Hotel Investment Scene in CEE – Overcoming the Pandemic & Bridging the Financial Gap

Welcome to our third edition of the joint Cushman & Wakefield–CMS report on the Hotel Investment scene in CEE: Overcoming the Pandemic and Bridging the Financial Gap. 

In 2020, as with the rest of the hospitality market globally, hotels in the CEE-6* were hit hard by the COVID-19 pandemic, which unsurprisingly led to a sharp fall in hotel investment activity. Many deals were put on hold or withdrawn, which resulted in a 74.2% fall in transaction volume to EUR 370m, compared to 2019’s record-breaking EUR 1.4bn. 

With ongoing vaccination rollouts and signs of optimism for the remainder of 2021, investor interest has been picking up and the gap between buyer-seller expectations has been gradually narrowing, reinvigorating investor activity in the region. This is underpinned by the long-term fundamentals of the hotel sector, which remain positive. This is especially evident for the CEE-6 hotel markets, which have seen transaction volumes more than triple over the last two decades, and still boast significant room for growth. 

While hotel bookings and investor appetite are improving, the crisis might not be over for some owners, who may still be facing or will face financial challenges, especially as government subsidies taper off and their loans come to term, while cash flows have not fully recovered. In this year’s report, we share our insights into the various options that hotel owners may consider to resolve these challenges and bridge the financial gaps. To delve deeper into this topic, we are delighted to share insights from our CEE hotel survey, which assessed owners’ financial positions and considerations. We are also pleased to bring you insider perspectives from interviews with a select group of lenders, hotel owners and investors active in the CEE-6.

We do hope you will find the report interesting; please do not hesitate to contact us to discuss any of these topics further.