For a comprehensive review of the Europe market, click below:
HVS In-Depth Europe Hotel Valuation Index:
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Sofia is the capital and largest city of Bulgaria, located in the western part of the country and having a population of 1.3 million as of 2024, making it the most populous city in Bulgaria. 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 ranked Sofia as a Beta global city in 2022; it is also ranked 98th in the world's financial centres in 2023. 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, experiencing a compound annual growth rate (CAGR) of 9.0% over the preceding decade. Following the impact of the pandemic, in 2022 Sofia Airport served 6 million passengers, and in 2023 passenger numbers increased to 7 million, a return to 2019 volume. BH Air, Bulgaria Air and Bulgarian Air Charter have their home bases at the airport, and Ryanair and Wizz Air both use it as a regional base. Sofia is also home to a diverse range of cultural enterprises as well as a thriving film-related service market. Over the last 28 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 7.5% from 2014 to 2019, thanks to upward trends for both occupancy and average rate. Marketwide occupancy increased from the mid-50s in 2014 to the low 60s in 2019. Average rate achieved 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 BGN1:€0.511) since 1999. The country is expected to move to using euro from 1 January 2025.
RevPAR in Sofia collapsed by around two thirds in 2020, followed by a recovery of around 35% in 2021. Whilst the market continued to recover in 2022, thanks to its strong domestic corporate base, demand volumes were still around 80% of pre-pandemic levels, and modest rate growth meant that RevPAR remained below that of 2019, even in nominal terms. In 2023, the occupancy for Sofia remained relatively flat, though coupled with around 15% growth in average rate, which resulted in a RevPAR in line with 2019 levels in nominal terms, but still around 15% behind in real terms. Around 35% of annual arrivals in Sofia are business-related.
The hotel market in Sofia is composed of 130 properties, or around 8,000 rooms. With a pipeline of five new developments that may impact occupancy in the short term, the Sofia market will see 716 rooms come to market over the next two years, which equates to around 9% of the existing supply. Most of these proposed hotels fall into the midscale and upscale categories. Most of the new supply will be branded, and some of these projects are the 152-room Holiday Inn Express Sofia Airport (expected to open in October 2024), the 99-room Hampton by Hilton Sofia City Centre (February 2025), the 232-room Marriott Sofia (June 2025) and the 117-room Mövenpick Sofia, which is in the planning stages and is expected to enter the market in late June 2025.
After a few 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, for undisclosed prices. There were no transactions within the market in 2021, and trade volume remained low in 2022, with only the 122-room Suite Hotel transacting in February for €10 million. In 2023, no transactions were reported for the hotel market in Sofia.
As indicated in our 2024 European Hotel Valuation Index, Sofia hotel values rose by around 2% in both euro and lev, but are still around 16% below 2019 levels.
The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide.
Consequently, the latest HVI analysis may no longer reflect the most current measure of lodging industry strength or the
hospitality investment market.
In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely
insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related
restrictions will be in place, we are updating our analyses on a weekly basis using the most current data.
Additionally, examination of value trends in prior cycles can provide useful information. Historical patterns, together with
an understanding of the market’s current expectations for the eventual recovery of the industry and its performance, can provide
insights on the likely trajectory of decline and recovery for hotel values.
For the Latest Information and Analysis on the Impact of COVID-19Click Here
If you’d like to speak to someone personally to review details of our most current analysis, please don’t hesitate to contact
us directly.
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