Hotel investment appetite for Poland: alive and kicking?

In an average year, the city of Berlin alone receives twice the number of hotel transactions than Poland as a whole. However, Poland has developed a strong track record in other commercial real estate sectors and, as a result, has an even stronger brand for investing. This has laid down the foundations for global capital to enter the hotel sector, and, indeed, there has been an uptick in the number of international hotel investors actively pursuing opportunities in Poland.

Whilst the pandemic has put many investment decisions on hold, the long term view remains unchanged. Travel and hospitality will bounce back as it has done in the past. Yes, the interests between operators and owners will have to be realigned. Yes, there will be a new set of risks that will have to be accounted for. And yes, the direction in which investors are looking will change.

Large institutional capital has always been attracted to business hotels in major Polish cities. These markets are by far the most transparent with extensive comparable operational evidence available. As a result, city hotels are easier to analyse, business is more quantitative and rests on demonstrable business drivers.

In addition, tourist destinations in Poland are where independent hotels dominate. This means the potential for value creation: through refurbishment, adopting international brands, as well as more effective cost management.

“There is also a growing supply of institutional product that is being developed across major tourist destinations in Poland. Top class hotel brands housed in impressive architectural projects are slowly reshaping the holiday spots that we know”, adds Agata Janda.

Leisure demand is where many see great potential for growth. This increased interest is also driven by the fact that Polish destinations are becoming more popular with international travelers, especially from Germany and the Nordics.

“There is a flood of capital ready to invest in hotels. In the current market, it is mainly opportunistic investors, but institutional money will be ready to enter when the right opportunity comes along. The strongly growing tourist landscape in Poland may just do the trick”, summarise Agata Janda.