According to global real estate services firm Cushman & Wakefield’s latest report Trends Radar - Riding the Wave of Change in Real Estate, the Polish hotel market is seeing a steady increase in demand and key performance indicators. These positive trends are expected to continue into 2024, with a recovery in the number of international guest nights in Polish hotels. In the long-term, the market will increasingly focus on hotel retrofitting and implementing modern technological and ESG solutions.
Demand on the rise
These positive trends have been mostly driven by the increase in domestic demand while a recovery in the number of international nights is expected in 2024. Next year, the number of nights sold in Polish hotels is expected to surpass the 2019 level by 7%,
says Maciej Prończuk, Hotel Market Expert, Cushman & Wakefield.
Warsaw hotels have already reported an increase in corporate demand. At the end of Q3 2023, the number of room nights and revenue reached 81% and 98% of 2019’s levels respectively. Meanwhile, conference demand increased by nearly 20% compared with the same time last year. Although it remained 25% below the 2019 level, revenue was only 5% below 2019’s figure,
adds Maciej Prończuk.
Key performance indicators are also improving
While further growth is expected in 2024, it is likely to be at a slower pace. Occupancy levels are already close to pre-pandemic figures and ADR growth will be constrained, among other things, by inflation. After the rapid recovery period, the hotel market in Poland is stabilizing with more moderate performance growth,
adds Maciej Prończuk.
The growing focus on retrofitting and ESG
It is worth emphasising that according to ‘Hotel Investment Scene in CEE: Getting Real about ESG in Hotel Real Estate, a report from Cushman & Wakefield and CMS, Warsaw is ranked among the top 10 European markets in terms of the share of eco-certified hotels with nearly 10% of its hotels having a recognized green certificate. While the level of certification is lower than that in the office sector, Poland leads the way among CEE-6 countries in terms of the number of BREEAM and LEED certified hotels. However, although some progress has been made, hoteliers still have a long path ahead to reduce their carbon footprint,
adds Maciej Prończuk.
ESG is also becoming an important criterion in lenders’ and operators’ decision-making processes. According to Cushman & Wakefield’s ‘Hotel Operator Beat H1 2023’ report, 42% of surveyed operators are likely to offer higher rent and 30% to offer more key money for hotels with the highest sustainability and ESG credentials,
concludes Maciej Prończuk.
1 Per occupied room vs the same time in 2019.
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in approximately 400 offices and 60 countries. In 2022, the firm reported revenue of $10.1 billion across its core services of property, facilities and project management, leasing, capital markets, and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), Environmental, Social and Governance (ESG) and more. For additional information, visit: www.cushmanwakefield.com.