PL

Hotels prepare for recovery

Hotels
Most owners and operators expect a rebound in the hotel sector in European capitals over 2023-2024, according to Cushman and Wakefield.

According to 70 pct of those surveyed, smaller regional cities, driven by domestic demand, should recover faster than the capitals.

In Poland, the coronavirus pandemic hit the hospitality industry with full force in March 2020. Many group- and individual-bookings and conferences were cancelled in the last week of February. To minimise their losses, hotel managers and operators took numerous steps to reduce their costs. As staff salaries are the main hotel operating cost they were also the first to be hit by restructuring measures. Many hotels decided not to renew contracts or terminated them with temporary employees and also suspended hiring. Just as in other industries, hotel operators encouraged their staff to take their holidays and child care leave. Luckily, many companies received subsidies for their employees’ salaries and for their social insurance contributions, allowing them to retain key staff during the lockdown periods. Despite hotels being shut, many fixed costs remained such as those of mandatory safety maintenance for their buildings and installations. The easing of pandemic restrictions in May 2020 allowed hotels to begin recovering. Demand from domestic tourism in Poland was high, which helped improve overall year-end financial results. Unfortunately, towards the end of December 2020 new restrictions were imposed on the hotel industry. From February 12th until March 14th hotels were allowed to open for guests but with a maximum occupancy of 50 pct. Only a few hotel operators reported slightly better results in February as a result of strong performance on weekends, especially over the Valentine period. However, the sharp rise in Covid-19 cases and the re-imposition of the lockdown on hotels for tourists with a limited number of business-stays permitted in the first days of spring once again adversely affected hotel financial performance. According to STR Global, the first quarter of 2021 was considerably weaker for Polish hotels in terms of RevPAR than the same period of 2020. All five of the largest cities in Poland reported a RevPAR decline of between 64 pct and 84 pct. It is important to point out that the first quarter of 2020 had already been weaker than the three months of 2019 by 20-30 pct. In terms of average occupancy rates for hotels that remained open, Krakow recorded the lowest at below 11 pct in March 2021. While occupancy levels for that month were boosted at weekends, business days had a far more limited impact. In March 2021, Average Daily Rates (ADR) were down by between 5 pct in the TriCity and 33 pct in Kraków on March 2020. However, in March 2020 (at the beginning of the pandemic) hotels tried to maintain their prices. In March, as in previous months, there were no significant differences in the performance figures for hotels in and outside cities, or between hotels from the business and tourist segments. As the vaccination campaign has started to pic up steam, hotels have been permitted to open for guests since 8th May with a maximum occupancy level of 50 pct. This rule is to remain in force until 5th June and beyond provided there is no spike in infection rates.
Justyna Kijewska, associate, senior portfolio manager at Cushman & Wakefield

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schedule 09 June 2021
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schedule 09 June 2021
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Latest in Hotels

schedule 09 June 2021

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schedule 09 June 2021

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schedule 01 June 2021

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schedule 19 May 2021

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schedule 05 May 2021

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schedule 12 March 2021

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schedule 04 March 2021

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schedule 08 February 2021

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