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Warsaw Hoteliers Continue to Struggle; 49%
Occupancy for First Seven Months of 2003

 
October 2003 - Warsaw reported the largest decline in revenue per available room (revPAR) of any European market tracked by the HotelBenchmark Survey by Deloitte during 2002.   The city finished the year with occupancy at 50 percent (11 percent decline on 2001) and an average room rate of EUR122 (17.9 percent decline on 2001).  Consequently, Warsaw was the only market in Europe to post double-digit declines in both occupancy and average room rate compared to 2001. 

Year-to-August 2003 figures unfortunately show little respite for the city.  Of the 37 markets tracked across Europe on the HotelBenchmark Survey, Warsaw is currently posting the second largest declines in revPAR.  During the first eight months of the year the city has seen revPAR fall by 24 percent to EUR50 compared to the same period in 2002. 
 

Although hotels in Warsaw typically manage to achieve higher average room rates than many other key European cities such as Berlin, Brussels, Copenhagen, Prague and Vienna, the city remains challenged by low occupancy levels. Occupancy currently stands at 49 percent for the first seven months of 2003. 

In addition to global economic conditions, part of the reason that occupancy continues to remain under pressure is due the level of new supply that has entered the market over recent years.  Although 


Hyatt Regency Warsaw
Av Belwederska 23
00-761 Warsaw
Poland
several international hotel chains have operated in the market for a number of years (Meridien, Marriott, Accor and Starwood), historically the market has been dominated by domestic operators (Orbis and Syrena). 

However, given the strengthening of Warsaw's position as the commercial hub of Poland and the level of investment in the city's infrastructure over recent years, including the opening of the city's largest conference centre in May 2002, it is perhaps not surprising that Warsaw continues to attract hotel investment.   International hotel operators that have recently opened in the market include, the 250-room Hyatt Regency and the 309-room Radisson SAS - both of which opened in 2002 - and the 366-room Westin which opened earlier this year.  Future openings include the 226-room Courtyard by Marriott scheduled to open this month and the 329-room InterContinental Warsaw scheduled to open in November. 

So what of the future?  Although international tourist arrivals to Poland have declined for the last five years, the Institute of Tourism expect that some markets will start to show some level of improvement in 2003 and 2004.  However, it is not until 2007, that tourist arrivals are expected to return to the levels achieved in 2001.   Economic data however is slightly more encouraging.  Latest figures from the Economist Intelligence Unit (EIU) forecast that Poland's GDP will increase by 3.1 percent 2003, compared to the 1.4 percent growth achieved in 2002.   To set this in context of the EU, which Poland plans to join next year - EU GDP is forecast to increase by just 0.7 percent in 2003 and 1.9 percent in 2004.   Despite improvements in the economic environment, increased investment in Warsaw's infrastructure and efforts by the city to increase its profile, as an international conference and exhibition destination the reality however is that in the short-term, supply is likely to continue to outstrip demand. 

Note:  all analysis in Euros.

The HotelBenchmark Survey contains the largest independent source of hotel performance data outside of North America and tracks the performance of over 6,000 hotels and 1.1 million rooms every month. Four regional monthly rate and occupancy reports are produced covering Asia Pacific, Caribbean and Latin America, Europe and the Middle East & Africa. These are supplemented by country reports for Australia, Belgium & The Netherlands, Germany, Italy, New Zealand, South Africa, the UK and a city survey for London. Annual profitability surveys are run across all regions of the world, whilst in Germany and London monthly profitability surveys are conducted.


 
Contact:

HotelBenchmark Survey
Mikael Sundaeus
[email protected]
+44 20 7007 1445.
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Also See: The 12 Euro-zone Countries Improve Average Room Rates During 2002 / Deloitte & Touche / Feb 2003
Half-year Results for the Middle East and Africa Hotel Markets Indicate Occupancy Levels Dropping by 8%, to just 54% / HotelBenchmark / Aug 2003
International Occupancy and Rate Report / April 2003 Summary Report / Deloitte & Touche / July 2003
International Occupancy and Rate Report / March 2003 / Deloitte & Touche / May 2003
South African Hotel Performance Continues to Improve / Deloitte & Touche / May 2003
Germany: Hotel Profits Tumble as Economic Conditions Worsen / Mar 2003
Performance of Key New Zealand Hotel Markets for January 2001 / March 2001


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