Bucharest Apartments, Bucharest short term rental

25mil euro lower revenues in 2009 for five major Bucharest hotel owners

Five of the largest hotel owners in Romania, George Copos, Mohammad Murad, Josef Goschy, Ionut Negoita and Octavian Lazar, holding together more than 8,000 rooms in Romanian hotels, that is around 2.5% of Romania’s accommodation capacity, last year registered 25m-euro lower revenues in the hospitality industry than in 2008.

In 2008, the five entrepreneurs’ hotel business reached 90m euros, and in the same year Romania could provide accommodation to 294,000 tourists, according to National Statistics Institute data.

Though they operated at even 50% lower occupancy rates and cut tariffs by as much as 40%, the five owners maintain they ended the year in the black, but not all of them specified the value of profits.

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Tinu Sebesanu, Trend Hospitality: “The ones that continue to have no profit should sum up the loss and run for it!”

  Tinu Sebesanu, the CEO from Trend Hospitality, says that obtaining profit is no longer the main objective in the hotelier industry, the most important aspect in the new economical context is maintaining the business above the float line.

“The first signs of the international situations were beginning to show, in Romania, in May 2008. Then we started seeing the decay in the number of people that spent a night at a hotel, especially in Bucharest, where if somebody sleeps at a hotel, it is usually a businessperson. As the number of the businesses decreased, the smaller the number of people sleeping in a hotel became. However, many saw that they still had a profit and they did not look ahead. Everybody was making a comparison with 2007, the best year that the hospitality business had ever had, a year that will not come again ten years from now.”

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Irina Vrabie, PR Manager RomVision; “The short term accommodation system in Bucharest: A chaotic market with sand services”

All Apartments: What should the short term accommodation system really mean, taking into consideration the fact that the regulations in the field are, generally, broken?

Irina Vrabie: It should mean an alternative to the classical accommodations means. Still, there is some confusion between renting apartments and the short term accommodation system. We don’t just rent apartments, this is the segment that belongs to the real estate agencies.

We, and I mean few companies that took this business seriously, offer much more than the simple delivery of the keys to an apartment: we provide the comfort similar to the one of your own dwelling, with everything it implies – TV cable, wireless internet, phone, but also cleaning services, assistance for any unforeseen situation, counseling.

Unfortunately, there are many so called short term accommodation companies that resume to delivering the keys of the apartment and cashing the money, and nothing more.

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Tourism Managers: In just six months, some chains of hotels will go bankrupt

“ At least 5 chains of hotels will go bankrupt in the next six months “

say almost 40% from the managers of the tourism firms, according to a global study effectuated by the law firm, DLA Piper, cited by Newsin.

“80% from the questioned foresee at least one bankruptcy in the time that we are speaking.“

According to the DLA Piper study, “2009 Europe Hospitality Outlook Report”, the directors from the European hotelier market are not as optimistic as their American colleagues.

Only 39 % from the European executives are expecting the rehabilitation of the industry sector in 2010, compared to 59% in the United States. The majority of the European executives foresee the beginning of the rehabilitation to be in 2011.

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Radu Enache from the Continental – about the hotelier market and crisis rates

  The businessman Radu Enache who controls the hotelier chain Continental, with almost 2000 rooms and businesses of about 27 millions euro only last year, says that he has made a super crisis scenario that involves the immediate closure of a hotel once it becomes unprofitable.

“Four and five stars hotels from Bucharest became three stars hotels, according to the rates they practice. Marriott competes now with my hotel, the three star hotel Ibis Parliament. We lowered the rates at the beginning of the year, but we can’t go lower than our costs”

Said Enache, that charges at a three star hotel with an average of 60 Euros per room, discounts included.

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