HOLIDAYS PRECEDE HIGH PRICES

This summer is the first holiday season after the pandemic’s start when many European countries lifted or at least loosened pandemic-related restrictions. After a two-year break, Poles are hungry for international trips and many are willing to go despite rising airline ticket prices, inflation and uncertainty due to the war in Ukraine. As many as 40% of Poles plan at least a seven-day holiday abroad this year, according to a survey published by a travel portal Wakacje.pl. The most popular destinations for this summer season are Turkey, Greece, and Egypt, followed by Spain, Tunisia, Cyprus, and Bulgaria, the portal reported based on sales results as of the end of March.

Travel agencies say that double-digit inflation does not stop Poles from planning long-awaited vacations and can even encourage them to go abroad as domestic prices rise. “Inflation hurts Poles, but we can see that they have savings and will spend them on vacation,” Marcin Dymnicki, president of the tour operator TUI Poland told in an interview with Business Insider. People had to delay traveling during the pandemic, and now, when they finally can go, they prefer to save on something else to deal with rising living costs. In addition, inflation makes holidays in Poland less affordable. “Holidays in Bulgaria are cheaper than in an apartment in Sopot, and good weather is guaranteed there [in Bulgaria],” he said. But finding an inexpensive tour or an attractive special offer is a challenging task this year. Prices jumped compared to 2021, driven by fuel prices, inflation and weak złoty (PLN), Piotr Henicz, vice president of Itaka travel agency and deputy head of the Polish Chamber of Tourism told Warsaw Business Journal.

In May, the złoty slightly recovered to PLN 4.6 versus the euro after Poland’s central bank increased the interest rate, now at 5.25%, for the eighth time in a row. However, this is still much lower compared to a pre-pandemic range of PLN 4-4.5. In addition, airlines face rising CO2 emission allowance costs that add up to an increase in ticket prices. According to the European Commission, environmental regulations aimed at cutting aviation’s carbon footprint will increase the cost of flying by around 8% by 2050.

The war in Ukraine cooled down Poles’ enthusiasm for foreign trips and caused a drastic drop in bookings in the first weeks after the outbreak, Henicz said. However, ahead of the holiday season sales improved. “Many Poles still feel the hunger for travel caused by the lockdown, or the will to catch up for holidays that they could not go on a year or two ago,” Henicz added.

According to him, the majority of Itaka clients choose charter destinations with attractive quality-price ratios and a wide range of extra options, such as an all-inclusive meal plan, excursions and insurance. Apart from popular Greece, Spain and Italy, Poles spend their vacations in exotic islands, such as the Dominican Republic, Zanzibar, the Maldives and Cape Verde. In addition, Poles have begun more actively tailoring their holidays to specific needs, choosing, for example, family hotels, or, on the contrary, adults-friendly hotels.

Airlines eye hot holiday season

The airlines are gradually restoring passenger traffic after the pandemic hit. Warsaw’s Chopin Airport, the largest airport in Poland, handled nearly 3 million passengers in the first four months of this year. According to airport spokesperson Anna Dermont, aviation is recovering more quickly than expected. “The May weekend and the number of travelers who chose to fly these days are a signal that the upcoming holiday season may be really successful for the industry,” she said in a statement. In May, the largest private airline in Poland, Enter Air, signed a $125.8 million charter agreement with TUI for Summer 2022 and Winter 2022/2023 seasons. Under the deal, Enter Air will operate more than 80 routes, from Iceland and Portugal to Zanzibar and Cape Verde.

Meanwhile, Poznań airport handled in April more than 155,500 passengers, slightly less compared to April 2019. Poles have clearly returned to traveling abroad, and thanks to the rich offer of flights, the holiday season looks promising. At the same time, the popularity of flights from other countries to Poland is declining. “Due to the war in Ukraine, incoming tourism has slowed down slightly,” the airport spokesperson Błażej Patryn said, adding that Kraków, which usually hosts 10 million tourists annually, will be affected.

Hotels in Poland struggle

As Poles eagerly book their international holidays, hotels in the country struggle with lower booking rates. Easter and the May weekend had weaker occupancy than in previous years, according to a survey of the Chamber of Commerce of the Polish Hotel Industry. In April, only slightly more than half of hotels had occupancy above 50%, while almost one-fifth had less than 30% occupancy rate.

The forecasts for July are weak and this raises concerns that, similar to the May weekend, the holiday season in Poland will be weaker than a year ago, the Chamber said in a statement. Despite lower demand, many hotels keep increasing prices due to rising costs of labor and energy. As many as 80% say their prices are higher than last year and one-third admitted that the difference is more than 20%. Nearly two-thirds of hotels have occupancy below 30% for the summer months and hope for last-minute reservations.

Itaka included domestic holiday offers in its portfolio during the lockdown period. For this summer season, the demand is higher compared to a year ago, but for foreign destinations sales growth is much stronger, Henicz emphasized. “Of course, domestic holidays have many avid fans, but the competition from foreign offers is fierce,” he added.