7 things to know about Poland's hotel market

(Radisson Blu Wroclaw)

A new report from Christie & Co. found that Poland’s hotel market has seen continuous growth over the last several years. Here are some useful takeaways from the report:

  1. Last year saw an increase of 79 percent in hotel supply compared to 2006, for a total 2,316 hotels. 
  2. In spite of the financial crisis, demand for hotels in Poland recovered quickly and arrivals as well as overnight stays exceeded pre-crisis levels in 2010. From 2006 to 2015, the number of hotel night stays increased by 86 percent. 
  3. Performance data by STR found that RevPAR in Poland increased between 2011 and 2015, generating a compound annual growth rate of 2.2 percent, despite a decline in ADR, which recorded a compound annual growth rate of -1.9 percent. The report suggested that this can be credited to the fact that RevPAR in Poland is “highly occupancy-driven.” 
  4. Occupancy levels grew over the last five years and YTD March figures show a significant increase compared to the same period last year. Monthly year-on-year RevPAR changes showed a very positive development, with 2015 data setting a new high.
  5. Key international source markets include Germany, Great Britain, Ukraine and the U.S.. A full 20 percent of the country’s hotel guests come from international visitors.    
  6. Notable transactions closing in recent years include the Holiday Inn Warsaw – City Centre, which is still under development and expected to open in 2018; the Radisson Blu in Wrocław; and the Sheraton Hotel Warsaw.
  7. The most competitive hotel markets are Warsaw; Cracow; the Tri-City area around Gdańsk, Gdynia and Sopot; and Wrocław, all by number of hotel keys and RevPAR. 

“Poland’s hotel investment market may still be in its infancy, but there are many reasons why investors are convinced of the country’s potential,” said Adam Konieczny, country head for Poland at Christie & Co. “Investment opportunities arise from both the positive development of tourism in Poland’s key cities, the improvement of transport infrastructure as well as the country’s increased significance as a MICE and business location.

“While the upper midscale segments continue to grow, there is still a lack of budget hotels in Poland, which creates opportunities for visionary investors and operators. Investors are ever more keen on acquiring hotel properties in Poland, with strong interest coming particularly from German, French, British and US buyers. They are mainly looking for branded, well-established business hotels, with chain-affiliated city-centre hotels proving to be particularly successful.

“In general, all kinds of hotels in Poland–from budget to luxury–are in demand. For those looking to allocate capital in an emerging market, where they do not face the level of yield compression they do in Western European key cities, Poland’s hotel market provides an excellent opportunity.”