Investors turning to Bulgaria

InterContinental Hotels Group has opened Bulgaria's first InterContinental Hotels & Resorts property in the capital city of Sofia. 
InterContinental Sofia, Bulgaria. Photo credit: IHG

AccorHotels’ move to take over Orbis has turned attention to Eastern Europe, as the French company looks to build on its dominance on the continent. 

The takeover offer was made as Orbis announced it was bringing the luxury boutique segment to Bulgaria under an AccorHotels brand, as interest in the country continued to build. 

Orbis is to open its first hotel in Plovdiv under the MGallery by Sofitel flag, with the property due to open next year, and will introduce a new hotel segment in Bulgaria—"the luxury/boutique offer," according to the company. 

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Frank Reul, head of development, Orbis and AccorHotels in Eastern Europe, said, ”Bulgaria, the same as the Southeastern Europe region, is a promising market for hoteliers as it offers totally new destinations to both business and leisure travelers. We're proud to have been chosen by the local investor who has a brave ambition to introduce the MGallery to Plovdiv. We're totally supporting this project because this destination, this city simply deserves the finest hotel brand.” 

Plovdiv is expected to see a boost to visitor numbers next year, when it will be the “European Capital of Culture,” the first Bulgarian city to have been given the title. The designation is made by the European Union for one year. 

AccorHotels is not the only investor looking to the country. Domestic group Holding Varna added 4.6 percent to its majority interest in resort hotel group SS Konstantin i Elena Holding for 1.5 million levs ($889,000/€784,000), taking its stake to 52 percent [as of September]. SS Konstantin i Elena Holding owns and operates seven hotels in the country. 

Bulgaria’s coastal resort business has been building in recent years and the end of November saw Germany’s Maritim Hotels announce further expansion of its Bulgarian portfolio with a new hotel on the Black Sea coast. 

The Paradise Blue Hotel & Spa in Albena, Bulgaria, will open as a Maritim Hotel in April next year, under a franchise agreement. “We are delighted to add this high-quality hotel to Maritim’s international portfolio and are certain that it will offer our Maritim guests a highly attractive destination,” said Peter Wennel, CEO, HMS Hotel Management Services International, a part of Maritim. 

The country’s government has been looking to tourism to help drive the economy, which the tourism ministry said accounted for 12 percent of GDP and 11 percent of jobs. In the first 10 months of 2018, more than 8.4 million tourists visited Bulgaria, an increase of 5 percent on the year, while revenue from foreign tourists was up 7 percent to €3.2 billion. 

Tourism minister Nikolina Angelkova has been working with schools and universities to try and attract more people to work in the sector and improve the quality of services in the industry, in addition to alleviating the staffing shortage that the hospitality industry is suffering. 

Last month, the country’s Ministry of Tourism and the Ministry of Labor and Social Policy announced an agreement to re-train both unemployed and employed Bulgarians for the tourism industry. “Through the qualification and re-training agreement in tourism, we will ensure sustainability in the sector,” said Angelkova. 

Investors want to fill the country with hotels. Now the tourism ministry must find the staff to run them.  

Katherine Doggrell is an editor at Hotel Analyst, the U.K.-based news analysis service for hotel investors.