Gradual Polish Growth

Although Poland was not spared from a slowdown in 2008 and 2009, with the economic crisis curbing the imbalances that had been growing since 2006, recent figures reveal steady growth for the hotel industry, mirroring better economic performances.

The Polish hotel industry is well and truly on the upturn, with RevPAR growth in September reaching 5% and stabilising for year-to-date.

“These results verify Poland’s better economic performance during the downturn, as we know RevPAR usually follows a similar trend to GDP growth. Indeed, the country recorded the best GDP growth performance among OECD countries in 2009,” states Director of Development, MKG Hospitality, Vanguelis Panayotis.

According to MKG Hospitality’s market monitoring benchmark HotelCompSet, RevPAR in Poland has progressively increased month-on-month since March this year. This was mainly driven by a swing in demand, with occupancy increasing by over 8 percentage points in September and over 7 points for yearto-date. The last three months, July to September showing most promise.

Not surprisingly, traditional leisure and business hubs Warsaw and Krakow are best performing. The capital is particular strong, with RevPAR growths of 24% in August, 15% in September and over 7% for year-to-date. In fact, Warsaw manages to record an increase in ADR over recent months, at 3% in August and over 4% in September. The upscale segment is also showing greatest recovery, with almost 12% RevPAR growth in September alone, and over 6% for year-to-date, further verifying a return in corporate and leisure spending. “These are good signs that things are recovering and returning to normal, albeit slowly. First, that there are better results in the upscale segment. And then, that the hotel cycle is moving into the next stage. Once occupancy stabilises and then begins to increase, hoteliers can afford to start increasing their rates and boost RevPAR,” added Panayotis.

These trends were further verified by local industry, as Starwood Hotels & Resorts Area Manager for Poland, Thomas Schoen explains: “Definitely 2010 is an interesting year. It started pessimistic due to the volcano eruption. Slowly but constantly the market situation improved. This was especially seen after the summer, when the entire hospitality market in Poland noticed an improvement. I am optimistic about our market in the future and think Q1 2011 will confirm what trend we can expect for the rest of the year.”

“The business environment is changing and heading in the right direction. This positive trend will be supported with major upcoming events, namely EU presidency in 2011 and the UEFA championships in 2012. Both events will be very beneficial for Poland in terms of brand awareness and in influencing future traffic,” adds Schoen.

Revenue Manager, Start hotel chain, Marta Hancock says hotels dropped their rates for the wholesale market in order to stimulate base demand, which did not help ADR much. “We see more activity starting in the MICE segment, which helps build up high occupancy, as well as the growing impact of internet sale (OTA’s). A positive change in ADR is only visible the last three months. We are expecting (continued) growth in terms of occupancy, which will come from business clientele and from Internet sale, with quite a modest grow in ADR.”

According to Head of Corporate Communications, Vienna International Hotel management, Elisabeth Scheiring, good economic growth, mainly from private consumption and new investments will drive tourism growth, and especially the MICE segment. This will be supported by the EU presidency in 2011. This is further verified by forecasts from the Institute of Tourism, with the total number of inbound arrivals predicted to continue rising, from 11.9 million in 2009, 12.3 million in 2010 and to 12.7 million in 2011 – and at the same time, only modest growth in supply/competition.

“In general we believe our performance in 2011 will increase by 8% to 10%. With an increase in tourism arrival, on-going marketing actions, renewed infrastructures and a higher recognition of Poland worldwide as a business and tourism destination we believe in a positive future,” states Scheiring. “This year, Krakow was especially strong with the FIT segment. In Warsaw, key drivers of performance in the last few months were a mix of corporate, individual and leisure groups.”

“Group Business has increased in terms of volume, as has FIT (leisure), corporate, negotiated (local company rate), MICE and all various Internet portals, including our own booking engine, but overall prices are still very competitive and comparable to last year (2009),” confirms General Manager, Polonia Palace Hotel, Alexander Huschka. «Regarding nationality mix, the previous few months have shown a remarkable increase in room nights from Germany, the UK, North America and Scandinavia. The Polish market has developed over proportional during the last 12 months and this will be driven even more, due to Poland’s presidency of the EU in the second part of 2011».

Warsaw, Oslo, Stockholm go SIG

HSMAI’s European division faces a busy month with one-day conferences on SIG’s (Special Interest Groups) in the capitals of Poland, Norway and Sweden this November, with a golden opportunity to revive the Swedish chapter, as well as the chartering of a chapter in Poland.

In addition to an introduction to the SIG concept, all conferences will offer a walk-through of HSMAI’s Revenue Management programme.

HSMAI global’s president and CEO Mr. Robert A. Gilbert will give an introduction at the Oslo and Stockholm conferences, whereas Mr. Tomasz Janczak gives same at the Warsaw conference, taking place at the Warsaw Hilton.

All conferences also feature Ms. Marion Hughes’ insights in Revenue Management. She currently makes her home in New York City as Vice President, Business Development for Intelligent Hotels, a global leader who have developed and deployed intelligent revenue strategies for a wide range of hotel groups, including Leading Hotels of the World, Preferred Hotels and Resorts, Small Luxury Hotels of the World, Loews Hotels, Le Meridien, Relais & Chateaux, Millennium Hotels and Resorts, Capella Hotels, Holiday Inns, Ramada Hotels, Choice Hotels, Marriott, Hilton International, and Mexicos Grupo Posadas.

Marion has worked for a European luxury hotel group managing sales and marketing for 6 of their hotels and overseeing 14 sales executives. She has extensive experience from working in online distribution and has held a global marketing role in a key European Travelocity business unit.

The conferences will be opened by HSMAI Europe’s CEO and president Ms. Ingunn Hofseth, also CEO and president of HSMAI Chapter Norway.

The participant fees in Warsaw include one year’s HSMAI membership, with access to the SIG’s in question – as well as future SIG’s and other HSMAI activities and benefits (the article continues below video clip).

The conferences take place in the Warsaw Hilton 17 November, Oslo Conference Centre 18 November and the Clarion Hotel Stockholm 19 November.

The Oslo conference also features the launch of SIG’s within the following fields of interest:

• Revenue Management
• Resort Marketing
• Travel Internet Marketing
• Environmentally Sustainable Travel-Business

As Norway already has a fully operational chapter, participants are also offered an introduction to theme-based adventures, by Innovation Norway’s travel director Mr. Per-Arne Tuftin. The Travel Internet Marketing session is conducted by journalist and social media specialist Ms. Ingeborg Volan of Sermo Consulting.

Register now!

Please read further details – and register – on these pages:

• The Warsaw conference (PDF)
• The Oslo Conference (web page in Norwegian)
• The Stockholm conference (PDF)

Downturn good for expansion

The Polish hospitality magazine Hotel Profit just announced its plans of expansion. From September 2009 it will be available also in English, and published in the entire CEE region.

For the last four years this hospitality B2B monthly was focused only on the Polish market, which is reasonably big, in an Eastern Europe scale, but the aim was to create media addressing issues of importance for the entire region, according to a press release issued by the company today.

One good example is VAT value, which is now lower than EU stipulated by regulation, and has to be increased during the next few months, which would certainly not help hoteliers in these difficult times. The best example is Lithuania, where the Government increased VAT from five percent to 19, causing serious problems for the domestic hospitality industry.

Poland is currently on the same track, and although the Ministry of Treasury declared there will be no change in VAT this year, there is widespread fear for 2010, as the change would be rather big, from current seven percent to 22.

Thanks to its partnership with renowned institutions, such as the Cornell Center for Hospitality Research, Hospitality Financial & Technology Professionals, STR Global or International Spa Association, Hotel Profit is able to offer the highest class know-how, resources and professionalism.

Starting with September issue, Hotel Profit CEE will be distributed on-line to about 1500 professionals from Central Eastern Europe. After reaching a reasonable amount of subscribers, a printed, paid version of the magazine will be made available, too.

“The first idea about new opportunity came during last year’s International Hotel Conference in Rome,” recollects Daniel Lukaszewicz, Managing Director and co-founder of Concept Media, the publisher of Hotel Profit CEE. “We were talking to hospitality professionals and a lot of them were asking about the publication, which would cover hotel management related issues in the area,” he says in today’s press release.

Initially Hotel Profit CEE will be available in a digital flip-version, free of charge.

“We decided to go for an on-line publication, as it is more effective, easier to use and quickly delivered,” explains Dagmara Ziemiaszewska, Hotel Profit CEE’s editor-in-chief. “We hope to gain a reasonable amount of subscribers within a few months before preparing a printed version,” she adds.

What we already know for sure, is that part of the October edition will be printed, as Hotel Profit CEE will attend the International Hotel Conference in Venice, which the magazine is sponsoring. Magazine representatives will also take part in one of the discussion panels, focused on investment opportunities in the region’s hospitality business.

Concept Media, the Hotel Profit CEE publisher, also organises conferences and seminars addressing the Polish hospitality industry, but also considers organising an investment conference: Hospitality in Central Eastern Europe, which would be logical continuation of the company’s magazine expansion in new markets.

Polish certified Spa pros

On Tuesday 23 June the first Polish spa professionals were awarded with the Certificate of Spa Supervision, awarded by the International Spa Association (USA). This certificate confirms the knowledge in Spa Supervision and at the same time opens the doors to a new career path.

There was a lot a lot of interest in ISPA courses in Poland, but there were also fears about language abilities and culture differences between USA and the Polish spa market, but according to the suggestion of the graduates, it was not so hard, and general rules about spa business are very similar to those followed in Poland.

“I am very proud to be among seven spa professionals who received the ISPA CSS Certificate in our Country,” says Jolanta Lukasik from Thalgo Poland, continuing “It is a great honour for us, but also gives very good experience in our career, and I think I will come back to the books very often.”

“With this certificate my chances on the labour market should grow very fast,” says Beata Kepinska hopefully. Up until now she’s had no experience in the spa industry, but, she adds, “During my last interviews I mentioned my positive results with ISPA, and it seems this information could be the key.”

The spa business is one of very few to develop rapidly, in spite of the financial slow-down. New spas are emerging very fast, but the personnel training still needs improvement, which is why Concept Media, the Polish International Spa Association partner, decided to introduce ISPA courses in Poland. In addition to Certified Spa Supervisor, Polish professionals can also improve their know-how in Spa sales & marketing. Concept Media also promotes ISPA membership for Polish hotels and spa venues, as a great information source and first quality educational opportunity.

The first Polish ISPA course was supported by Thalgo Poland, as this market leader was also the first to acknowledge the importance of high-class education in the spa business.

The second round of ISPA exams is scheduled for December 2009.

Based on a press release from Concept Media.

Top photo: Polish ISPA graduates, summer 2009.

Polish growth is slowing down

… But still above zero.

According to the data from the Main Statistical Office, Polish economy is still growing and is one of very few green spots on the map of Europe (hence the above colourisation), the economic situation considered.

This trend is also confirmed by the hoteliers, who even report growth year-over-year.

We asked several owners and operators what could possibly be the cause of this “strange” situation, compared to the rest of the market.

In most cases the answers were rather complex, but there were several factors repeated by most of our respondents, among which were:

• The Polish economy was not severely affected by financial crisis
• The Polish currency exchange rate dropped, rendering our country more attractive to foreign travellers
• A relatively strong domestic travel market
• Availability of EU funds for training, usually organized in hotels

Looking at the hospitality investment market, we notice a remarkable slow-down, mainly related to limitations in financing, as loan action in still “on-hold” in most financing institutions. In spite of that, however, we observe new hotels opening their doors for guests.

Last week two four-star hotels opened: one in Lodz (Central Poland) and one in Gdansk (Northern Poland).  Both of chain hotels, but you can also see activity from independent investors trying to explore new opportunities in the condo hotel market.

There are also several big projects on way, such as the Hilton Garden Inn and the Sheraton Lake Resort.

There is one very meaningful factor, which can push investors to be more active on the Polish hospitality market. At the moment Poland has average an average of five hotel rooms per 1000 inhabitants, while European the average is above 20 rooms per 1000.

To summarise there is still a lot to do, and the best time to start is now, for those interested in preparing for the summer of 2012, when Poland, together with Ukraine,  is to host the European Football Championship.

Be more effective in sales – and get ready for tough times

The first reaction to a difficult market situation is cost-reduction, and the first area, where management usually wants to cut is the training and development budget.

Looking back at Q3 last year I remember a lot of discussion on which way the business was headed and whether the rule of savings on education would be confirmed once more.

What actually happened? Hoteliers want to learn, especially how to sell more, how to be more profitable and optimize costs, which I find very encouraging.

There is still a lot to do in the area of sales and marketing techniques, analysing effects and forecasting. The Polish hospitality market is not matured yet, and there is still a huge potential in better usage of on-line marketing tools and revenue management strategies.

Of course, if there is a demand, businesses will be established in response, but the question is if the available educational opportunities are reasonable and give hoteliers the expected volume of know-how.

Different instructors, different subjects, different levels of quality and hoteliers can take their decision based on their feelings and experience. Therefore, establishing a structure which could offer high-quality education programmes, standardised and based on international independent organisations are really necessary, which is where I see a part to play for associations such as HSMAI.

The question is what the members can get for their membership fee, and how the association’s programme fit local conditions. Surely there is a gap on the market, the very potential market, and the first organisation deciding to invest here will be successful and can treat Poland as its footprint in CEE region.

Taking the current situation on the market into consideration, as well as the positive climate for personnel development, the time is now, as Polish hoteliers need the know-how and a way to survive in more challenging times.