Young foreign tourists bring over 60% occupancy rates to Bucharest hostels

Bucharest hostels, which provide cheap, youth-oriented accommodation, operate with profit margins of 25% even in times of crisis, with hotel demand falling dramatically against last year, and revenues of hotel operators down by over 30% in the first half of the year.
A hostel tends to charge half as much as a two-star Bucharest hotel, with the occupancy degree exceeding 60% in the first six months of the year, and 90% of clients being foreigners.
"We have invested 100,000 euros of our own money in boosting the accommodation capacity of the hostel. It was closed for five months, but this summer we started to receive tourists again. We had only 60% occupancy rate during the summer months, probably because of the lack of promotion during the time when works were under way," said Ovidiu Pungan, owner of the Alex Villa hostel in Bucharest.
The hostel owner says the lower demand for accommodation on Bucharest's hospitality market has prompted some of the two-star hotels located on the outskirts of Bucharest to cut fees to match those charged by hostels, but that this does not affect hostels' activity much, since they are mainly sought after by young people.
Almost 80% of tourists lodged at Alex Villa were foreigners, French tourists mainly, who spent one to five nights there.
Last year the operator collected almost 16,000 euros from the hostel business, of which 4,900 euros in accounted for by the gross profit, according to data from the Ministry of Finance.
Veronica Dragoiu, owner of Friends Hostel Bucharest, which has room for 22, says that while the hostel did not accommodate a very large number of tourists between September last year and February this year, the hostel "returned to normal" in March.
"Things have not changed very much from last year in terms of the tourists we attract - 90% of our clients are young foreign tourists, and the costs per person range between 10 and 14 euros per night," Dragoiu said.