Hotel Market in Poland in 2017

Krakow Skyline in Fall
Panorama of Cracow, Poland, with Wawel castle, Vistula river and twoi bridges in autumn. Aerial view from the balloon at sunset.

According to Walter Herz report on the hotel market, over 8 thousand hotel rooms will be commissioned in Poland this year

With the increasing number of people visiting our country, the demand for hotel services is growing in Poland. In 2017, Polish airports provided services for 17 per cent more passengers than a year earlier. Statistics Poland (GUS) figures also indicate an increasing demand for accommodation. They show that since 2012, the number of hotel rooms rented in facilities in our country is systematically growing by several percent each year.

The increase in hotel operating ratios encourages investors to increase their activity. Thus, the domestic hotel facilities, which are still underdeveloped in comparison with Western European countries, are constantly gaining new attractive facilities.

This year, the hotel sector is to grow by 6 per cent

According to Walter Herz specialists,  hotel base in Poland currently has over 2700 facilities of various standards, with over 135 thousand available rooms. Analysts calculate that in 2018, over 8 thousand rooms will become available in the investments which are to be commissioned in the country.

The experts estimate that this year the industry will see an increase in supply by 6 per cent. They stress, however, that although the market is consistently increasing its resources, Poland is still lacking hotels. It is visible, above all, in the main business centers in the country.

Warsaw market has the biggest potential for growth. Business guests generate  more demand for accommodation in the capital than in any other Polish city. In addition, after UEFA EURO 2012, Warsaw is becoming more popular among the tourists.

A record level of new supply in Warsaw

According to the latest Walter Herz report, the Warsaw market currently has 90 hotels that are offering 13.5 thousand rooms. The report shows that the new supply in Warsaw is to reach a record level this year. In the facilities to be completed in 2018, around 2 thousand hotel rooms will be delivered. Walter Herz analysts predict that in 2019, the Warsaw market will increase its offer by a similar number of hotel rooms as in the current year.

The opening of several significant hotel facilities is planned in the capital this year, including Four Points by Sheraton hotel with 192 rooms, two Ibis Styles hotels that will offer a total of 400 rooms, Krakowska Residence hotel with over 350 rooms, Vienna House hotel with 164 rooms, Renaissance hotel with 225 rooms, as well as Raffles Europejski hotel with 106 rooms.

Among the recently recorded hotel transactions concluded in Warsaw, the specialists mention five-star hotels Westin and Radisson Blu and four-star Holiday Inn Warsaw City Center.

Cracow with four times smaller new supply than Warsaw

There is plenty of space to locate new hotel projects, not only in Warsaw, but also in Cracow, Wrocław, Tri-City and Poznań – the locations that global investors are interested in the most.

The second largest hotel market in the country – Cracow, currently has 150 hotels, where there are over 10 thousand available rooms. The demand for accommodation in Cracow is increasing, because the capital of Małopolska region is visited by more tourists each year. In 2017, almost 13 million people came to Cracow, that is 6 per cent more than a year earlier.

According to the calculations by Walter Herz specialists, approximately 500 new hotel rooms will become available in the facilities to be delivered in the agglomeration this year. Such places as, B&B hotel with 130 rooms and  Puro hotel with 228 rooms located in Kazimierz district will welcome their first guests.

Tri-City is the fastest growing regional market

Stable operating results of Cracow hotels make the agglomeration attractive for international investors. The recent transactions in this segment of the Cracow real estate market concerned five-star Sheraton Hotel and three-star Vienna House Easy hotel.

In Tri-City, two times more hotel rooms than in Cracow will be commissioned this year. In 2018, the Tri-City market will get another thousand rooms. The most interesting projects to be completed include Deo hotel with 354 rooms, Hampton by Hilton with 154 rooms, IBB with 90 rooms and Focus Premium in Sopot, which will provide 70 rooms.

Tri-City, where foreign guests, mainly from Scandinavia and Germany, are responsible for 44 per cent of  hotel stays, currently offers 80 hotels with 6 thousand available rooms.

Award-Winning Wrocław

Today, Wrocław has 60 hotels offering  5.1 thousand rooms. Walter Herz specialists calculate that this year, the resources of the Wrocław hotel market will increase by another 250 rooms.

The Wrocław market is characterized by relatively low, average prices compared to other major agglomerations in Poland. According to the specialists, forecasts for the development of the industry in the capital of Lower Silesia are positive, mainly due to the strong demand for accommodation from tourists and the growing BPO sector. The popularity of the location is also enhanced by the title of the European Capital of Culture awarded to the city in 2016 and the recognition of Wrocław as the best European destination in 2018 in the European Best Destination competition.

Poznań is chasing the remaining main markets

Development of the Poznań market, which currently has 61 hotels, providing 3.7 thousand  rooms, is promising. Walter Herz report shows that this year Poznań will gain about 400 hotel rooms. The agglomeration is to get, among others, Hampton by Hilton hotel with 117 rooms, Altus hotel with 109 rooms and Focus hotel with 94 rooms.

The demand for accommodation is generated in Poznań mainly by business guests and MICE, mainly due to the popular international trade fair located in the city. However, the significance of Poznań International Fair is getting weaker, as is the recognition of the location among the foreign tourists.

Author: Walter Herz