According to data from STR Global, Warsaw ranks 10th among the main European hotel markets in terms of the growth of the RevPAR1 index in 2023 compared to 2019. Last year, hotels operating in the capital’s market achieved a 21% year-on-year increase, as well as a 26% increase in RevPAR compared to 2019. The situation in the Warsaw hotel market well reflects the trends across the entire country. According to Cushman & Wakefield, Poland is in first place among the CEE-62 countries considering the increase in RevPAR in 2023 compared to 2019.
The list of the top ten European markets in terms of average revenue per available room growth (EUR), RevPAR, in 2023 compared to 2019 is led by Rome, which recorded approximately a 55% increase. Following the Italian capital is Paris (53%) and Edinburgh (almost 48%). Warsaw, which occupies the 10th place, was less than 3 pp behind the ninth place Zurich.
The growth of the average income per available room in the Warsaw hotel market in 2023 is a result of, among other factors, higher occupancy than in 2019. It is worth noting that Warsaw, along with Vilnius and Edinburgh, are the only cities among the main European markets that showed an increase in this regard. This was possible thanks to the growing demand created by both foreign and Polish guests. According to an analysis of HotStats data, hotels in Warsaw noted an increase in tourist demand in 2023, and the number of overnight stays driven by tourist demand per available room was 20% above the level from 2019. In addition, revenue generated by tourist demand per available room exceeded the pre-pandemic level by 35%, comments Maciej Prończuk Consultant CEE & SEE, an expert in the hotel market at Cushman & Wakefield.
The increase in RevPAR in Warsaw in 2023 was also caused by an average room price (ADR index in EUR) higher by 25% compared to 2019.
Hotel managers take actions aimed at generating a higher ADR to minimize the negative impact of rising operational costs, which is one of the main challenges of the real estate market. A higher ADR is also due to the change in the nature of hotel demand. There is a noticeable increase in the percentage share of individual tourist guests, who usually pay higher rates for accommodation. We also observe a similar ADR growth trend across Poland. As a result, the RevPAR index for the entire country increased by over 21% year-on-year in 2023 and was 18% higher compared to 2019. This is the highest RevPAR growth compared to 2019 among all the CEE-6 countries, adds Maciej Prończuk.
As Maciej Prończuk adds, the further revival of the Polish hotel market will also largely depend on the increase in the number of business trips. While Oxford Economics forecasts a return of business demand in Poland to the level of 2019 only by 2027, many indications suggest that this may happen much earlier.
For instance, Warsaw hotels are already recording an increase in business demand. HotStats data show that, despite the fact that the number of overnight stays (per available room) driven by this demand in 2023 was 16% lower compared to 2019, there was a noticeable over 12% year-on-year growth. When it comes to revenue (per available room) generated by business demand, Warsaw hotels were on the same level in 2023 as they were in 2019. There is also a positive situation related to demand generated by conference guests – in 2023 the number of overnight stays (per available room) driven by this segment increased by 25% year-on-year. Even though the number of overnight stays driven by conference demand (per available room) was 9% lower than in 2019, at the same time, this demand generated an almost 13% higher revenue (per available room), sums up Maciej Prończuk.
[Note: RevPAR means Revenue Per Available Room,
ADR means Average Daily Rate,
CEE-6 includes Bulgaria, Czech Republic, Hungary, Poland, Romania, Slovakia]
