High-end hotels in CEE 'continue to offer opportunities'

The boutique hotel sector in Central and Eastern Europe (CEE) is proving immune to the worst effects of the current credit crisis, according to James Doran, director of sales and marketing at MaMaison Hotels and Apartments, a brand of Orco Property Group. 'I'm not saying we’re recession-proof, but especially on the boutique hotel side we're less vulnerable. There are two reasons for this, Doran claims: 'We're talking about smaller properties, and from a price perspective, this part of Europe is still relatively attractive for the tourist market, including from the US.'

Having recently opened the MaMaison Pokrovka Suite Hotel in central Moscow, Doran says the region continues to draw tourists and business travellers. 'Business travellers will still have to go to Moscow. Business travellers may go a little less to Prague, but they'll still go. The markets we’re going after are less susceptible to recession.' Market growth will not be uniform across the region. Jones Lang LaSalle's Hotel Investment Outlook 2008 cites a strong supply increase in cities like Prague and Budapest combined with decreasing visitor numbers as 'putting pressure on yields in certain categories'.

This trend will lead to new development in regional cities as well as newer markets further east. With regional hotels in the Czech city of Ostrava as well as the southern Polish city of Bielsko-Biala, Doran cited interest in additional future projects in Poland, Romania and Russia, where Moscow continues to be undersupplied. A number of international hotel operators such as Rezidor and Intercontinental have announced plans on the Ukrainian market while the EU's newest members have potential both in their capital cities and for resort hotels on their coasts.