Experts of global real estate services firm Cushman & Wakefield expect transactional activity on the Polish hotel market to pick up in 2024 as key performance indicators continue to improve and the pressure on investors to allocate capital builds up. Although 2023’s total investment volume on the Polish market was below that of 2019, it reached nearly EUR 83 million - an 82% increase year-on-year. Warsaw, Vilnius and Edinburg are the only main European hotel markets that reported year-on-year growth in occupancy levels last year. At the same time, Warsaw came third for ADR[1] growth (EUR) in 2023, with an increase of 20.1% year-on-year.
According to data from Oxford Economics, domestic demand accounted for 64% of the number of nights in Warsaw in 2023, marking an increase from 61% in 2019. The growth in domestic nights is expected to continue throughout 2024 and to surpass pre-pandemic levels by as much as 30%, while the number of international nights is likely to be comparable to or just above 2019’s level. It is worth noting that the share of international leisure demand soared from 44% in 2019 to 72% in 2023,”
says Maciej Prończuk, Consultant, Hospitality CEE & SEE, Hospitality Expert, Cushman & Wakefield.
Improving profitability in spite of rising costs
ADR growth of nearly 25% in Warsaw compared with 2019 (in EUR) was lower than in Budapest (34%) and Europe as a whole (27%), but higher than in other CEE-6 key markets such as Prague, Sofia, Bratislava and Bucharest. It is worth noting that although of all the CEE-6 capitals, Warsaw had the lowest ADR, the average RevPAR (in EUR) for Warsaw hotels in 2023 was above that for Bucharest, Bratislava and Sofia thanks to high occupancy levels,”
explains Maciej Prończuk.
Hotel investment activity gradually picks up
Although hotel investment volumes in Poland are still well below pre-pandemic levels, 2023’s result was undeniably a positive signal for the coming months. There were four transactions for a total of more than 760 hotel rooms. Although some purchases were made by Polish investors, last year’s headline deal was undoubtedly the acquisition of Crown Plaza and Holiday Inn Express at The Warsaw HUB by a French-based investment fund, which was brokered by Cushman & Wakefield. It heralds more transactions with cross-border capital,”
says Maciej Prończuk, Consultant, Hospitality CEE & SEE, Hospitality Expert, Cushman & Wakefield.
In 2024, moderating inflation is likely to have a positive impact on interest rates and, consequently to stabilise hotel yields,” c
oncludes Maciej Prończuk.
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 or follow our Linkedin account.
[1: ADR (Average Daily Rate) represents the average rental income per occupied hotel room in a given time period.]