Growth Engine Germany

The growth of overnight hotel stays in Germany was stronger in 2015 than the average over the course of five years. On the one hand, the significant portion of international guests were jointly responsible for this positive development with their overnight stays rising by 5 percent to 79 million with relation to the previous year. Inland tourism has also shown a positive development. Here, overnight stays have increased by 2% to 357 million. Although the total volume of foreign guests has disproportionately risen, this proportion still does not amount to any more than 18% of the total volume.

As depicted in the following graphic, Asian source markets show the strongest growth rates; first and foremost, guests from China (+ 26%), Taiwan (+ 27%) and the countries at the Arabian Gulf States (+ 18%).



The growth of overnight stay figures has been particularly fast-paced in the largest of German hotel markets. The overnight stay figures in Berlin (+5.4 %), Munich (+4.6 %) and Hamburg (+4.8 %) have outstandingly risen. Despite a higher number of beds, this leads to improved occupancy as well as to an increase in average prices.



Over recent years, within the scope of Germany’s largest hotel markets, there’s been a considerable run of investors for hotel real estate properties. Last year, the transactions market grew to almost EUR 4.5 billion (source: Colliers); almost 2/3 of that was invested into the top seven hotel locations. The hotel real estate market is almost completely dried out and there is not exactly a numerous amount of freely available and promising products on the market. Last but not least, investor focus has moved toward secondary destinations due to this. This is resulted in a considerable increase in sales prices, which are (have to be) frequently passed on by investors in the form of higher leases. Should the obtainable average room prices not increase to the same extent as the average obtainable leases per room, it can be expected that several leaseholders will be subject to pressure in the coming years and not be able to fulfill their lease agreements to the extent originally expected.

The operationally managed hotel landscape has changed considerably over the course of recent years. Seeing that lease agreements are still the dominating type of contract in the hotel real estate market in Germany and in view of international brands not in fact offering lease agreements anymore, a rapidly growing market of leasing companies has formed that have brought along international brands via franchise agreements. These are capable of offering the owner and the financing banks the required securities/guarantees as well as fulfill the quality requirements for franchise agreements with attractive Brand

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