Europe -  Sofia, Bulgaria

Sofia is the capital and largest city in Bulgaria, home to the headquarters of most Bulgarian and international companies operating in the country and Eastern Europe. The city is also the country’s financial hub: it is the home of the Bulgarian National Bank, the Bulgarian Stock Exchange and some of the country’s largest commercial banks. Sofia has also come to the attention of Western European and American multinational companies such as, IBM, Hewlett-Packard and Siemens, as a location in which to outsource operations. In 2015, Forbes listed Sofia as one of the top 10 places in the world to launch a start-up business because of the low corporate tax (10%), the extremely fast Internet connection speed available and the presence of several investment funds, including Eleven Startup Accelerator, LAUNCHub and Neveq.

Sofia is predominantly a business destination and is still emerging as a leisure destination. The city is benefitting from the misfortunes of Western Europe like many other Eastern European cities. Russian visitation to Sofia has increased significantly following several fall-outs between Turkey and Russia. The fact that prices in the city are still generally low is a substantial demand driver.

The hotel market in Sofia is still recovering from the setback experienced during the global financial crisis in 2008. Sofia’s hotel RevPAR dropped by over 30% in 2008 due to very significant decreases in both occupancy and average rates. It was not until 2014 that the city’s RevPAR started to recover, and it has done so at an average of 11% per annum since. Even so, RevPAR levels by the end of 2017 were still some 30% below those achieved in 2007, in nominal terms.

The positive market trend experienced over the past few years, combined with the improved reputation and level of visitation to the country, has renewed interest in the city from hotel investors. Thus, there is quite a prominent level of new supply entering the market, with the room stock expected to grow by 6% by 2019. Going forward, the market is likely to see a boost due to the EU presidency that will be held in Bulgaria in the first half of 2018. However, the number of hotel transactions in the city has remained relatively low, with no hotel transactions occurring in 2017.

Change In Value For Market: (€Euro)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Sofia RevPAR Change (€Euro)

Sofia RevPAR (€Euro)

For more information, please contact:

Sophie Perret, MRICS, MBA
sperret@hvs.com
  • +44 20 7878 7722 (w)
Simon Hulten
shulten@hvs.com
  • +44 020 7878-7775 (w)