Hotels are eagerly awaiting for the economic recovery. 2021 should turn out to be better for the industry than the last year. In Poland, there is a very strong domestic demand, both in terms of business and tourism, which is beneficial for the hotel sector, as it is not only dependent on the arrivals of foreign tourists. Therefore, Polish hotels have a good chance to cope after the restrictions are lifted, even if the tourist traffic in the world is blocked or limited to some extent for a longer period of time. It was demonstrated by the good results recorded by the sector in tourist destinations during the last summer season.
Hoteliers, especially in the large cities, will have to be creative in order to attract Polish business guests in the upcoming months, as they will have a very wide offer to choose from. In recent years, the demand for hotel services in the largest business centers in the country was very high, and hotels did not have to actively seek guests. Now they will be forced to show great flexibility and fight for customers. Especially because there is a large number of short-term rental apartments on the market, which to a certain extent are their competition. In addition, leading hotel chains are entering and expanding their offer of short-term rental apartments and houses in large cities and holiday destinations, as customers now expect more space for leisure.
Hotels are one of the industries most affected by the pandemic. The owners of facilities who did not save for a rainy day are in the worst situation. Now they are being forced to sell hotels and pull out of the market, with slim chances of returning. At the moment, several hundred hotel facilities are already put up for sale in Poland. These are mainly small hotels and guesthouses located in provincial towns.
As a result of a significant loss of confidence in the sector by financial institutions, facilities in poor condition cannot count on loans. Unfortunately, some of the poorly located smaller hotels situated in provincial towns will go out of business. This year, we will see acquisitions in the hotel market and large-scale consolidation of the industry.
A significant number of international investors refrained from acquiring assets in the hotel segment, focusing currently mainly on the warehouse sector. Operators on lease contracts choose their offers very carefully and focus only on the largest agglomerations in the country or refrain from making decisions altogether.
Author: Katarzyna Tencza, Associate Director Investment&Hospitality at Walter Herz
