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German Hotels Get Their Revenues Back

News Hotels in Berlin, Hamburg, and Frankfurt slowly feature signs of recovery, but this concerns mostly economy hotels, while luxury accommodations have to face lower occupancy rates. This data has been published by HVS London. The only German city, where hotels in the luxury segment also feature signs of recovery, is Munich.

Hotels in Germany have finally reached growth of RevPAR, and this figure is mostly driven by the growth of occupancy. Economy hotels do serve more guests, but the occupancy of luxury hotels remains not so optimistic. Luxury hotels in Munich are the only exception as they have a strong base of corporate and international visitors. Despite all the troubles, both luxury and economy hotels in Germany feature the growth of RevPAR, helping Germany to maintain its status of the fastest developing economy of Germany.

In 2012 the length of stays of both international and domestic travellers increased in Berlin, Hamburg, Frankfurt, and Munich. However, luxury hotels were not able to increase their rates sufficiently. This fact prevents them from increasing their revenues. For example, current occupancy level in Berlin is approximately 70% in economy and luxury segment. However, if rates of economy hotels are growing, the rates of luxury hotels in Berlin are far below the rates of premium hotels in Amsterdam.

Currently, Munich attracts approximately 5.9 million visitors a year. In 2011 the city was visited by 6.4% more visitors. There is a vivid growth of supply in Munich, but it primarily concerns the economy sector. In 2011 1,700 new rooms were added to economy hotels in Munich. At the same time, Munich’s luxury market doesn’t have new supply, and this is one of the main reasons why rates grow in this segment. The growth estimated 8.6% during first 6 months of 2012 and reached to €125 (US$159.71).

The overall prospect for the hotel market of Germany is very positive. It is a popular market for various conferences, exhibitions, and meetings, and experts forecast the growth of international tourist arrivals, and, therefore, the growth of revenues of both economy and luxury hotels.


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