Many Hotels In Romania Could Be Closed In 2011; Owners Unable To Sustain Loss-Making Businesses

Sebesanu said affiliated hotels, with a large number of rooms, are faced with operational break-even (revenues equal costs, or are a bit higher), but the situation of small, non-affiliated hotels is even more dramatic. He stressed many hotel owners want to trade properties, but there are no buyers whatsoever, adding there has been no significant transaction on the Romanian hotel market this year.

Sebesanu underscored that blocking the financing process is a big problem for new hotel projects in Romania, adding banks are no longer willing to finance hotel businesses and include them in the real estate segment. According to Sebesanu, hotels, however, do better in times of economic crisis, because, unlike other real estate segments, they can still generate cashflow, despite a low occupancy level.

Trend Hospitality is a major Romanian consulting and asset management firm in the hospitality industry, and acts as the strategic developer for Wyndham Hotel Group (Howard Johnson, Ramada, Days Inn, Super 8 Motels) in Romania, Bulgaria and Moldova.