The budget and economy hotel sector, which operates under international hotel chains in Poland is set to grow by over 50% over the next two years, in developments highlighted at the 3rd Annual hotel real estate investment conference in Poland. The growth was the focus of discussions during a panel session, hosted by Janusz Mitulski; Partner at Horwath HTL Poland entitled “Business Economy Hotels – New Trends”. Janusz was joined by Rune Askevold, President of the Management Board, Puro Hotels, Jim Murphy, CEO, PREM Group, David Heijligers, Development Manager, Louvre Hotels Group in Poland and Krzysztof Potocki, President of the Board, B&B Hotels.

The group looked at the impact that a new breed of budget and economy hotels operating under international hotel brands, would have on the market place. In purely supply terms, the hotel sector of branded hotels would be growing from 29 hotels with 3,816 rooms to 45 hotels with 5,971 rooms an increase of 64%. Horwath HTL Poland predicted that even bigger growth could be achieved, as announcements for new hotel development in those segments is expected.

However, the discussion was not only confined to pure growth numbers, which given the potential size of the market in Poland was not considered by the panel to be have a damaging effect on occupancy, but the style of these new hotels and the amenities that they offer. The greatest potential for these new hotels, and subsequently the greatest threat to existing hotel supply, lay in the modern amenities, like wireless Internet access, that these new hotels would feature. Something that older budget and economy hotels would struggle to compete with.

Janusz Mitulski said, “We believe that it is positive for the Polish hotel market in general that these new kinds of budget and economy hotels are being built, and that this shows real confidence by developers and international chains in the potential for growth. Poland has lagged behind other European countries in internationally branded hotels and especially these new kinds of budget and economy hotels that have excellent amenities and modern design. These are the kinds of hotels that modern travellers have come to expect and there is a huge potential for these hotels to pick up a latent demand in the market. On the face of it, such a large percentage increase could be detrimental to occupancy levels, but as the branded hotel supply is relatively low, we believe that there is elasticity in the market to absorb the new rooms.”