Investment Activity
The CEE hotel investment market demonstrated significant resilience and growth in 2024, with investment volumes increasing by 16% year-on-year. This growth was primarily driven by increased activity in the Czech Republic, which emerged as the leading market in terms of hotel investment volumes, followed by Poland and Hungary. Most transactions in the region were single-asset deals. The positive momentum is expected to continue into 2025, with several major deals already completed and others in various stages of 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.
