Hotel investment across Southeast Europe continues to attract interest, but rising development costs, changing guest expectations and the importance of year-round demand are reshaping investment strategies. At Zagreb Property Forum 2026, hospitality executives discussed the growing role of mixed-use developments and branded residences, the opportunities emerging across the region and the need for realistic financial planning to ensure long-term profitability.
Dilek Sezer, Senior Development Director - South Eastern Europe at Accor, highlighted Croatia, Romania, Bulgaria and Serbia as markets offering significant growth opportunities, particularly in destinations where tourism demand is increasing but branded hotel supply remains limited. While standalone hotels can still be viable investments, location, connectivity, demand and financial returns must support the development. Mixed-use projects, extended-stay concepts and branded residences are increasingly attractive because they allow investors to diversify risk and generate additional revenue. However, Sezer warned against assuming that combining different uses automatically makes a project successful. Developers must first establish a viable destination and prepare conservative financial projections. Branded residences can command substantial premiums, but their success depends on identifying the right buyers and locations. She also stressed that hotels must increasingly appeal to local communities through restaurants, wellness facilities and other services rather than relying exclusively on overnight guests.
Josipa Jutt Ferlan, Cluster General Manager / CEO at Hilton Hotels in Zagreb, argued that Croatia has reached a level of maturity where the next phase of hospitality development should focus on upgrading the existing offer and attracting more internationally branded, upscale properties. Mixed-use concepts will be an important part of this transition, particularly in coastal destinations with strong international demand. However, she cautioned that new hotel capacity must be supported by corresponding growth in visitor numbers. Zagreb, for example, remains an attractive capital city market, but additional supply needs to be accompanied by stronger demand. On the Adriatic coast, improved international air connections are creating opportunities, although developers must distinguish between destinations capable of supporting year-round operations and those that will remain seasonal. Jutt Ferlan also sees growing potential for branded residences in Croatia as the market and regulatory environment mature, provided developers avoid oversupply and carefully select locations.
Martin Hristov, Manager, Feasibility & Development Finance at Hyatt, pointed to strong development momentum across Southeast Europe, with the branded hotel pipeline representing a substantial increase in existing supply. Croatia and Montenegro remain established tourism destinations, supported by international demand and strong pricing, while Albania is emerging as another promising market, provided infrastructure development keeps pace with visitor growth. Regional capitals offer different opportunities through their more balanced mix of corporate, leisure, government and conference demand. Hristov noted that the development pipeline remains concentrated in the upscale and upper-upscale segments, although opportunities vary significantly according to market maturity. He also emphasised that branded residences should strengthen an already viable hospitality concept rather than compensate for a weak hotel business. Where residential units participate in a hotel rental programme, the capacity of the hotel's facilities and services must be carefully matched to the additional demand.
Roman Tkaczenko, Development Director at H World International, sees significant opportunities for international hotel brands to expand across Croatia and the wider Adriatic region. The company's established customer base in German-speaking markets, combined with its international distribution network and access to Asian travellers, could help destinations attract visitors beyond the traditional summer season. However, Tkaczenko warned that some mixed-use developments are driven primarily by residential sales rather than a convincing hospitality strategy. While selling residences can improve initial project financing, it cannot compensate for an unsuitable location or an unviable hotel concept. He argued that successful developments must create genuine destinations and ecosystems, with realistic assumptions about long-term operating performance. Standalone hotels can still work, particularly when developers, investors, operators and brands align their interests and adopt flexible commercial structures. The objective should be to create a sustainable hospitality business rather than simply maximise short-term real estate returns.
Nikola Vukosavljević, Real Estate Sales Manager at Petram Resort & Residences, highlighted the growing importance of mixed-use resort concepts along the Adriatic coast. While standalone business hotels may remain attractive in urban locations, coastal developments increasingly benefit from combining accommodation with residential units, leisure facilities and services. Buyers are looking for properties that offer a convenient, low-maintenance ownership experience, supported by amenities such as swimming pools, fitness and wellness facilities. At Petram Resort & Residences, the wider strategy also includes developing activities that can attract visitors outside the peak summer months, including golf-related tourism. However, Vukosavljević warned that increasingly demanding guests and property buyers create substantial operating challenges. High-quality landscaping, housekeeping, front-office services and other amenities require significant expenditure, while staff turnover and difficulties recruiting skilled employees can make consistent service delivery challenging.
The discussion, chaired by George Bobvos, Development Consultant for Southeast Europe at Wyndham Hotels & Resorts, highlighted the need for a more selective approach to hotel investment across the region. International brands continue to see opportunities in established destinations and emerging markets, but successful projects will increasingly depend on their ability to generate demand throughout the year, combine complementary uses and deliver experiences that justify their pricing. With guests becoming more digitally connected, experience-driven and demanding, the panel agreed that long-term success requires more than an attractive building. Developers must create destinations with sustainable economics, appropriate infrastructure and a clear understanding of their target customers.
