particularly favorable environment for strategic investors and operators who can execute with precision.”
Sevda Cadîr is Head of Feasibility and Valuation at Win Advisors, a hospitality consultancy and management company focused on Central and Eastern Europe. After a decade of international experience, she returned to Romania to lead the company’s analytical services division, specializing in feasibility studies, investment analyses, and market research.