Record year for Romania’s tourism industry: Bucharest remains the capital of HORECA

Aurel Dragan 23/08/2018 | 14:49

The Romanian tourism industry will have the best financial results in the last decade in 2018. Boosted by holiday vouchers, the HORECA sector announced excellent results, expected to exceed RON 15 billion, according to an analysis by consultancy firm Frames.

The hotel industry in Romania has grown over the past 5 years by almost 40 percent, with a turnover of more than RON 5.5 billion in 2017, and estimates of 2018 developments show that the hotel sector could reach RON 5.8 billion.

As for restaurant business, there is a good chance that, thanks to increased consumption, it will exceed the level of RON 10 billion – more than double the result recorded five years ago, of RON 4.5 billion.

Frames statistics show that the HORECA’s industry includes over 16,000 companies, of which almost 10,000 are in the restaurant sector. Last year, companies reported over 82,000 employees in the restaurant sector and 45,000 in hotels and boarding houses.

“On the background of the significant improvement of the economic situation, as well as an increased efficiency in the HORECA business, data show a significant hike in net profit compared to 2013 – from RON 380 million to RON 1 billion in the case of hotels and from RON 190 million to RON 1.6 billion in the case of restaurants,” says Adrian Negrescu, Frames manager.

BUCHAREST, CAPITAL OF HORECA

The Romanian capital is still the place to offer the widest range of services in HORECA and which obviously also record the best financial performance.

According to the consulting company, Bucharest has over 30 percent of the hotel market (373 firms) and more than 40 percent of restaurant businesses (2,072 companies) and the opening of new businesses is expected to have a significant increase in the coming years.

The capital is followed by the counties of Constanta (1,403 companies in HORECA), Cluj (768 companies), Brasov (608 companies), and Timis (696), with weights between 4 and 12 percent.

“Tourism in Bucharest has increased significantly in recent years. The development of new accommodation units and the opening of several hundreds of bars, pubs and restaurants have fallen on population growth the city and the significant advance of the number of tourists,” says Cristi Opait, manager of The Drunken Lords bar.

“The Old Center has become, in recent years, the main attraction of the city, but we are currently witnessing a significant advance of some office areas, especially Pipera, and the promenade, such as the Cismigiu area and especially the Magheru Boulevard. With the reopening of the Lido Hotel and new restaurants such as Taupe, the brasserie we are going to inaugurate in the coming days, we estimate an increase of tourists’ interest in the main boulevard in the city,” he said.

According to the latest data released by the National Institute of Statistics, arrivals in tourist reception facilities, in the first half of the year, amounted to 3.51 million (+ 5.1 percent compared to S1 2017), most of them (76.1 percent) belonging to Romanian tourists. Also the share of foreign tourists was of 23.9 percent, close to data recorded in the first six months of the previous year.

On the segment of arrivals of foreign tourists in the tourism reception facilities, the largest share was held by those in Europe (77.7 percent of the total foreign tourists), of which 85.4 percent were from countries in the European Union.

THE EFFECT OF HOLIDAY VOUCHERS

Holiday vouchers have significantly boosted the Romanian tourism market. These days, most hotel operators are sold out, many registering reservations up to 60-80 percent even for September.

ANAT recently announced that between January and June 2018, there were approximately 14 million vouchers issued electronically and on paper, worth about EUR 148 million, an amount five times higher than in 2017.

The seaside and the Prahova Valley are at the forefront, but Bucharest and other cities or tourist areas have also seen significantly higher accommodation occupancy rates over the previous years.

According to Frames analysts, the launch of holiday vouchers has also had some unexpected effects. Beyond the influx of tourists and the increase of accommodation prices, the restaurant sector feels left out of this system, due to the fact that vouchers are exclusively dedicated to accommodation services and cannot be used independently, as is the case with meal vouchers.

“From discussions with business owners on the seaside it resulted that although the hotels are full, people tend to eat less at restaurants. There are many tourists who cover their meal and table services beverages exclusively from the hotel’s offer or they buy food from supermarkets, and as a result consumption in terraces, bars and clubs has dropped significantly,” says Negrescu.

QUALITY VS. QUANTITY 

This year has brought a significant increase in the quality of services in the HORECA industry. More 4-5 star hotels, all-inclusive offers, speciality restaurants, pubs with unique identities – from a logistical point of view, the Romanian hospitality sector is at its best since the Revolution.

But there are still many grey areas in which, according to Frames analysts, authorities need to intervene.

“In Mamaia, for example, hotels are built on green spaces of other hotels without any visual identity, the beaches are full of stalls and other temporary buildings. The kitsch on the Romanian seaside is becoming increasingly obvious, and authorities are due to intervene in this segment, to enforce compliance with urban planning rules. Without a strategy in this area, it will be quite hard to attract more foreign tourists or to convince Romanians to spend their holiday in the country and not in Greece or Turkey,” shows the Frames analysis.

The financial data used in the analysis refers to the information officially reported by companies with the following CAEN codes: 5510 Hotels and other similar accommodation facilities; 5520 Accommodation facilities for holidays and short-term periods; 5530 Parks for caravans, camps and camps; 5590 Other accommodation services; 5610 Restaurants, reported to the Ministry of Public Finance. For 2017, the data is provisional, and for 2018 the company’s estimates were used.

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