Investment Activity
CEE Hotel Investment Market demonstrates significant resilience and growth by 2024. Investment volume increased by 16% on an annual basis. The Czech Republic emerged as the market with the highest hotel investment volume, followed by Poland, Hungary and the rest of the region. The majority of transactions in this region involved single assets. Positive momentum is expected to continue through 2025 with several major transactions already completed and other in various stages of the disposition process.
PRIME YIELDS
Throughout 2024, prime yields in the CEE hotel investment market remained relatively constant, with slight compression observed for prime assets in top-tier locations. Factors such as stabilizing inflation, the easing of bank financing costs, and increased capital inflows suggest the potential for further compression of yields as we transition into 2025.
Supply & Demand
There were 12 hotels and serviced apartments with 1,381 rooms opening in the CEE-6 capitals during 2024, including branded properties such as W Evropa Hotel and Cloud One in Prague and Kimpton. There was a strong focus on the Upper Upscale and Upscale segments. Room supply increased by 1.7%, primarily driven by openings in Warsaw (+2.6%), Budapest (+2.4%), and Prague (+1.5%).
In 2025, the supply in the region’s capitals is projected to grow by 2.5%. Warsaw is expected to see the highest increase at approximately 5.8%, followed by Sofia at around 2.2%, and Bucharest at about 2.1%.
Performance
The region experienced an 8.9% increase in RevPAR compared to 2023, primarily driven by a 4.7% rise in ADR. Occupancy also improved by 2.5 pp., reaching 65.2%, though it remains 4.7 pp. below 2019 levels. The RevPAR index in all CEE capitals has surpassed 2019 levels, with Warsaw (132.6%), Sofia (123.2%) and Prague (122.5%) leading the way. Warsaw is the only city to have surpassed 2019 occupancy levels, reaching 103%. Markets such as Romania and Bulgaria are expected to grow in the coming years, primarily supported by their inclusion in the Schengen area.
