Hoteliers in Bulgaria and Romania hope more tourists are drawn to visit the two southeast European countries now that it's a bit easier to travel to them.
On Jan. 1, both countries became members of the European Union’s Schengen area, a zone of free travel that includes most of the 27 EU-member countries and several countries in Europe that are not part of the EU. Both Romania and Bulgaria joined the European Union in 2007 and as of March 2024 had open air and sea travel, with land border access now officially open.
The accession of Bulgaria and Romania to the Schengen area should benefit the hospitality industry of these two countries, but some hoteliers have doubts as to whether this development will make much of a difference.
Romania and Bulgaria’s road to become full members of the Schengen area started in 2011, when the European Commission — the EU's executive body — declared both countries fit and ready to join.
The Schengen accession for Romania and Bulgaria has begun to enhance connectivity and stimulate economic and tourism growth, said Alina Cazachevici, head of hospitality operations at business advisory Cushman & Wakefield.
“Full integration, including land borders, is expected to strengthen this effect significantly, especially for regional and cross-border tourism, which is dominated by land travel,” she said.
Streamlined travel provisions for European tourists will also likely boost visits to Romania, considering the sizeable pool of 1.25 billion travelers within the Schengen area, she added.
Overall, it's a turning point for Romania's tourism industry, said Simona Constantinescu, CEO of Ana Hotels and president of the country’s hotel industry federation, the Federația Industriei Hoteliere din România.
“The eased travel regulations are poised to boost tourism flows to and from Romania, which was already noticed during the partial accession of the past months, potentially yielding further growth and contributing significantly to gross domestic product,” she said.
According to the Romanian government’s National Strategy for Tourism Development, the number of foreign visitors is predicted to grow from 843,000 in 2021 to 2.8 million in 2025 and 3.6 million in 2030.
Hoteliers said those visitor projections might need to be revised upward, as the program was devised when prospects of a Schengen accession were vague.
For the past few years, the hospitality industry in both Romania and Bulgaria has been sluggish. According to Cushman & Wakefield, overall hotel occupancy in both countries is still below pre-pandemic levels, though the number of overnight stays has been increasing year over year since 2022.
Average hotel occupancy in Romania stood at 63.2% during the first 10 months of 2024, just a bit higher than the 63.1% achieved in the previous year but far below the 68.4% registered in 2019, according to hospitality data from CoStar. The picture is similar in Bulgaria, where hotel occupancy climbed from 46.3% in 2023 to 50.4% during the first 10 months of 2024 but notably below the 60.4% seen in 2019.
Average daily rate in both countries, however, experienced impressive growth, fueled mainly by inflation, Cazachevici said.
In Romania, ADR jumped to €89.39 ($91.31) in the first 10 months of 2024, up from €84.06 in full-year 2023 and up from €74.50 in 2019, according to CoStar data. In Bulgaria, ADR climbed from €79.80 in 2019 to €95.30 in 2023 and to €100.12 across the first 10 months of 2024.
Hotel revenue per available room also showed a slight uptick in both countries over the same period. In Romania, RevPAR reached €56.53 across the first 10 months of 2024, up from €53.05 for full-year 2023 and up from €50.98 for full-year 2019. In Bulgaria, RevPAR increased to €50.51 during the first 10 months of 2024, higher than the €48.08 of 2023 and €48.18 of full-year 2019.
Will open borders make a difference?
Not everyone is anticipating that Schengen accession will become a game-changer for the region’s hospitality industry.
“We have been hit by the perception that we are close to the Ukrainian war,” said Vesselin Danev, president of the Bulgarian Hotel Association and former executive director at Libena Hotels. Libena is a Cypriot hotel firm with a portfolio of four Meliá International-branded hotels on Bulgaria’s Black Sea coast.
This perception has played a key role in preventing Bulgarian hotels from reaching pre-pandemic performance levels, he said. Potential guests from some countries have shown reluctance to come to Bulgaria, citing security concerns. Germany, for instance, was formerly a top tourist feeder market for Bulgaria and now accounts for far fewer arrivals.
However, there are some positives that improved connectivity with the rest of Europe and will draw more visitors to Bulgaria and Romania over time. During the fall season, there was a higher number of British and Romanian visitors that took trips to Bulgaria, seemingly unconcerned about the conflict across the border, Danev said.
But Danev said he does not expect Bulgaria being a part of the Schengen area to have a noticeable impact on the number of foreign visitors to the country. Plus, there are enough other obstacles to doing business in both Bulgaria and Romania as a result of Russia's war in Ukraine.
The main challenge for hoteliers is rising costs, Danev said. In addition to general inflation and soaring labor costs, Bulgarian hotels also need to pay high energy bills.
“Energy prices are much higher in southeastern Europe because of the connection to the Ukrainian power grid,” he said.
Virtually all electricity used in Ukraine to plug the gap between supply and demand comes from Bulgaria and Romania. When compared to other EU countries, energy prices in Bulgaria and Romania are much higher as a result of their proximity to a war that has spanned nearly three years.
Danev said Bulgarian hoteliers remain only cautiously optimistic about the industry’s short-term future.
Geopolitical stability is key to sustain growth, Cazachevici said.
“In Bulgaria, prolonged political instability marked by multiple elections and governance challenges have all delayed key reforms and discouraged some investors,” she said. “Similarly in Romania, controversies surrounding the results of the 2024 presidential and parliamentary elections could impact investor confidence.”
Despite these challenges, most analysts do expect Schengen accession to help the hotel industry in both countries attract new investment.
Bucharest, Romania, and Sofia, Bulgaria — as capital cities with the largest and busiest international airports — have already seen increased international arrivals due to better air connectivity stemming from Schengen integration, Cazachevici said.
Secondary cities such as Cluj-Napoca, Iași and Timișoara in Romania and Varna and Burgas in Bulgaria are also benefiting from improved accessibility.
These regions will unlock untapped potential and attract more leisure and business travelers once land border controls are lifted.
“Romania’s maturing market and growing focus on business and meetings, incentives, conventions and expositions tourism make it a stronger candidate for sustained growth,” Cazachevici said. “Bulgaria, with its focus on leisure tourism — especially along the Black Sea coast — also holds significant potential, though its success depends on stable governance and improved infrastructure.”