Europe -  Sofia

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Sofia has been named one of the top 10 best places in the world for start-up companies, especially in the information technology sector. The city is home to the National Opera and Ballet of Bulgaria, the National Palace of Culture, the Vasil Levski National Stadium, the Ivan Vazov National Theatre, the National Archaeological Museum and the Serdica Amphitheatre, all of which have cultural importance in southeast Europe. The Globalization and World Cities Research Network has Sofia ranked as a Beta global city; it is also ranked 62nd in the world's financial centres. Sofia is Bulgaria's economic centre and is home to the Bulgarian National Bank and the Bulgarian Stock Exchange, as well as most of the country's major Bulgarian and foreign companies. Sofia Airport is Bulgaria's only international airport, and in 2019 it exceeded 7 million passengers for the first time, which increased at a CAGR of 9.0% over the last decade. BH Air, Bulgaria Air and Bulgarian Air Charter have their home bases at the airport, as well as Ryanair and Wizz Air. Sofia is also home to a diverse range of cultural enterprises as well as a thriving film-related service market. Over the last 18 years The Sofia Film Festival has grown to become the largest and most important film festival in the Balkans. The National Film Archive, which focuses on Bulgaria's film history, is also located in the capital.

Hotel RevPAR in Sofia increased at a CAGR of approximately 7.5% from 2014 to 2019, thanks to both volume and average rate uptrends. Marketwide occupancy increased from the mid-50s mark in 2014 to the low 60s in 2019. Average rate rallied at a 5.0% CAGR over the same period. The Sofia market has not been susceptible to fluctuations in local currency, as seen in other markets such as Istanbul, as the Bulgarian lev has been pegged to the euro (at a rate of BGN/EUR 0.511) since 1999. On the back of the pandemic, RevPAR in Sofia collapsed by over 67.0% in 2020, which was followed by a recovery of around 35%, in 2021, still well below the historical levels.

The hotel market in Sofia is composed of 129 properties, or around 8,000 rooms. Seven developments exist in the five-year pipeline with the majority of them falling into midscale and upscale category, and these proposed 1,100 rooms equate to around 13.0% of the existing supply. The most relevant new supply includes the 99-room Hampton by Hilton Sofia City Centre (March 2023), the 232-room Marriott Sofia (June 2023) and the 281-room Novotel Sofia, which is in the planning stage and is expected to enter the market in late September 2023. Other brands due to enter the market include Holiday Inn Express, ibis and ibis Styles.

After a couple of years with no transactions to report in the hotel space, 2020 saw the 130-room Holiday Inn Sofia and the 185-room Sofia Hotel Balkan purchased by Videolux Holding and Potamiro Limited, respectively. The transaction prices were undisclosed. We are not aware of any hotel transactions in 2021.

As indicated in our Hotel Valuation Index 2022, the hotel values rose by around 2.5% in both euro and local currency. Going forward, Sofia’s recovery prospects lie with its domestic market, which generally accounts for roughly 60.0% of annual arrivals, of which around 35.0% is business-related.

Change In Value For Market: (€Euro)

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: More than -10%

For more information, please contact:

Sophie Perret, MRICS, MBA
Senior Director
[email protected]
  • +44 20 7878 7722 (w)
  • +44 0 7725781037 (m)