In 2009, like many other countries, Poland experienced an economic slowdown as a result of the global financial crisis, however, Poland has been one of the most stable economies within the Central and Eastern European countries, having been able to avoid the recession with a GDP growth estimated to be at 1.7% in 2009, and forecast to be over 2.5% in 2010, according to the Economist Intelligence Unit (EIU).

As a result of the global economic downturn, the decrease in overall tourism demand, especially from business travellers, resulted in a year-end hotel occupancy decline in Warsaw, from 66% in 2008 to 60% in 2009.

Year-to-March figures in 2010, on the other hand, have shown an improvement on the previous year, with occupancy increasing by nearly 9%, while RevPAR showed a decrease of only 1% in zloty terms, from PLN168 in 2009 to PLN167 in 2010, in contrast to a 9% drop from 2008 to 2009.

As co-host of the European Football Championships in 2012 (‘Euro 2012'), together with the Ukraine, there has been increased interest in hotel investments in Poland. Since Central and Eastern European countries have been perceived as ‘risky' environments during the recent recession, however, a number of developments in the region, including Warsaw, have been halted or even suspended, thus leading to very few confirmed future developments in the city.
 
Hotel Demand Patterns

Passenger movements at Warsaw's international airport have increased at a compound annual growth rate (CAGR) of 8.3% in nearly 20 years, with peak growth being seen after Poland's entry into the European Union when it became more exposed to international markets.

The recent financial crisis, however, impacted passenger movements, with fewer international travellers leading to a decrease of 12% in total arrivals in 2009. The airport opened a second terminal in 2008, and the new Southern Pier, for the Terminal 1 and 2 complex, is currently under construction.

In 2008, the number of room nights spent in Warsaw hotels was 3.2 million, showing a 2% increase on the previous year. However, for the year-to-March 2009 the country experienced a drop in overall demand with a decrease in both domestic and international travellers of 20% and 11%, respectively.

The main international source markets for Warsaw are Germany, the UK, Russia and the USA. However, with the effects of the economic crisis influencing these countries and their businesses, travel from these markets decreased during 2009.

On the other hand, international demand has once again started to grow in 2010, with overnight stays in the Mazovian region, which includes Warsaw, increasing by 24% year-on-year in January and 5% in February.

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This market snapshot is part of a series of articles that HVS is producing every month on a series of key markets. In writing these articles we aim to combine the market expertise of HVS with STR Global data for each key market. Our analysis for this market is based on data for a sample of more than 7,500 rooms, as provided by STR Global.