Hotel accommodation will not get cheaper in 2023, the trend of shortening stays will be perpetuated

The hotel industry, after a good 2022, is moderately optimistic about the outlook for this year, although uncertainty makes forecasting difficult, CBRE's head of hotel property management Grzegorz Kaleta assessed. From the point of view of hotel guests, however, it is certain that room rates will not fall throughout 2023.

In terms of revenue, last year was the best in many years. However, due to rising prices of energy, heating and salaries, among others, a large part of the revenue was eaten up by costs. That doesn't change the fact, however, that hoteliers certainly approached budget and expense planning for this year with more reserve, which means they are better prepared for uncertainty. Last year's results may be hard to catch up with, but hoteliers see hope in business. Bookings for the first quarter at major hotels in major cities are encouraging. For now, however, it is too early to estimate anything, according to Kaleta.

The good news, according to him, is also that there is no longer as much fear among tourists who reported concerns about coming to Poland just after the war broke out. Now this is gone, and the return of foreign tourists will be crucial, especially from the point of view of Krakow. Here, however, much will also depend on the global economy and the strength of its weakening.

Tourists have to get used to the fact that it will be more expensive. Prices have gone up, and there is no expectation of a decrease throughout 2023. This will result in the continuation of the trend already seen a year ago of cutting trips short and booking them at the last minute.

According to Kaleta, the hotel industry can count the previous year as a successful one. In the first six months of the year, as a result of the war in Ukraine, rooms were full, which no one expected. The vacations were also mostly satisfactory, while business returned to meetings in the second and third quarters, which is cause for optimism for this year.

"Hoteliers are dreaming of pre-pandemic results, although uncertainty makes forecasting difficult. Certainly, however, the experience of previous years has made hotels better prepared financially, if only for increased costs," he pointed out.

The year 2022 was full of surprises for the hotel industry. No one expected that hotels in major cities such as Warsaw, Krakow, Katowice, Wroclaw and Gdansk would fill up in the first and second quarters due to the war across our eastern border. The vacations also brought good results, while the last two quarters were marked by business meetings. Paradoxically, the best month was December, as companies began to apply en masse to hotels for conferences, Christmas Eve meetings and other types of business events.

Cities such as Warsaw, Katowice, Gdansk and Wroclaw came out best on the return of business to hotels. The worst situation still seems to be in Krakow, as due to weaker tourist traffic, especially from abroad, the results are definitely weaker than before the pandemic. However, this does not apply to all hotels. Some hotels, and 5-star ones at that, managed to meet their projected budgets, even with a large surplus.

With the outbreak of war in Ukraine, Rzeszów has joined the ranks of the most important cities in terms of hotels in Poland, becoming a meeting capital for international governmental and non-governmental organizations that are involved in helping Ukraine, according to Kaleta.

Source: CBRE and ISBnews