Resort Hotels Face Piecemeal Disposal
The owners of some hotels on the Bulgarian Black Sea coast are revamping them into holiday home properties as concerns mount about the outlook for domestic real estate investments.
The trend is especially evident in the coastal resort of Golden Sands, said local realtors.
Currently, there are apartment listings at the Berlin Golden Beach hotel in the resort while the former Siren hotel is replaced by an apartment complex. The Golden Anchor hotel in the same resort is about to experience a similar transformation.
There is no shortage of examples in the Sunny Beach resort either, said Dobromir Ganev, manager of the Foros real estate agency.
Market watchers said hotel properties in mountain resorts like Bansko are also facing redevelopment into holiday home complexes.
The trend is blamed on resort over-construction, intense competition in the tourism market, the longer recoupment of hotel investments and the tighter business loan market.
The residential segment seems the obvious choice for hotel owners wanting to get out of their property as the local real estate market absorbed the biggest share of foreign direct investment in 2007 with 37 per cent or 2.158 billion euro.
This trend emerges as a slowdown on the real estate market becomes an ever more distinct possibility on the back of the global credit crisis.
Analysts expect a shift away from investment in vacation and hotel properties and towards infrastructure, retail and logistics.