Casting a discreet spell

The extended-stay hotels market in Poland is still poorly developed, despite those that have recently come onto the market having been a great success

Attempts to analyse the extended-stay hotels market in Poland are never easy, since no Polish definitions of such services exist. Even firms and institutions dealing in hotel-industry research, including the Polish Hotels Association and such leading consultancy companies as Colliers International, Jones Lang LaSalle and HVS International, admit they have no statistical data on the subject. Therefore the only information concerning the scope of the phenomenon and market trends are provided by hotel chains and the specialist press.
Both free-standing exclusive residences and groups of apartments built alongside existing hotels, as well as single flats in blocks or tenements whose managers offer additional services such as laundry, cleaning and shopping, are classified as extended-stay hotels - otherwise known as aparthotels. Extended-stay hotels are also popularly known as apartment blocks or residences, though some hoteliers claim these terms could prove misleading and should only be used for high-standard residential buildings in which flats are exclusively for sale rather than rent.
Customers for Polish extended-stay hotels are usually foreigners or representatives of foreign companies operating in Poland, although diplomats and well-to-do tourists also use their facilities. Tomasz Karwacki, the marketing director of Hyatt Regency hotels, remarks that: "They are frequently foreigners who intend to purchase a home in Poland. In such cases it takes between 4 and 6 weeks on average to choose an offer and settle all the formalities, during which time they need to live somewhere. The company which runs the Hyatt also manages Residence 1898, one of Warsaw\\\'s aparthotels."

Between the Bug and Odra rivers
Experts cautiously set the number of extended-stay hotels in Poland at between 10 and 20. Tomasz Dziedzic of the Tourism Institute, a state-owned institution dealing with comprehensive hotel-market research, believes that: "The market is so small that no need exists for statistics to define any kind of categories." Robert Woliński, a hotel market specialist and owner of the ehotelarz.com website, thinks that aparthotels themselves only very rarely need to be put into categories, since they do not need to be classified in such a manner, and furthermore, this approach could even prove to be unhelpful.
The number of stars that can be accredited to extended-stay hotels is limited by the fact that they do not offer a full range of hotel services. Apart from that, not all aparthotels can be officially recognised as hotels, as it is an essential part of the definition used by the Central Office of Statistics (GUS) that hotels should provide catering services (often not available in extended-stay hotels) and that they should offer mostly single and double rooms. Two years ago, GUS included these extended-stay hotels in the category of "other hotel facilities" comprising "accommodation buildings divided into rooms, under one management, providing certain services". In 2004 there were 580 "other hotel facilities" in Poland.

The Central Vistula Sector
The first rented residences affiliated with hotels appeared in the InterContinental hotel in 2003. Of the Residence Suites in the uppermost storeys of the building on ul. Emilii Plater, there are 75 apartments of between 38 to 86 sqm that can be rented for a minimum period of 14 days. The monthly rent is between EUR 2,400 and 4,800, depending on how much space is rented.
One of the 6 apartment buildings in the Orco MaMaison group\\\'s portfolio is Residence Diana, which has been operating for 8 months on ul. Chmielna. They also have other extended-stay hotels in Prague, Budapest and Bratislava, while they have another 100 apartments currently under construction in Moscow. The Warsaw complex is situated in reconstructed 19th-century buildings, containing 46 apartments of between 45 to 105 sqm, as well as 1,500 sqm of office space. Agnieszka Tucharz, general manager of Residence Diana informs us that: "For short 1- to 7-day stays prices vary from EUR 120 to 375 depending on the standard."
The Warsaw Residence 1898 extended-stay hotel was built in a similar style and opened in October 2005 on ul. Marszałkowska. Several of the 24 apartments (50 - 78 sqm in area) can be connected to make larger residences. Alicja Beczek, the manager of Residence 1898, informs us that: "The minimum tenancy is one month, though we most frequently conclude contracts for a 1-year period."
Though aparthotels appeared relatively recently in Warsaw, some buildings have already aged. In the middle of February, Holland Park Apartments purchased through Keen Property Partners the two Holland Park apartment blocks on the corner of ul. Ksi±żęca and pl. Trzech Krzyży from ING Real Estate. The monthly rent in Holland Park is between EUR 2,300 and 2,400, with occupancy now up to 60 pct. Though a clear demand exists, the new owner does not intend to commercialise the remaining part soon. Maria Młynarska, the manager of the Holland Park residence, reveals that: "Capital overhauls of all apartment blocks are to begin this year." Floor and wall coverings will be changed as well as some furnishing elements, while the layouts of the rooms will be modernised.
The investment, costing EUR 2.5 mln, will be carried out in stages, so as to avoid inconveniencing the current residents, and will take around 2 years. 20 of the 64 apartments will be given a new look this year.

On the Upper Vistula
Mały Kraków in Kraków is another kind of extended-stay hotel. It includes 32 flats, 17 of which are scattered throughout the city, with the remaining 15 being in a single building. Grzegorz Turnau, the owner of Mały Kraków, remarks that: "The whole thing started from a single flat which was too large to be rented to, for instance, students, so we converted it to into an apartment." The chain is mainly aimed at tourists, which means the longest stay lasts no more than a month. Occupancy is between 35 and 40 pct outside the tourist season which, according to the owner, suffices only to cover operating costs; but during the holiday season, occupancy reaches almost 100 pct.

Ebb or Rising tide
But what class of customers can the operators of such facilities count on? Maria Młynarska of Holland Park is of the opinion that they are mainly foreigners coming to Poland as representatives of western firms. She believes that: "These foreigners have already used such facilities in other countries and are accustomed to high standards. Apart from the official reasons, corporations find it easier to rent an apartment than a home from a private person, though the latter option is usually less expensive."
Another factor which operators of such facilities find beneficial is the rising costs of travel, above all business trips, which force delegated employees to spend longer in the place they are visiting. Apart from the higher profits generated, such facilities are also have greater resistance to seasonal and weekly demand fluctuations. The lower operating costs of aparthotels are also a positive factor, cue to having less common space, less frequent cleaning, a relatively low turnover of tenants and fewer service staff required.  

Tomasz Cudowski
Grateful thanks to Robert Woliński of ehotelarz.com website for his assistance