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Cash is King as Bulgaria Hotels Seek to Change Hands
Mirela.bg, 04.09.2010
As sellers of property, hotels included, are going through hard times in Bulgaria, most deals are a result of cash payments, experts say and forecast that cash will remain king. “Due to the restricted financing, deals can be concluded only by investors with money at hand. The forecasts for 2010 can best be described as “cash is the king,” Anna Rizova-Clegg, Country Managing Partner in the Sofia office of DLA Piper, the international legal practice, said in an interview for Novinite.com.
A survey of the hotel and hospitality industry by DLA Piper found that 22% of all respondents – executive directors of 417 European hotels – pick Eastern Europe, including Bulgaria, as the most prospective region for investments in the next three years. Eastern Europe is preceded by Great Britain (40 %), China (28%), Russia (27%), India and Latin America (24 %). The Middle East and the other countries in Western Europe lag behind in the ranking.
“Investors are turning their attention to hotels from the so-called economy segment and this may be the key to the quicker rebound of Bulgaria’s hotel sector,” says Anna Rizova-Clegg. According to her the two main obstacles that foreign investors in the hotel sector face here are the poor infrastructure across the country and the visa regime with Russia, which hampers the flow of tourists from a traditional for Bulgaria market with huge potential. “The people from the hotel sector are putting their faith in the tourists from Western and Central Europe due to the first signs of recovery in these countries,” she said.
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