Hotels - the booming market in Poland

The hotel real estate market in Poland is experiencing a phase of dynamic growth. The boom which began in 2006 continues
and this trend is projected to continue until 2012. Developers and hotel operators looking for investment opportunities
in the hotel market see a huge potential in Poland. Undoubtedly, the factors increasing this interest in Poland include the
limited supply of hotels, the rising demand due to the increased number of business travellers, the continued growth of
spending on tourism and the hosting of the European Football Championships in 2012.

Despite numerous investments, the
supply of hotels is still limited and
concentrated mainly in large cities
such as Warsaw, Kraków and Wrocław.
Poland is one of the European countries
with the smallest number of lodging
establishments: approximately 40 places
per 10,000 inhabitants, a very low number
when compared to the Czech Republic
which boasts numbers nearly four times
higher. The future supply will be provided
largely by economy class two- and threestar
hotels, as well as four- and five-star
hotels, which are planned to be constructed
in cities, which have not had higher class
hotels so far. This gives newly constructed
hotels a competitive edge in the local
market and provides greater freedom in
shaping the pricing policy. There is also
an increased interest in smaller towns and
tourist destinations, including those along
the Baltic Sea coastline and in southern
Poland. The regions where accommodation
was previously provided mainly by family
homes are also becoming increasingly
attractive. New hotels managed by wellknown
Polish and international hotel
chains are growing in importance as well.

The hotel real estate market in Poland is experiencing a phase of dynamic growth. The boom which began in 2006 continues
and this trend is projected to continue until 2012. Developers and hotel operators looking for investment opportunities
in the hotel market see a huge potential in Poland. Undoubtedly, the factors increasing this interest in Poland include the
limited supply of hotels, the rising demand due to the increased number of business travellers, the continued growth of
spending on tourism and the hosting of the European Football Championships in 2012.

Despite numerous investments, the
supply of hotels is still limited and
concentrated mainly in large cities
such as Warsaw, Kraków and Wrocław.
Poland is one of the European countries
with the smallest number of lodging
establishments: approximately 40 places
per 10,000 inhabitants, a very low number
when compared to the Czech Republic
which boasts numbers nearly four times
higher. The future supply will be provided
largely by economy class two- and threestar
hotels, as well as four- and five-star
hotels, which are planned to be constructed
in cities, which have not had higher class
hotels so far. This gives newly constructed
hotels a competitive edge in the local
market and provides greater freedom in
shaping the pricing policy. There is also
an increased interest in smaller towns and
tourist destinations, including those along
the Baltic Sea coastline and in southern
Poland. The regions where accommodation
was previously provided mainly by family
homes are also becoming increasingly
attractive. New hotels managed by wellknown
Polish and international hotel
chains are growing in importance as well.

At the end of the second quarter of 2008,
approximately 180 hotels were either at
the development or modernisation stage
and they are due to be delivered between
the fourth quarter of 2008 and the fourth
quarter of 2012. Nearly 200 hotels to be
delivered in the period 2010-2012 are
currently in the pipeline. Given the hotels
under construction and those planned, it is
estimated that approximately 20,000 new
hotel rooms will be available for occupancy
by 2012. In terms of new supply the most
dynamically developing markets include
Wrocław (17 hotels under construction
and planned), Tricity (16), Kraków (15) and
Katowice (7). The hotel real estate market is
also developing in Łódź. Poznań, however,
sees few new hotel investments, even
though this city has a large potential due
to its business character and its conference
and exhibition facilities.

The following trends can be seen in the
Polish hotel market:
• Hotel operators look for prestigious
locations in large and medium-sized cities
• The demand for hospitality services is
generated mainly by corporate clients
• High occupancy on business days and
low demand for weekend stays
• Extension of the facilities for companies
at high standard hotels (conference halls,
auditoria and exhibition space)
A potential niche in the economy class hotel
sector (there is a relatively small number of
lower class hotels)
• Continued interest among investors in
smaller towns
• Increased spending on tourism
• Continued increase in the number of
visitors coming for tourist and business
purposes
• Increased hotel room occupancy rate
• Rising demand for hotels and aparthotels
in locations considered as tourist resorts
(development of condo hotels in tourist
destinations)
• Increased interest in the construction of
hotels near airports and railway stations
• Increased number of investments in
conference hotels on the outskirts of
large cities