Introducing The New Sofia Tourism and Air Transport Market Report 2018

Two years ago, when Sofia Investment Agency started work, we identified 9 priority sectors for the city. Tourism was naturally one of them.

Our team is glad to present the new Sofia Tourism and Air Transport Report 2018 we’ve been working on for the past two months. In short, for another year in a row, we are in the midst of an unprecedented tourism boom that shows no signs of slowing down. It is visible on the streets and in coffee shops and it did not finish with summer’s end.

The new report has 50 pages and covers a wide range of topics such as the number of tourists by country of origin and reason for visit, the accommodation capacity, traffic at Sofia Airport, opportunities for development of Congress and MICE tourism in the city and trends in the industry.

Here are some of the key points from the report:

• In the last several years Sofia became a much more popular and preferred tourist destination. The city has been experiencing a stable increase in tourism – approximately 13% growth in the number of tourists and 15% in the number of nights spent both in 2016 and 2017.
• 65% of all Sofia visitors came from abroad, and the top source countries were Italy, Great Britain, Germany, and Greece.
• The increase in number of foreign tourists in Sofia in 2017 alone was 18%.
• The highest increase of visitors in 2017 was recorded among the tourists from the Netherlands (+57%), Spain (+51%), Ireland (+ 51%), China (+48%), and Belgium (+40%).
• Sofia Airport launched 42 new routes between 2015-2018, including new direct flights to such destinations as Baku, Nice, Malaga, etc.
• The number of passengers at the airport increased by the record 30.3% in 2017 to a total of 6 490 096. Over 58% of the passengers serviced at the Airport in 2017 flew a low-cost airline.
• As of the spring of 2018, there were around 4 611 four- and five-star hotel rooms and more than 10 five-star hotels in Sofia, some of which belong to the biggest hotel brands worldwide. The number of 4- and 5-star hotel rooms in the city is expected to double by 2021 due to several big international hotel chains entering the market.
• Bulgaria’s Presidency of the Council of the EU was the largest congress event in the history of Sofia and a great opportunity for the city to gain more exposure as a business destination. More than 40 000 delegates and journalists from all around the world took part in 284 events, 12 informal councils and 5 high-level parliamentary dimension meetings held in Sofia.

What to expect in the future:

• The trend for an increased number of tourists in Sofia will likely continue in the coming years, though at a lower rate. 2018-2019 can be even better after the EU presidency that both created increasing demands for the hospitality industry in Sofia and helped the city to develop its international image and gain popularity as a destination for leisure and business tourism.
• The growing number of tourists in Sofia is expected to have a strong positive effect on the further growth of the sector, including the modernization and development of the offered services and the elimination of the currently existing gaps in the overall tourist product in the city.
• The hotel market in Sofia has been demonstrating a stable growth in the number of arrivals, the number of nights spent and the revenues from nights spent since 2009. The trend was particularly notable in 2016-2017 and is expected to continue in 2018-2020.
• The Congress and MICE tourism are expected to play an increasingly important role in the coming years. The establishment of the Bulgarian Convention Bureau, the renovation of the National Palace of Culture, the biggest congress centre in Sofia, and the expected entry of big hotel brands to Sofia’s tourism market are among the factors facilitating the development of the Congress and MICE tourism in the city and the attraction of events with global reach in the future.
• The popularity of shared economy platforms like Airbnb will likely continue to grow.
• Improvements in the tourist infrastructure, the continuing urban rejuvenation projects and the construction of the Metro Line 3 connecting Sofia Airport’s Terminal 1 to the city will make Sofia a more attractive and easily accessible tourist destination.
• In 2017 there was a staggering growth of 48% in the number of Chinese tourists visiting Sofia. The attraction of more Chinese tourists can play an important role for Sofia’s tourism. However, Sofia is yet to be popularised as a business and leisure destination and gain recognition among Chinese tourists. The launching of a direct Sofia-Beijing route (expected in 2019) is likely to further facilitate the development of tourism between Bulgaria and China.

What challenges lie ahead:

• The current boom is to a large degree driven by the increase of the numbers on low-cost flights to Sofia Airport. In 2017 the biggest number of passengers at Sofia Airport flew with the Hungarian-based low-cost carrier Wizz Air. According to experts, Sofia Airport is reaching its capacity and an expansion of Sofia Airport in the coming years is of crucial importance.
• Sofia is yet to fill-in some gaps that still exist in tourist industry offerings and needs to add more experiences and activities.
• Sofia’s hotel market remains relatively immature compared to other major European cities. The supply of brand name hotel rooms in Sofia is still limited and the presence of international hotels is among the lowest in Europe. The share of branded rooms, however, is expected to increase by 2021.
• Sofia’s SPA and mountain tourism are still underdeveloped. In the long run, the city could benefit from its over 30 thermal springs and rich mountain resources by expanding the currently existing infrastructure by offering new types of tourism products and experiences.
• A lot has been achieved with the improvement of the urban environment but there is still a lot more to be done.
• An increasing competition in the traditional tourism and hospitality industry comes from the shared services sites and platforms. The local stakeholders and the Municipality will have to collaborate in order to adopt new business models and to come up with new ways of regulating these platforms.

Detailed data, infographics and charts, analyses and trends are available for download here.

The Sofia Tourism and Air Transport Market Report 2018 is prepared by the Investment & Business Development Department at the Agency. The report contains data, analysis and conclusions on the tourism sector in the capital as of September 2018.

Our team would like to thank Mr. Ivo Marinov and Sofia Tourism Administration, the Ministry of Tourism of the Republic of Bulgaria, Sofia Airport, Mr. Emil Shukadarov from the Bulgarian Convention Bureau – BGCB, Mr. Boris Pavlov from the property management firm Flat Manager, Mr. Rosen Grigorov from the full-service real estate company MBL, and Mr. Kaloyan Vangelov from the business development consulting company Synovent for their help and valuable insights.

If you have further questions regarding the report or other data on the investment climate in Sofia, do not hesitate to contact our team at contact@investsofia.com.