Crisis in the Bulgarian Hotel Business: Shrinking Margins and Pessimistic Forecasts for 2026

The Bulgarian hotel sector is entering the second half of 2026 under the pressure of unfavorable economic factors. According to the results of the latest national survey organized by the Hotel Forum (HTIF) and the Bulgarian Association of Hotel Management Professionals (BAHE), the business climate is deteriorating significantly compared to the same period last year.

Decline in Occupancy and Price Ceilings

One of the most alarming indicators is the occupancy rate of accommodation facilities. Nearly two-thirds of the surveyed managers report an average occupancy below 50%, with a quarter of them observing a decline of over 20% compared to the previous year. Despite rising costs, hoteliers are facing a "price ceiling" – most do not plan to increase overnight rates, as the market can no longer absorb additional pressure.

Profitability Under Double Pressure

Businesses are squeezed between two fronts: weakening demand and a sharp spike in operating costs. While the main factor last time was wage growth, in 2026, the leading driver of costs is inflation, especially in food and services. As a result, half of the hotels in the country are already reporting a deterioration in their profitability.

Challenges: Inflation Displaces the Staffing Crisis

An interesting turn in the survey is that inflation and high prices are now being identified as a greater challenge than staff shortages. Although the labor shortage is still relevant, one-third of hotels state they do not have serious problems filling their positions. Solutions to staffing issues include importing labor, engaging students, and increasing competitive wages.

Markets and Investments

Romania remains the main source of tourists, generating three times more visitors than the next most significant markets such as the UK, Poland, and Turkey. Despite the difficult economic climate, the sector shows resilience regarding investments – about 21% of hoteliers plan new investments in facilities, and 40% foresee capital renovations.

The survey covers approximately 8% of the hotel base in Bulgaria, including city, seaside, mountain, and spa hotels.