How much it costs to open a 3-star hotel in Romania: from €50-60,000/room

Business Forum
After more than 15 years of experience in top corporations, Alina Vladulescu, former General Manager of Ibis Styles Bucharest City Center and Mercure Bucharest City Center, and Catalina Toma (Rosu), former Director of Development for Accor in Romania, Bulgaria, and Moldova, are partnering and launching WIN Advisors, a regional hub for hotel consulting and management. WIN Advisors will operate in the markets of Romania, Bulgaria, and the Republic of Moldova.

Among the trends noted by the entrepreneurs in the hotel market in 2024 are the integration of hotel systems and platforms to optimize results and resources, increased attention to sustainability, and the optimization of guest experiences through design details and professional services.

WIN Advisors stands out for its rich and diversified experience in hotel development and operation, as well as its unique approach that prioritizes the client and offers personalized solutions. According to the two entrepreneurs, innovation is essential for WIN Advisors, both in hotel development and operation.

"Innovation is the key to success and one of our fundamental values. We come with new, creative, innovative ideas, with that extra touch compared to what exists in the market, so that we create opportunities and solutions for both our clients and the industry in general. We will work on joint venture partnerships, where we will unite operators with investment funds, creating various investment mechanisms, or we will be trailblazers for new market entries. Our entire business strategy is based on innovation," says Catalina Toma (Rosu), co-founder of WIN Advisor.

The WIN Advisors project, launched by the two entrepreneurs this spring, aims for partnerships with investors in the hotel industry, with services covering the entire range of needs in this segment. Therefore, WIN Advisors functions as a regional hub specialized in services for the hotel segment, with partnerships with experienced professionals across all verticals. Therefore, services such as brand strategy or marketing, hotel design, hotel consulting and management, and many others are aligned and integrated into WIN Advisors projects.

Trends in the hotel market

According to the two entrepreneurs, for a 3-star hotel, the investment goes up to €50-60,000/key, for 4 stars it rises to €70-80,000/key, and for 5 stars and higher. Factors influencing the investment include the condition of the building, whether it is a new construction, a conversion, or a modernization, the cost of the land, and the financing structure.

"Often we reach locations that are open, and investors do not know how to optimize their revenues and implicitly their profits. When we show them and start building a recovery strategy for their business, they embrace our vision and 'fight' alongside us to change the internal perception of the hotel, as well as in the market. You can innovate in any segment if you have the desire, vision, and the investor's trust," adds Alina Vladulescu, co-founder of WIN Advisors.

WIN Advisors operates as a specialized hub, with collaborators specialized in various segments of expertise necessary for optimizing hotel operations: from concept and brand strategy and go-to-market, to design and interior architecture, financial consulting, or hotel management.

For this year, WIN Advisors aims to provide consulting for 30 hotel projects in various stages.

"We want to help as many owners and investors as possible to have a successful business. Starting in 2025, we will focus our attention on the operational direction: either just operational support or full management for both independent and branded hotels," says Catalina Toma (Rosu).

Challenges and opportunities in the tourism industry

Financing difficulties, lack of a coherent tourism development strategy, outdated standards, alongside cumbersome bureaucracy, legislative instability, and geopolitical influence are, according to the two entrepreneurs, among the main challenges facing the local tourism industry.

On the opposite end, the increasing desire of investors to seek specialized help for hotel businesses, the emergence of new hotel units that significantly raise the market, and the interest of both domestic and international tourists, as well as the interest of certain investors looking for projects in Eastern Europe, represent significant opportunities for the growth and development of the hotel industry in Romania.

"In Romania, compared to Poland, for example, the absorption rate of international hotel groups is quite low, we're talking about a level of almost 13%, compared to over 40% in Poland. There are certainly many opportunities for international chains, but at the same time, we see a lot of space in the market for independent hotels or local chains to enter destinations that were active 30 years ago, such as spa resorts, coastal resorts, underexplored mountain destinations, or wine regions with a rich history. What is important is that the investment or operation is done at a high level of professionalism, so that we can put the destinations not only on the national map but also to arouse the interest of the international market," says Catalina Toma (Rosu).

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Business Forum  |  10 October, 2024 at 4:27 PM