Hotels closed for May holidays. The industry records 67% drop in arrivals

man at the reception desk

Wpis dostępny jest także w języku: polski

Domestic tourists were responsible for as much as 70% of hotel occupancy in Poland in 2019, according to CBRE. This is a good forecast for this year as long as hotel facilities open. The key will be holidays, for which Poles have already started making reservations. However, it is not known when the government will decide to open the hotels. Data collected by CBRE shows that in November 2020, the number of overnight stays fell by 46% year-on-year, while the number of arrivals dropped by as much as 67%. Kraków found itself in the most difficult situation, where the traffic is mainly generated by tourists from abroad. The situation is slightly better in Wrocław and Tricity.

– The beginning of last year was promising for hotels in Poland. Data from January and February indicated an improvement in demand. Then the pandemic changed everything and hotels were recording month-to-month drops, with a break in those moments when restrictions were not in force. This year, the first recovery can be expected in the second quarter, although the decision to close hotels for May Day has shocked the industry. Indeed, domestic tourism is a key driver of recovery and people need rest after months of pandemonium. Therefore, resorts are likely to be the first to rise. However, as far as business city hotels are concerned, their recovery may take up to two years from the easing of restrictions,” says Grzegorz Kaleta, hotel market expert at CBRE.

Big drops in hotel sector

Demand for hotels in Poland before COVID-19 indicated an upward trajectory. In 2019, the hotel market saw more than 23.5 million arrivals and almost 45 million overnight stays, reflecting growth of 5.5% and 6.6% respectively compared to the previous year. Tourists spent an average of 1.9 days in a hotel in 2019. The situation changed after the outbreak of the pandemic. The latest available data shows that in November 2020, arrivals fell by 46.5% year-on-year and the number of overnight stays decreased by 67.1%.

– Poland began 2021 with the closure of most hotels with no known date for reopening. It is also unclear how the vaccination programme will affect the recovery in demand. Still, it is unlikely that large-scale investment projects will start already this year. Especially since so far many hotel investments have been put on hold or changed into residential projects, such as the Vienna House in Wrocław. However, as soon as the situation stabilises and the uncertainty disappears, we expect an increase in investment activity – says Grzegorz Kaleta, hotel market expert at CBRE.

Investors are very cautious about the hotel market, Warsaw remains the first choice. However, due to problems with bank financing, the uncertain situation related to COVID-19, one should expect postponed opening dates of new facilities and a high level of postponement of projects in time. Investors are considering new opportunities for now, potential hotel acquisitions will be scrutinised more closely and only the best properties in the best locations will be considered.

Source: CBRE

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