Outstanding prospects for hotel construction in Poland

The prospect of Poland’s co-hosting of EURO 2012 Football Championships, a favourable economic situation in the region, a steady inflow of EU funds for the development of tourism, insufficient investments in the sector in the past – all these factors will cause the value of Poland’s hotel construction market to increase two and a half times to well over PLN 1bn (approx. €250m) within the next five years.

The prospect of Poland’s co-hosting of EURO 2012 Football Championships, a favourable economic situation in the region, a steady inflow of EU funds for the development of tourism, insufficient investments in the sector in the past – all these factors will cause the value of Poland’s hotel construction market to increase two and a half times to well over PLN 1bn (approx. €250m) within the next five years.

After a few years of drops, 2005-2006 saw improvement in the market of hotel and other tourist accommodation construction. In 2006, the value of hotel construction expressed as sales revenues from the construction of hotels and other tourist accommodation establishments rose by 3% from 2005 to PLN 439m. PMR estimates in a recent report entitled 'Hotel Construction in Poland 2007 – Development Forecasts for 2007-2012' that the value of hotel construction will increase by an average of approximately 17% a year over the next five years, to almost PLN 1.1bn (€280m) in 2012.

According to PMR’s estimates, in 2008-2012, the hotel room stock will be expanding at the average rate of 7% a year, which will correspond to almost 30,000 hotel rooms in approximately 560 hotels. In the period covered by the forecast, approximately 110 hotels can be built every year, which will represent a substantial improvement from approximately 50 hotels completed in each year of the period 2001-2006. The number of constructed hotels is expected to increase in all hotel categories. Measured by the number of new establishments, the majority of new hotel rooms will be built in the three-star segment (almost 15,000 rooms) and one- and two-star hotels (over 12,000 rooms). It should be noted that despite considerable increases, the value of hotel construction will top PLN 660m (€170m), i.e. the level recorded in 2001, which was a particularly good year for hotel construction, only in 2009.

The number of tourists staying at hotels in Poland will continue to grow in the upcoming years. The total number of visitors coming to Poland will expand from 15.7 million (2006) to over 20 million (2012-2013). Rapid growth in the number of foreign tourists visiting Poland will be mainly fuelled by such factors as a favourable economic situation in Central and Eastern Europe, dynamic growth of low-fare airlines, improvements to road infrastructure, a rapid increase in the number of conferences held around Poland and more EU funds for the development of tourism.

The largest hotel chains operating in the Polish market are Orbis, Start Hotel, WAM Hotels, Gromada, Qubus Hotel System and Interferie. It should be noted that eight out of ten largest global hotel groups are already present in Poland and almost all of them have plans to expand into the region. Additionally, plans to expand in Poland have been also announced by those international hotel chains which have not been present in Poland so far, including Wyndham Hotels & Resorts, Choice Hotels and NH Hotels. Furthermore, the news that Poland would host the EURO 2012 Football Championships induced some hotel chain operators and developers to revise their strategies and increase the number of hotels they intended to build in Poland.

PMR estimates that according to the published plans, hotel operators and developers aim to build almost 20,000 hotel rooms over the next five years; Orbis, the consortium of Louvre Hotels and Warimpex, InterContinental, Chaber and Comfort Express plan to build the largest number of new hotel rooms over the next five years. Planned investments will be carried out in all categories of hotels, including luxurious establishments and economic standard hotels, mainly in larger cities and seaside resorts; the majority of the chains plan to build two- and three-star establishments. Hotel operators also intend to expand the stock of conference rooms and recreation and leisure facilities.