News Article coronavirus holiday apartments investment Poland Sun & Snow
by Michał Poręcki | Interview

Not surpirngly, the easing of the COVID-19 pandemic has driven up interest in the acquisition of holiday homes. Marcin Dumania, CEO of Polish holiday apartment operator Sun & Snow talked to Property Forum about the holiday apartments industry’s struggles with the pandemic, forecasts for the upcoming months and the company’s investment plans.

What – in your opinion – is the current state of the holiday apartments market in Poland? After almost 1.5 years of pandemic turmoil, it looks like it’s finally catching some breath…

The beginning of the pandemic was indeed very difficult for the whole industry. Especially the period from March to May last year was a moment when the market held its breath and there were very few transactions on the apartments market. Later, however, starting from June last year, the number of transactions increased as much as 1000%, compared to pre-pandemic levels. It seems that many people started to realize that it's worth having a place to go in case of another lockdown. Staying at home, we were confronted with the need to escape and hotels did not prove to be good shelters this time around, unlike our own properties. In terms of sales, this period may even prove to be the best in the history of the entire industry. Although demand is already lower today, it is still higher than in the pre-pandemic period.

How do you assess the so-far results of the vaccination campaign? Another lockdown during the Christmas season and winter break may be fatal for a large number of enterprises in this industry…

I personally hope that the next lockdown, if it happens, will not be as restrictive as the previous ones. This is shown by the example of England, where despite the high number of infections, thanks to the vaccination campaign, we have fewer hospitalizations, which makes the restrictions less difficult. Personally, I am a vaccine supporter and I expect that the policy of individual countries will concentrate on finding optimal solutions that will strengthen the vaccination campaign.

The blockade of the economy or the tourist industry can have far-reaching effects, which in my opinion should be avoided at all costs. We can see it in gastronomy, where there was an outflow of workers, especially experienced staff, which is now very difficult to supplement. In the holiday apartment industry, the pandemic is also forcing changes that will be visible only after some time.

Marcin Dumania

Marcin Dumania

Sun & Snow

Marcin Dumania is the co-founder and CEO of Sun & Snow, a rental management company with a portfolio of over 2 thousand apartments in more than 30 resorts and cities in Poland. He is a graduate of the Warsaw School of Economics in the field of finance and banking. For several years he worked in the largest global consulting companies: Deloitte, A.T. Kearney, Accenture and Roland Berger Strategy Consultants, where he made his way from analyst to partner. He specialized in projects for the banking sector and financial institutions and dealt with the development of strategies concerning, among others, new services and products. In addition to companies operating in Poland, he also supported businesses from the USA, Russia, Austria, Serbia and Slovenia. More »

What is your opinion on how the Polish government helped the pandemic-affected tourism industry? Sufficient or utterly insignificant?

The support was significant. This does not mean, of course, that it covered all losses, but it allowed many companies to survive this difficult time. We have used this moment to carry out many internal activities - such as changes in the reservation system or call centre. Thanks to that, we have a chance to come out of the crisis in a stronger, better shape. On the other hand, it is difficult to assess the government support for the entire industry, because we have signals from many entities that the support was insufficient. Also, the owners of holiday apartments may have completely different experiences in this respect.

How would you assess the current yields on the holiday apartment market?

The pandemic, combined with the drop in interest rates, has made investor and owner expectations of returns very different than they were 5 years ago. A strong group of people emerged for whom the ability to own their own vacation property has proven to be more important than the income from renting it. These individuals look at the profitability of their property through the lens of their own vacation. In fact, many clients buy apartments from us but choose not to rent them out, leaving them solely for their own use. Currently, when observing the trends during the ongoing summer season, one can see very high demand from tourists, which is combined with an increase in prices. If there are no drastic changes in the market, such as restrictions on the operation of leisure infrastructure, the current profitability achieved by owners can be considered satisfactory.

In which locations such investments are still considered safe and profitable?

There is a very strong interest in all coastal investments. Locations such as the Hel Peninsula or Mielno are safe investments and are very popular among investors, as well as tourists. On the other hand, the advantage of mountain resorts is the fact that the season for apartments located there lasts much longer than in other parts of Poland. Looking at the market in terms of changes caused by the pandemic, we can certainly also point out the difficult situation of urban locations. Apartments in large cities such as Kraków are doing much worse than before the pandemic.

What are the holiday hits of this year’s summer? Baltic coast, as always, the mountain resorts, Mazurian lakes or perhaps some other unexpected locations?

At the seaside, we are currently experiencing a boom in family travel. Here, the Hel Peninsula is the absolute leader and reservations are made several months in advance. This year we see that a lot of people have resigned from foreign trips in favour of the rest in the country - which further drives demand. We also see a significant increase in interest in intimate places, which are located a little further from the crowds of tourists. The Mazurian lakes have probably gained the most from this wave, as its popularity is now comparable to that of some seaside resorts.

Is Sun & Snow planning the development of any new resort projects in the nearest future?

We are working on new investments. We want our projects to be distinguished by their convenient locations, so in the case of seaside apartments, we focus on the first line of buildings right next to the beaches. In mountain resorts, on the other hand, we want them to be located in the central areas of the resort. We are currently working on launching about 5 new projects. One of these projects will be in Ustronie Morskie, another in Mielno. We expect these investments to be launched in about six months. In the mountains, we are thinking about one location in Białka Tatrzańska and two in Szklarska Poręba.