Poland’s hotel sector is picking up pace: capital returns as conversions rise

For years, Poland’s hotel sector rarely sat at the centre of investors’ attention. It was perceived as too dependent on seasonality and less liquid than offices or logistics. Today, that perception is clearly changing. Hotel occupancy is rising, operating indicators remain strong, new brands are entering the market, and investors who until recently focused mainly on logistics and offices are increasingly beginning to include hospitality in their strategies.

Operating results for 2025 confirm the sector’s strong position. Across the full year, Poland’s accommodation base hosted 58.9 million tourists, up 11.6% year on year. These guests generated more than 100 million overnight stays, representing a 7.2% increase year on year. Growth in the international visitor segment outpaced that of domestic travellers. Occupancy at branded hotels in the largest urban markets exceeded 70%.

Investors are returning, although product remains limited

In 2025, the transaction market remained smaller in volume than other commercial real estate segments. Five hotel transactions were completed, with a combined value of approximately €65–83 million. At the same time, transaction volume in the first half of the year was already twice as high as a year earlier, indicating a clear upward trend.

What is limiting the scale of the market today is not a lack of investor interest, but rather the limited number of properties available for sale. As Katarzyna Tencza, Transaction Director at Walter Herz, points out, Poland’s hotel market is now far more attractive from an investment perspective than it was three years ago, but it still remains a market where there is less quality product available than capital ready to enter.

Conversions are becoming a new development model

One of the clearest examples of this new approach is the project being delivered by Staycity Group in cooperation with Solida Capital. An office building dating from 2005, located in central Warsaw, is currently undergoing conversion and, once works are completed in 2026, will operate as a 268-key Staycity Aparthotel. This is both the Irish operator’s entry into the Polish market and a model example of a direction increasingly appearing in investors’ strategies: an office building with weaker leasing performance, an established operator and a market with rising hotel demand can together create an economically justified project.

This is not an isolated case. Office buildings with lower occupancy levels are increasingly being analysed for conversion into hotel use. Such projects offer the potential for higher income per square metre than an empty or partially leased office building, while growing tourist and business demand strengthens the fundamentals for these decisions.

As Katarzyna Tencza emphasises, it is precisely office conversions, the growth of aparthotels and the rising importance of the lifestyle segment that are shaping a hotel market landscape in Poland that simply did not exist a few years ago.

New brands and the growth of mixed-use projects

At the same time, new hotel brands are entering the market, particularly in Warsaw, where hospitality projects are increasingly being developed as part of larger mixed-use schemes. The planned AC Hotels property in Port Praski fits well into this trend. A hotel is no longer seen solely as a standalone asset, but increasingly as part of a wider urban concept linked to regeneration and the creation of new city districts.

Warsaw and Kraków remain the main growth markets for new hotel concepts, but the Tri-City also has strong fundamentals. In Katarzyna Tencza’s assessment, these cities now offer everything needed to attract further hotel investment at a level comparable to Western European markets, both from the standpoint of tourism demand and business travel.

Cap rates remain attractive

Prime hotel cap rates in Poland currently range between 6.0% and 7.5%. Compared with other asset classes, this remains an attractive level, especially for investors seeking diversification and higher returns. It is therefore no surprise that funds previously focused exclusively on logistics or offices are beginning to allocate part of their capital to the hotel sector as well.

The key conclusion today is straightforward: Poland’s hotel market is no longer treated as a niche, but is increasingly beginning to function as a fully-fledged investment segment, supported both by improving operating performance and by increasingly mature projects. Aparthotels, conversions and hotels developed within mixed-use schemes are no longer exceptions. They are increasingly becoming the new standard of growth.