Growing interest in Eastern Europe as a tourist destination has dramatically boosted the hotel investment market in the region, according to property agent, Jones Lang LaSalle.
Last year saw €500m (£343m) transacted in hotel deals across the region, up from €285m (£195m) in 2004, in line with a surge in demand for rooms and a subsequent rise in room rates.
"With a massive influx of foreign visitors, an increase in low-cost airlines and the expansion of the EU, Eastern Europe has been placed firmly on the map for hotel investors," said head of CEE for Jones Lang LaSalle Hotels, Christopher Härle.
Moscow is the star of Eastern Europe in terms of average room rates (ARR). The city saw ARR rise by a third from 2004 to 2005, to €187.50 (£128.63) per night, not far behind its Western European counterparts. Milan tops the chart with an ARR of €294.13 (£201.79).
Other Eastern European markets seeing strong rates include Prague at €101.40 (£69.56), Warsaw at €81.27 (£55.75), and Budapest at €74.91 (£51.39).
By Matthew Batham