At the end of last year, Dragos Raducan, general secretary of the Federation of Romanian Tourism Business Owners (FPTR), told BUSINESS Magazin that the pressure on the prices charged by hotel operators would be heavier this year, so that unless they froze rates at at least 2008’s level, they would lose money. Reactions on the market at the time did not seem to back Raducan’s opinion, but January results made hotel operators change their minds.

Take-up started to go down by 10-15% in the second half of last year and 2009 estimates point to a constant decline, as a result of a shrinking demand for accommodation and the rising number of hotels. Considering the projects already announced, but regarded with scepticism (because development of many of them has been halted), 12 to 15 hotels will open this year, most of which outside Bucharest. Competition and slow market have upset last year’s trend when the most expensive hotels on the market fared best. Now, hotel owners have started to fight a battle of special offers and lower prices, though lowered by quite small percentages.

The 10-20% cuts started from the small hotels unaffiliated to international chains, which are the most exposed when it comes to the decline in business travel, because they are not part of international booking chains (the number of rooms affiliated to international chains is quite low, about 3% in Romania, anyway). ”They risk not being able to cover the expenses and then starting to make people redundant. There are big hotels in Prahova Valley that fired 30% of their employees,” Dragos Raducan says. On the other hand, contracts were signed at the same rates in RON last year for the seaside, and in mountain and spa areas rates in RON were kept or raised by 5-8% on average (in some rare occurrences, they were either kept unchanged or rose by 12%).