Hotel reopening to differ vastly across Eastern Europe
 
Hotel reopening to differ vastly across Eastern Europe
23 JUNE 2020 7:28 AM

As Eastern Europe eases COVID-19 restrictions, a growing number of hotels are reopening in hopes that the worst is over, but some countries are poised to do better than others.

WARSAW—For Eastern Europe’s hospitality industry, the COVID-19 pandemic seems to be more tornado than hurricane, severely hitting some countries but sparing others, according to sources.

Reopening hotels might look vastly different for hoteliers in the Czech Republic, Hungary, Poland and Slovenia, sources added.

Already, demand is returning to Polish hotels, but destinations especially popular among non-European visitors such as Budapest, Ljubljana and Prague will likely wait longer before things begin to improve.

“Across the board, Poland is arguably better set for the hotel recovery than some other European countries,” said Agata Janda, head of hotel advisory for Poland at business consultancy JLL. “Poland is predominantly a domestic-driven market. Circa 80% of all hotel guests are Polish. We already observe strong travel. The big winners so far are seaside resorts, where some of the best-located hotels are recording close to full occupancy.”

She said business hotels that have not yet reopened mostly plan to do so in late June or early July.

“Fortunately, most international travel to Poland is mainly from Europe. Consequently, Polish hotels will hopefully see international guests returning sooner rather than later,” Janda added.

That said, the absence of foreign visitors would not go unnoticed for the Polish hospitality industry. In 2019, Poland was visited by a record 21.4 million tourists, according to the Ministry of Tourism.

Marek Skowerski, senior manager at the Warsaw Convention Bureau, said the first tourists to return will be citizens of Poland “interested in taking some time off.”

He added corporate travelers have not entirely stopped booking hotels during the crisis.

Hoteliers have been helped in Poland via government bailout packages, he said.

Janda said the Polish government introduced a set of relief packages under “Financial and Anti-Crisis Shields” that include wage subsidies, loans, preferred financing, guarantees on credit facilities and equity instruments, and exemptions from social security contributions.

“Given the circumstances, it is no surprise that these are oriented towards the end of 2020 and beyond,” Skowerski said. “At the moment, we are working on 127 requests, totaling 255,597 participants for events between 2020 and 2026. The estimated value of roomnights to be generated by these guests is 267 million Polish zlotys ($67.7 million).”

Other markets
Hoteliers in other major Eastern European travel destinations are less optimistic.

Reka Kabdebo, head of sales and business development at the Hotel Clark Budapest, said not even the healthy mindset among Hungarian hoteliers can lessen the impact COVID-19 has had on the national tourism industry, and especially in Budapest.

“Our capital enjoys its tourism demand mostly from international guests, so most of the hotels decided to put operations on halt in March as domestic travel demand could not feed the hotel supply,” Kabdebo said. “As for the outlook, it is likely that in Hungary … the ratio of domestic tourism will significantly grow, while the number of foreign tourists may remain at a moderate level in the second half of the year. Nevertheless, we are positive as Budapest has great potential for a quicker recovery.”

Hungary’s hospitality industry has a heavy dependence on foreign tourists. In 2019, 61 million international visitors came to the country—an increase of 6.5% over 2018—and spent a total 2.3 trillion Hungarian forints ($7.5 billion). A significant portion derive from non-European countries.

Anita Sieber, GM at Budapest’s Stories Hotel, said that while some hotels are opening, expectations in the city are not too high, mostly due to all large events having been postponed or canceled.

“To sum up the current mood, this will neither be our best year nor our strongest summer,” she said. “The countryside is a bit better off, mostly wellness hotels or properties at our bigger lakes, such as Balaton, which already opened at the end of May. (They) are getting quite strong occupancy numbers for July and August, as Hungarians will prefer to travel within the country.”

In Ljubljana, the capital of Slovenia, hoteliers are very aware of a reliance on international visitors.

Martin Lah, GM of the city’s Hotel Galleria, said international guests accounted for 97% of all visitors to his hotel. He said he and his peers remain optimistic.

“Economically speaking, we don’t expect much. In the best scenario (the target is) to cover our operational costs. We are all very aware that the second wave of COVID-19 may appear, and therefore the safety of our future guests and employees is paramount,” Lah said.

In 2019, international visitors to Slovenia totaled 4.7 million, a 6.3% increase over 2018, mostly from other European countries.

Hoteliers in the Czech Republic also are trying to see light at the end of the tunnel, but many admit that is a hard thing to do.

“It’s hard to stay positive when everyone is already talking about the second wave,” said Dominika Kováčová, operations manager at Prague hotel Meetme23.

Kováčová said Prague is the one destination in the country favored by international travelers, while domestic travelers prefer smaller cities such as Český Krumlov and Lipno nad Vltavou, and more isolated regions such as Moravia.

According to figures from the Czech Statistical Office, tourism to the Czech Republic reached an all-time high in 2019, with nearly 22 million guests visiting.

If there are no additional waves of COVID-19, the Confederation of Trade & Tourism of the Czech Republic has forecasted the country’s hospitality industry could hope to recover by April 2021.

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