Down market the only way

According to a recent report by consultants Deloitte & Touche, only budget hotels have proved resilient to the post-September 11th crisis that has beleaguered the tourist trade around the world. Those with three stars and above have been struggling to fill their rooms, not least of course in Poland. While they're still relatively thin on the ground here, one to two star hotels are about to make a stronger presence felt in this part of Europe

"There were no budget hotels in the UK ten years ago," says Julia Felton of Deloitte & Touche. Now they number nine hundred and offer 55,000 rooms combined, and the consultants estimate that there will be around 90,000 in that country by the middle of the decade. This comparatively healthy predicament for this sector in Britain, is being repeated across Europe, according to the Deloitte & Touche report: "The economy sector, (...), has remained virtually unaffected by events and its occupancy levels remain unchanged at around 62%. (...) As people opt to stay closer to home, and travel by road or rail rather than plane, these hotels have remained insulated from global events."
Poland would seem to be about to follow suit, according to Dorota Latkowska, Knight Frank's hotel specialist for this country, who explains that although the low budget hotel market only really got off the ground three years ago here, it is now beginning to infiltrate previously unexploited areas such as near motorways and resorts such as the Mazuri lakes, an extremely popular holiday destination among Poles. Warsaw is the last place many developers are checking out as they could build "three for the price of one", in Ms Latkowska's words, outside the capital, so we can expect to see small economy class hotels sprouting up near heavy traffic in the provinces in the next few years. "It's easier to find a good location in the regions than Warsaw," says Jean Philippe Savoye, Managing Director of Accor Polska. "In the capital, if you want to launch a new brand, you have to have a good location and this is expensive in Warsaw."
That the top end of Poland's hotel market is saturated is old news. With each new four or five star hotel that has opened in Warsaw over the past year or so, it has been met with a groan of dismay from those working in the hospitality business here. There are a lot of very plush and empty rooms in this neck of the woods, which means that no hotel chain in its right mind is going to add to them. They're going down market instead and more often than not, outside Warsaw to begin with as well.

Budget from now on
"There's been a change of policy. Today we think that the mid to high range hotel market is completely full and we want to focus on the budget market for the next few years," says Jean Philippe Savoye. A report by BOSS Business News Poland, that Accor's strategic partner in Poland Orbis, is now modifying its approach to the Polish market and "focusing on the most profitable segment of operations, which has the best perspectives for the future, that is economy class hotels", would seem to signal that as far as hospitality is concerned, Poland is about to follow Western Europe's example very shortly.
When the budget airlines, such as Ryan Air and EasyJet, start flying in and out of Poland, their passengers in all likelihood are going to be looking for comparatively cheap places to stay. And not just them. Companies are also keen to cut back on travel costs as well and with Poland's entry to the EU, there could well be an influx of employees spending their nights in 'no-frills' accommodation.
"Companies are increasingly turning to budget hotels, as they are to low-cost airlines, to reduce travel budgets; some estimates suggest that up to a third of corporate spending on accommodation can be reduced by switching to budget brands, without a significant loss of quality of facilities," stated a report in The Times newspaper in the UK, on February 4th this year.

The regions first
Given the legacy of communism, there is no real tradition of economy hospitality in Poland. Between a five star hotel and a private room hired out somewhere miles from the city centre, there is a gaping chasm. Comfort and quality until quite recently have come at a price few can afford. But this won't be the case a few years from now.
There are already twelve of Accor's 'Ibis' brand hotels in various parts of Poland and in the next five years there are set to be another five or six, in hitherto uncharted cities such as Bialystok, Opole and perhaps Lublin, depending on the market. Once this has been accomplished, the French operator will look to launching hotels from its very cheap chains such as Formula One and Etap, though the company remains relatively cautious about the market here and will "develop one of these hotels in the next three years, not before", according to Jean Philippe Savoye.
Its compatriot competitor Groupe Envergure is also intent on spreading its low cost trademark, budget brand Campanile, all over Poland. It already has four such hotels operating in the country in Kraków, Katowice, Szczecin and Wrocław and has two under construction in Lublin and Poznań. A complex of three different standard hotels is also under development in Warsaw, though they all more or less fall within the economy bracket. The largest will be a Campanile hotel of one hundred and ninety four rooms, the next of the Prestige brand, which will offer one hundred and forty four and the last a Premier Classe hotel of one hundred and twenty six. This number, according to Mariusz Kabala, Commercial Director of the group in Poland, is unusual, as in other parts of the country they rarely exceed eighty. Accor's stretch a little further to around one hundred and twenty, on the other hand.