As property prices in Poland stabilise at their lowest levels since 2007, foreign visitors to Krakow will inevitably be tempted by the idea of a real estate investment in a highly attractive location at prices well below those back home.
The number of tourists visiting the city continues to rise, as does the demand for short-term accommodation. Krakow has representatives of the large-scale, international hotel chains and a sprinkling of boutique hotels, but the bulk of the city’s tourist accommodation is in the form of holiday apartments – residential flats rented out for a few days or weeks.
Putting these two factors together suggests that investing in property for vacation rentals may be a shrewd move. The Krakow Post spoke to Mikołaj Gorecki, owner and CEO of holiday apartment firm Krakow For You, about the ins and outs of the business.
“Right now, it’s a great business to be in,” says Gorecki. “Krakow For You cooperates with two other vacation rental companies, which means we have more than 100 apartments available in the Old Town, Kazimerz and just outside the Planty.
Krakow Post: What level of occupancy do your apartments achieve?
Mikołaj Gorecki: It’s pretty high. About 70 to 90 percent. To cover costs, we only need to achieve about 30 percent occupancy. Of course, some locations are move saleable than others. Properties in the Old Town as close as possible to the Market Square are the most popular, but demand is such that apartments further out still achieve good rates. The reduced VAT rate for tourism activities in Poland helps a lot. Businesses operating in the tourism sector pay only 8 percent VAT, everybody else pays 23 percent. If you go through the necessary procedures with the Polish Tourism Office, as we have, you can officially use the ‘Polska’ tourism trademark, which helps a lot too.
KP: What kind of apartments are best for vacation rentals?
MG: Bigger apartments are better in terms of profit. There is quite a lot of demand for large apartments that can accommodate whole families or groups travelling together. Even when a large apartment is not being occupied by a large group, you can still rent it to just one or two people and still cover costs. Unfortunately, large apartments are very hard to find in the Old Town. The majority of them were broken up into smaller flats during the Communist era. At Krakow For You, we have everything from studio apartments for one or two people to very large apartments for 10 to 12 people.
KP: What are your main client groups?
MG: The great majority of tourists who come to Krakow are Polish, and they also make up the majority of our clients. After that, the pattern reflects the overall pattern of tourism in Krakow – British visitors, Germans, Scandinavians, Italians and Spanish. All of these groups have quickly learned that vacation apartments are the best value for money and offer many advantages that hotels don’t. They appreciate the greater freedom and privacy. A lot of our vistors are family groups, but we also serve many business travellers. Long stays are often executives who work in outlying business centres but who want to live in the heart of the city.
KP: How long does the typical visitor stay?
MG: Most people come for short breaks of a few days, but there is also demand for longer term rentals. There is lots of demand for accommodation for people attending weddings – Polish weddings in beautiful Krakow have become very fashionable. Again, this is one reason it is good to be able to offer large apartments for family groups. We are also seeing growing demand from people coming to Poland looking for jobs – they often base themselves in Krakow for a few weeks as they attend interviews all over the country. Foreign students on Erasmus courses are also good customers – they tend to have more money than Polish students and are looking for good quality accommodation for several months at a time.
KP: Why did you decide to get into the vacation rental business rather than opening a hotel?
MG: Apart from the business advantages, I genuinely believe holiday apartments are a better way to stay in a city. I think they will become more and more popular because they offer a much more intimate experience than the chain hotels can. Living in an apartment that is part of the historical fabric of Krakow gives you a much better understanding of how the city works and how local people live, with all the advantages and disadvantages. It’s also much more private than staying in a hotel, where you always have the feeling that the cleaners or the management might poke their noses into your room at any time. Our slogan is ‘Feel at home while you are away’ because that’s exactly the feeling that a holiday apartment provides.