Poland Market Update

Poland Market Report

As a newcomer to the group of developed markets, Poland faired well in comparison to the rest of the world economy elite countries. The Polish economy is considered steady with GDP during the second decade of 2000s consistently growing. In the region and amongst the 28 EU countries, Poland recorded one of the highest GDP growth. In 2019 GDP rose by 4.1% year over year, which was the fifth result in EU-28. In the meantime in EU-28 the GDP growth was 1.5 percent, in the euro area – 1.3 percent.

Foreign tourists spent in Poland USD 9.8 billion, or PLN 37.7 billion, more by 2.% in USD and 7.8% in PLN compared to 2018. The total foreign expense receipts from foreign incoming tourism amounted to USD 18.6 billion, or PLN 71.5 billion, and were higher than in 2018 by 10.7 and 17.1% respectively.

Over the last few years, Poland has also developed a strong domestic tourism market because there is a solid leisure base in holiday resorts, as well as the business areas developed in the city. The motivation of the Poles to travel has been recently stimulated by the development of governmental social policies specifically the “500+” program (a monthly transfer of PLN 500 for every child in the family). Poles made 50 million trips around the country in 2019 (an increase by 4.8%), including almost 30 million weekend trips (an increase by 3.6%) and slightly over 20 million longer holiday trips (an increase by 6.5%). The total expenditure on domestic travel amounted to PLN 30.8 billion and was higher by 11.3% than in 2018.

Over the last couple of years international hotel chains are intensifying development of their brands in Poland.  Currently, the top three international hotel chains in terms of the number of hotel rooms in Poland are Accor/Orbis, Hilton Worldwide and Marriott International. All of them noted an intensive growth in the number of hotels and hotel rooms in the recent years, the growth primarily achieved through the application of franchise agreements.

Covid-19 Challenges

From May 4th, accommodation services restarted in hotels. In the first month after the complete lockdown the results of hotels in major Polish cities were very low. The biggest drop in OCC 82.8 p.p. was observed in Krakow from 84.9% in May 2019 to 2.1% in May 2020. In other cities the situation was not much better.

In the survey taken by IGHP in July, it was reported that at the beginning of July, every second hotel in Poland recorded an occupancy rate of less than 30%. According to the survey, 60% of the hotels have lower room rates than last year’s season. Unsatisfactory results from the beginning of the summer holidays mean that more than half of hoteliers expect profit not earlier than 2022. The survey shows that the vast majority of hotels (93%) have already resumed operations. Although the number of hotel guests increased in June compared to May this year, the average occupancy rate in hotels still remains low.