Europe -  Sofia

Sofia is the capital of 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 ten places in the world to launch a start-up business because of the low corporate tax (10%), the extremely fast Internet connection speeds 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. Airport statistics reveal an average annual growth in passengers of around 15% from 2013 to 2018. Domestic arrivals to the capital have been on the rise, with an incredible growth of 70% in 2017, albeit from a somewhat low base, whilst in the same year international arrivals have grown by almost 30% following the positive trend that began in 2014. The fact that prices in the city are still generally low is a substantial demand driver.

As per the latest available data from 2017, there are 88 hotels in Sofia or 6,306 rooms (67% of total rooms of all accommodation types in the city). More than 1.3 million visitors stayed overnight in 2017, of which 880,000 were foreigners.

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 more than 30% in 2009 owing to very significant decreases in both occupancy and average rates. It was not until 2014 that the city’s RevPAR started to recover significantly, and it has done so at an average growth of around 10% per annum until 2017, while 2018 has been somewhat more modest. Sofia’s hotels currently operate at an annual occupancy in the mid-60s. Overall, hotel values in Sofia recorded a 5.9% increase in euro terms in 2018, as reflected in our 2019 Hotel Valuation Index.

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. There are currently two hotels in the pipeline: the Hyatt Regency Sofia with 190 rooms is to open by the end of 2019 and the Swissôtel Sofia with 281 rooms is to open after the summer of 2019. There are no records of any hotel transactions over the last two years for this market.

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
[email protected]
  • +44 20 7878 7722 (w)
Magali Castells
[email protected]
  • +44 20 7878-7710 (w)
  • +44 7 850205149 (m)