Hotel industry jeopardised by wave of bankruptcies: report

As much as 87 percent of hotels in Poland have cash flow problems, while every third facility was forced to cut jobs as a result of the coronavirus pandemic, according to research done by the Chamber of Commerce of the Polish Hotel Industry (IGPH).

Opening hotels at the beginning of May did not bring significantly increased numbers of guests nor a visible boost of a dramatically weak financial condition, even though almost 66 percent of facilities decided to reduce prices, hoping that would help attract guests.

In the period spanning the first three weeks of May, guests constituted no more than 10 percent of a total hotel capacity on average. The forecast for the holiday period does not fill the hoteliers with optimism either. Most facilities in cities and half outside them claim that only 20 percent of rooms have been booked so far for July and August.

City hotels in the worst position

As it stands, hotels in popular holiday destinations have the best prospects: for example in the Baltic coastal town of Kołobrzeg there are already problems with finding vacancies, a similar situation has been observed in Świnoujście. However, everything is dependent on external factors, e.g. the weather and a potential second wave of COVID-19, which would bring a return of the restrictions.

As regards smaller resorts and city hotels, the situation is much worse, especially in large chain hotels, focused mainly on business traffic. As a result, some hotels are still closed.

According to cautious forecasts, this group of hotels can expect more guests in autumn, only if companies start sending employees on business trips and organise meetings and conferences. However, it will still not generate that much of an income in comparison to the period prior to the epidemic.

Looking for a helping hand

Hoteliers are counting on further support from the state, as the current forms of assistance end in June. The IGHP study shows that over 93 percent of hotels took advantage of the solutions offered as part of individual anti-crisis shields. However, only 5.5 percent of hotels rated the government's support positively.

“We are waiting for the meeting scheduled for July 2 with Deputy Prime Minister Jadwiga Emilewicz, at which plans for additional help for the industry will be presented. But we don't know the details yet”, said Marcin Mączyński, IGHP secretary general.

For now, the announced support is a tourist voucher, although it will mainly be available to use in cheaper holiday resorts, e.g. agrotourism, and in holiday resorts.

It has been estimated that it will take two or three years for the industry to return to the results achieved last year. Hotel closures have led to a decrease in revenue for the entire Polish hotel industry from PLN 1 bn to PLN 870 mln during the lockdown period.