Germany’s top-10 hotel cities top 100m overnight stays

Just over 100m overnight stays were recorded in hotels in Germany’s Top 10 tourism cities in 2018, a rise of 5.7% over the preceding year, which itself had seen a rise of 4.6% over 2016. The figures for this year 2019 are expected to show a further rise of 5.6%, according to the latest Hotel Market Report from broker group Dr. Lübke & Kelber.

In its study of the Top-10 cities, the researchers at Dr. Lübke & Kelber found that these cities made up 21.2% of all tourist hotel nights in the country, encompassing 3,075 hotels with 486,769 beds.

The biggest hotel market in Germany by a substantial margin is Berlin, with 33m overnight stays, followed by Munich with 17m overnights. The last of the Top-10 was Leipzig with 3.4m overnight stays. Munich showed the biggest growth (up 9.3%), followed by Nuremberg (8.5%), with the slowest growth in Cologne (up 0.7%).

Four of every ten visitors in the Top-10 cities is from outside Germany (42%). Munich heads the table for foreign visitors (48.9%), followed by Berlin (45.9%) and Frankfurt (44.6%). Foreigners make up the smallest share in Hamburg (24.8%), Dresden (21.1%) and Leipzig (16.1%).

According to Daniela Bense, project manager for Hotels at Dr. Lübke & Kelber, “It is striking how few foreigners proportionally stay overnight in Hamburg, with only one in four visitors coming from outside Germany. This has largely to do with the low level of international trade fair business in the city, but also to do with the very high number of domestic tourists who come to visit the city. The same applies to a certain extent to the Saxony cities of Dresden and Leipzig.

In terms of occupancy rates, Hamburg loses its previous number one ranking to Berlin (61.5%) and Munich  (60.5%), largely because of the above-average expansion of its hotel offering which diluted its occupancy to 59.4%, putting it in third place. Düsseldorf (49.0%) and Stuttgart (50.3%) had the lowest occupancy rates. Bense attributes the low ranking of the two cities to the cyclical nature of their trade fair business, on which they are heavily dependent, with 2018 being a weak year in both cities.

The widely-tracked metric RevPar, or average revenue per room, fell across the chain hotel groups in seven of the ten cities surveyed. In fact, they rose only in Nuremberg, Berlin and Munich. The heaviest falls were in Düsseldorf (down €14.70) and Leipzig (down €11.90). “The falling yields per room almost across the board were due to lower rack rates in combination with barely growing occupancy rates”, said Bense.

Across the Top-10 cities there are currently a further 87,194 beds either opening up, being built, or in the planning phase, to add to the German hotel market in the coming years, representing a further increase in capacity of 17.7%. Hamburg tops the list here with 15,500 extra beds across 36 hotel projects. Düsseldorf will see its capacity rise by 11,300 beds, or nearly 40% of current capacity, making it the fastest grower. By comparison, Dresden (up 6.3%) and Berlin (up 7.5%) are anticipating relatively modest growth.

“Trade conflicts and the uncertain outcome of the Brexit negotiations mean world economic perspectives are clouding over, while further resistance to the growth of short-break city tourism could also put a damper on the hotel market. However, with the hotel industry in the big German cities in pretty good shape, small setbacks or even industry-wide stagnation could be borne, particularly as new hotel projects could be put on ice in the event of a real weakening in the growth cycle” concluded Bense.

For the German market as a whole (i.e. not just the Top-10 analysed above by Dr. Lübke & Kelber), growth in tourism grew for the ninth year in a row, rising 4% to just under 480m overnight stays, according to new figures released by Deka Immobilien Research.

For foreign guests, it rose by 4.5% after 3.7% in the previous year. There were notable gains from Poland (up 13%), Spain (up 9%), Italy and the USA (both up 7%). For domestic residents, the increase in 2018 was 3.9% after 2.5% in the previous year. In the first half of 2019, the number of overnight stays has risen by 3.8% compared to the same period last year.

Hotel occupancy rose by 0.7% nationwide in 2018 to 71.7%. The average room rate increased by 1.8% , resulting in an increase in revenue (RevPAR) of 2.4%.

The transaction volume for hotels fell slightly in 2018 compared to the previous year and reached €3.9 billion. The hotel share in the total investment volume of commercial real estate in Germany was 5% (previous year 6%). For 2019, a hotel investment volume of around €3bn euros is forecast. €1.5 billion euros have so far been invested in the first half of the year, 20% less than in the first six months of 2018.