Travel and Tourism in Poland

Abstract

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Product coverage

Airline capacity and utilisation; Arrivals by country of origin; Arrivals by mode of transport; Arrivals by purpose of visit; Car rental services by sector; Demand factors; Departures by destination; Departures by mode of transport; Departures by purpose of visit; Domestic tourism by destination; Domestic tourism by mode of transport; Tourism receipts and expenditure; Tourist attractions; Transportation; Travel accommodation; Travel retail services

Executive summary

Second year of positive growth for the travel and tourism market

2005 was a second year of positive growth for the Polish travel and tourism industry, following the 2000-2003 recession and first signs of recovery in 2004.

This growth was mainly underpinned by Poland' s accession to the EU in May 2004, which has created numerous positive social and economic developments.

Another contributory factor was economic growth, which underpinned investments mainly in the accommodation sector. However, an inadequate tourism promotion still hampers further developments in this sector.

The ongoing social and economic integration of Poland into the EU results in the westernisation of Poland' s travel and tourism market as well as consumer habits and preferences. This affects both incoming and outgoing tourism and destinations.

Incoming tourism -- main growth driver on Polish market

2005 saw a significant development of incoming tourism in Poland. However, it relates mainly to travellers from Western Europe and overseas countries. The market experienced a significant growth in volume terms especially when it comes to tourists from main inbound countries such as Germany. In some cases the dynamics of incoming tourists from Western European countries even exceeded 50%. On the other hand, arrivals from the East show a slight declining trend.

The positive tendencies in incoming tourism emerged despite of the fact that Poland does not belong to typical European tourist countries. However, it offers variety of attractions, such as interesting historic sites, city attractions and diversified, unspoiled nature (mountains, Baltic See, lakes etc.). Additionally, central geographical location of Poland and favourable price-quality relation of products and services contribute to attract a growing number of tourists which start to perceive this country as an interesting tourist destination.

The interest in the country abroad was even boosted by the increasing liaisons of Poles with Western Europeans, intensified business contacts and a clear trend to visit a country, which recently became the new member of EU.

Impressive development of air transportation

The development of air transportation in Poland was unparalleled in European terms in 2005. It does, however, concern international flights, with growth in volume comparable only with the Chinese market. It may be described as the awakening of the travel potential, which was previously hampered by expensive flight tickets. Fierce competition among the low-cost carriers has resulted in extremely high growth in air transport both in incoming and outgoing tourism. The boom in passengers at Poland' s regional airports has boosted their speedy development following strong investments.

Nevertheless, land still remains the dominant method of transport, albeit with a declining share. Rail, as a traditional means of transportation, is in decline mainly due to the inflexibility of Poland' s rail system in terms of its competitiveness vis-à-vis other means of transportation.

Internet rapidly gaining importance as a modern distribution channel

In terms of modern distribution, transactions via the Internet continuously grew in importance, particularly for sales of air tickets and hotel bookings. In line with the dynamic development of Internet travel companies, traditional operators have also started to introduce Internet services. This positive trend is expected to continue over the forecast period.

The performance of Internet sales is strongly connected to the growing number of Internet users, falling prices of Internet connections and higher quality networks which all result in a growing number of potential clients for the travel and tourism market.

Subsidiaries of global operators rule the market

A breakdown of operators varies according to a particular area of the travel and tourism market. In air transportation Polish national carrier PLL LOT introduced a new strategy to try to maintain its share against the expansion of the low-cost carriers. Apart from cuts on costs and improvements in customer service, it has established its own low-cost subsidiary in order to be more efficient in the international air market.

The travel retail sector underwent dynamic restructuring, which has resulted in the liquidation of numerous less competitive operators. The ones remaining in the market offer a much higher quality service and are more competitive in terms of differentiated offer and affordable pricing.

All other sectors of the travel and tourism market are strongly dominated by global operators, which have created subsidiaries or act through licensees. It is especially evident in car rental, travel retail and accommodation. However, in the hotel market international chain operators face fierce competition from numerous private hotels, which are located in the larger cities, along main roads and in interesting countryside locations.

Optimistic forecasts thanks to economic growth

The positive trends in Poland' s travel and tourism market are expected to continue over the forecast period. The development is strictly related to further GDP growth, which is estimated to reach approximately 4-5% annually over the next few years. The most optimistic forecast concerns inbound tourism, especially in terms of Western European visitors. Outgoing tourism is set to develop at a slightly slower pace, which is due to the limited disposable incomes of Poles. The negative trend in domestic tourism is about to cease and to show the first visible signs of growth.

Air transportation is expected to continue to grow strongly, boosted by the addition of new international routes, together with the gradual development in domestic connections. The situation in land transportation is heavily influenced by the poor condition of the road infrastructure, which is currently the main detrimental factor hampering the further development of this sector.