Two-star hotels more profitable than luxury ones

Radu Enache, owner of Continental hotel chain that operates 14 hotels with 21m-euro turnover, maintains that amid the current economic conditions two-star hotels are more profitable than five-star ones. “(…) Five-star hotels are facing deep trouble during this period. We’re trying to stay afloat on a market that is completely upturned because of the falling accommodation tariffs,” stated Radu Enache. Two-star hotels’ employees have lower wages than five-star ones, as incomes on the entire hotel market are among the lowest anyway, less than 800 RON per moth (190 euros). The shrinking profitability per employee in five-star hotels is accounted for by the falling demand for luxury rooms on the Romanian market amid the narrowing budgets of corporate clients. Whereas in the first five months of the year almost three quarters of Hello two-star hotel were filled, in the case of Grand Hotel Continental five-star hotel, not even half of rooms were occupied, with prices per accommodation night in the five-star hotel being four times higher than the ones of two-star hotels.