According to Walter Herz data, there were 2,635 hotels in the country in July 2019. Three-star facilities constituted almost half of the establishments, while Poland had 418 four-star hotels in the middle of last year. This category has seen the largest growth in recent years and their number has almost doubled in Poland since 2012. On the other hand, Poland only has as many as 76 facilities of the highest 5-star category.

“The structure of hotel supply in Poland confirms that our market is still based mainly on economy properties and the purchasing power of Polish society is crucial for the development of the sector,” says Andrzej Szymczyk, Associate Director, Investment & Hospitality at Walter Herz.

Warsaw, Kraków and Gdańsk among the leaders

According to the Walter Herz report, the strongest investment locations were traditionally the main cities, among which the leading markets are Warsaw, Kraków and Gdańsk.

“Nevertheless, major tourist destinations are also expanding their offer. Condo investments with dispersed ownership structure, which in recent years have become a very popular investment product on the market, have had a substantial share in the offer. The financing model associated with their implementation has allowed for the creation of a number of properties that would probably not be financed traditionally due to location or business plan restrictions. The high risk associated with investing in such projects, as noted by the Polish Financial Supervision Authority in September last year, resulted in the banks withholding positive credit decisions for many already planned investments. Even though building permits have been issued and franchise agreements have been signed with hotel chains for some of them. This change will certainly bring a drop in the number of emerging condo facilities in the upcoming years,” says Andrzej Szymczyk.

Investors will revise their plans

Moreover, according to the expert, the state of epidemic which was introduced in March 2020, combined with the saturation of some local hotel markets, will result in a decrease in the number of active hotel facilities in the country. “Market verification related to the new conditions of hotel operation will be a difficult test, especially for the properties with poor profitability historically, which already had difficulty in providing adequate financial liquidity in the past. We can also expect that many investors will review their plans and decide to postpone the implementation of new projects or will completely abandon investing,” adds Andrzej Szymczyk.

Poland had almost 177 thousand rooms in hotels and other hotel establishments in the second half of 2019. Accommodation resources increased by 6,285 rooms compared to the previous year. Most of the supply was provided by categorized hotels with over 141 thousand rooms, with over 5,300 rooms arriving a year earlier. Hotel occupancy has also increased in recent years. Walter Herz analysts forecast that the average room occupancy in Poland in 2019 will be 50.8%.

It should be noted that since 2017 Poland has observed a disproportionately faster expansion of the accommodation base (9% increase) compared to the occupancy of rooms (2% increase). The number of tourists using accommodation venues in Poland increased by over 5% to 35.7 million people since last year.

Warsaw market with the largest increase

The hotel market in Warsaw has been experiencing the most rapid development for several years. In 2019, capital resources increased by almost 1,400 rooms which appeared on the market in 7 new facilities. Warsaw hotel resources were increased by i.e. moxy Warszawa Praga hotel (141 rooms), Vienna House Warszawa Mokotów (164 rooms), Four Points by Sheraton Warszawa Mokotów (190 rooms), Puro Warszawa Centrum (149 rooms) and Motel One (333 rooms). After renovation and rebranding, Radisson Collection re-opened at Grzybowska street with 311 rooms.

In accordance with earlier plans of companies, Warsaw hotel market should increase by about 3000 rooms this year, which are to be offered in 16 new hotel facilities. Announced openings include both hotels located in the city centre, such as Crowne Plaza and Holiday Inn Express at Daszyńskiego roundabout, Nobu at Wilcza street, NYX in the Varso complex, as well as facilities located in outer districts such as Mercure Warszawa Ursus Station, Staybridge Suites Warsaw Ursynów and Best Western Plus Warsaw Wawer.

New brands in Kraków

Kraków has been constantly popular among the tourists for many years and the number of people coming to the city for business purposes has been growing. Therefore investors' interest in this location has not decreased. 11 new hotel facilities appeared in the capital of Lesser Poland in 2019, including 9 four-star and 2 five-star hotels. Some of the openings were Balthazar Design Hotel with 25 rooms, ibis Styles Krakow Santorini with 63 rooms, Wawel Queen with 49 rooms and mGallery by Sofitel Krakow with 64 rooms, operating within the Bachleda Luxury Hotel group.

Announced openings this year include AC by Marriott Kraków hotel near Błonia which will offer 300 rooms. Hotels such as Autograph Collection Kraków (125 rooms), Curio Collection by Hilton (113 rooms), Hyatt Place Kraków (216 rooms), King Salomon (117 rooms), Mercure Kraków Fabryczna City (200 rooms), Indigo Kraków Wawel Castle (76 rooms), ibis Styles Kraków Mogilska (259 rooms), Tribe Kraków Stare Miasto (170 rooms) and Le Meridien Kraków (former Hotel Royal, about 100 rooms) will enter the market in the following years. Two hotels will also be built by Kraków Airport in Balice: moxy and Hampton by Hilton (173 rooms).

Wrocław is upgrading its supply

Wrocław hotel market is characterized by a relatively weak and dated accommodation supply base. The development of business and the growing popularity of the city among the tourists mean that investors and hoteliers are very interested in this location. The size of the accommodation base in Wrocław has been slowly developing over a number of years. It increased by over 600 rooms, which is over 13% compared to the 2018. Wrocław market added such hotels in 2019 as: Best Western Premier Wrocław with 64 rooms, managed by Dobry Hotel, DB Hotel with 149 rooms, The Bridge mGallery by Sofitel Wrocław with 184 rooms, Traffic hotel with 36 rooms, Korona Hotel Wrocław Market Square with 115 rooms and ZooHotel with 50 rooms.

More facilities are planned to open in 2020, including Altus Palace Wrocław hotel (81 rooms in the former Leipziger’s Palace) and Q Hotel Wrocław Bielany (209 rooms). Grand Hotel Wrocław (170 rooms), Hampton by Hilton Wrocław Airport (120 rooms), Indigo Wrocław (127 rooms), Vienna House Easy Wrocław (240 rooms), Holiday Inn Express Wrocław (142 rooms) and Puro Wrocław Dworzec Świebodzki (337 rooms) will welcome their guests in the following years.

Gdańsk is the Tri-City leader

Gdańsk has been growing strongly on the Tri-City market in recent years. The number of hotel rooms in the city has increased by 2,143 since 2012, which is 63% growth. At the same time, the number of hotel rooms in Sopot increased by 39% and in Gdynia by only 3%.

There were more than 600 new hotel rooms added to the Tri-City market in 2019, which were delivered mainly by two Gdańsk properties: Radisson Hotel & Suites Gdańsk with 350 rooms and Holiday Inn Gdańsk Old Town with 240 rooms.

Gdańsk envisions some more openings this year complex at Pszenna street with a four-star Grano hotel (136 rooms) and the apartment part Grano Residence (141 rooms). 350 rooms in various standards and brands under the Louvre Hotels Group umbrella will be built at Chmielna street in the following years. Holiday Inn Express and Staybridge Suites combo will appear at Grunwaldzka Avenue (246 rooms).

Indigo Gdańsk Old Town hotel (67 rooms) next to Gdańsk's Długi Targ and Reneissance Gdańsk hotel (250 rooms) located at Chmielna street are due to open in 2021.

Sopot should see opening of 100 room Sopotorium Medical Resort & SPA hotel this year. It will have an offer dedicated to guests coming for medical, rehabilitation and therapeutic stays. The resort is also expecting the opening of Radisson Blu hotel on Bitwy pod Płowcami street, which will provide 220 rooms. Polnord is planning to develop a hotel with 230 rooms at the intersection of Haffnera and Niepodległości streets. It will be branded as Crowne Plaza Sopot hotel and is due to open in 2022.

Stable Poznań and progressive Katowice

Poznań, which for many years has had a long hospitality tradition strongly associated with trade show and exhibition industry, has been characterized in recent years by both demand and supply stabilization. Hampton by Hilton Poznań Old Town hotel with 117 rooms opened in 2019. Also, moxy branded hotel with 120 rooms, owned by Polski Hotel Holding began operations by Poznań airport.

The first hotel of the Occidental by Barceló in Poland is undoubtedly among one of the most interesting openings announced in Poznań. Kupiec Poznański, which is one of the most recognizable buildings in the city, will also gain a hotel function. AC by Marriott will offer about 150 rooms there in 2022.

There were 2,300 available rooms in hotel facilities in Katowice in mid-2019. After the opening of the planned and currently constructed hotels the city supply will increase by almost 1,900 rooms. Investors' interest in this location is fuelled by the growth of the office market and numerous trade fairs and exhibitions organized in the city. Diament Plaza Katowice hotel will offer 135 rooms after expansion will re-open in 2020. Mercure Katowice City Center hotel with 268 rooms is also to open in 2021. The construction of a four-star Puro hotel is to be completed and in 2022 and will add 247 rooms.

Openings in Katowice will include Qubus hotel with 97 rooms and the two-brand Kyriad and Première Classe, which will offer about 200 rooms in total. Nova Silesia will stand on the site of the former famous Silesia hotel in the very centre of the city. The investment will include two 14-storey office buildings, which will generate 30 thousand sq m of space and a seven-storey hotel with 150 rooms. Vienna House chain is also planning to launch its second hotel in Katowice. The four-star Vienna House R.evo with 203 rooms is to combine the functions of a hotel with apartments for longer stays.