hotel report - fairmas · rates bands from last year’s hotel report (june 2014) in order to...
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Hotel Report
In Focus Rate bands – Berlin, Dusseldorf, Munich
Edition October 2015
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Index
Dear readers, 3
August 2015 in comparison to the previous year 4
Fairmas Trendbarometer 8
In Focus 16
Disclaimer 22
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Dear readers,
It was a good September in most destinations. Berlin was even able to prove that the absence of a major
trade fair no longer needs to represent a disaster for the hotel industry when all the opportunities for price
increases are exploited. Given this insight, we ask whether this applies across all categories and how the
price range has actually developed since last year. For this purpose we have, together with the Allgemeine
Hotel & Gastronomie-Zeitung (AHGZ), a newspaper for the German hospitality industry, dug out the room
rates bands from last year’s Hotel Report (June 2014) in order to expand the information and update the
figures. Have there actually been any changes, perhaps even improvements? We investigate this question
in depth in our concise analysis.
Besides this, there is our usual focus on the performance of the month just ended, while we also look
forward into the future. The last quarter of 2015 has arrived – what are hoteliers in the major destinations
expecting for the rest of the year?
Enjoy our Hotel Report and have an interesting read.
The team of Fairmas Hotel Report
(Gabriele Kiessling & Nadine Kilian)
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September 2015 in comparison to the previous year1
A brief overview of hotel performances at selected German destinations:
1 All the figures (daily collected) quoted are comparisons with those for the previous year, rounded to full amounts Source: Fairmas GmbH/STR Global, Data as of 01.10.2015
Berlin
Occ: 90%, ADR: €116, RevPar: €104
September is generally the best month in Berlin.
This year, however, the “InnoTrans” trade show was
missing. It takes place every two years, regularly
generating very high room rates in the city. A fall in
ADR was thus unavoidable. But the much higher
fall that had originally been expected did not occur.
The IFA, HAI and CMS trade fairs, as well as the
Marathon weekend all developed very well. There
was also business group and conference sector
trade. The large number of smaller events in the
city should not be underestimated, either. These
included the Pyronale, the EUROBASKET (at the
beginning of September), the “Lollapalooza Festi-
val Tempelhof” (12 to 13 September 2015), as well
as two “U2” concerts (on 24 and 25 September),
and a variety of smaller congresses. So there was
a lot going on in Berlin in September. Thus, it was
no surprise that occupancy could be increased by
almost 4%, despite the absence of the InnoTrans
event. Room rates declined by 3%, though RevPar
still increased by 1%.
Cologne/Bonn
Occ: 77%, ADR: €107, RevPar: €82
The prospects in Cologne/Bonn were not good in
September and the actual figures confirmed the
negative expectations. The Photokina trade fair
is only held every two years and the event was
missing in 2015. That could be felt well before from
the preliminary booking situation and room rates.
In addition, the “spoga + gafa” events shifted
a little further into August. This also pushed the
September ADR downwards. The school sum-
mer holidays were still taking place in September
in some German federal states. The “Kind & Ju-
gend” trade fair and the “dmexco” event, which
were very successful this year, generated short-
term pickup and clearly exceeded expectations
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following their surprising success last year. Overall,
however, there was very little corporate business.
In all, there was a 4% decline in occupancy in Co-
logne and Bonn. Room rates fell by as much as
7%. That led to a 11% fall in RevPar.
Dresden
Occ: 79%, ADR: €77, RevPar: €61
September seemed very unpredictable in Dresden
and the forecasts were correspondingly gloomy.
On top of this, there have been major declines
in group trade and many cancellations. But quite
a lot was going on in the city in September. The
Dresden hotels had not been expecting as much
from some of the conventions and conferences.
For example, the specialist medical congress, the
autumn meeting of the “Gesellschaft für Arbe-
itswissenschaft” and the “Interspeech” event were
all successful and generated significant increases
in both occupancy and room rates. The impact of
the Dresdner Oktoberfest was also nothing to be
sneezed at, even if visitors to the city were other-
wise rather cautious, especially at weekends. The
Dresden hotel industry was able to enjoy increases
in all key indicators (Occ: + 2%, ADR: + 2%, Rev-
Par: + 4%)
Dusseldorf
Occ: 75%, ADR: €103, RevPar: €77
The September forecasts for Dusseldorf provided
few grounds for optimism. However, in fact, things
turned out far better than expected. Overall, Rev-
Par increased by 0.7%, the result of the negative
occupancy figures (Occ: -3%) and a 3% increase
in room rates. In the end, the “Expopharm” trade
show and the FIP Congress in the last week of
September (a convention that rotates between
different venues, and which was absent in 2014)
enjoyed far more success than expected. The “Eu-
romold” trade fair, now in Dusseldorf for the first
time after previously being held in Frankfurt, was
also a success.
Frankfurt
Occ: 82%, ADR: €135, RevPar: €110
September generated growth in Frankfurt through
a 15% increase in RevPar, due to the positive room
rate trend (+11%). This year, the “IAA Pkw” trade
show took place (last year had been the turn of
the “Automechanika” event), and it lasted for two
weeks. Although the Automechanika did lead to
higher room rates, the IAA also had a strong influ-
ence due to the days needed to set up and dis-
mantle the show, as well as its longer duration. The
fair was also accompanied by events such as car
presentations. During the same month last year,
the last week of September was not a complete
business week due to the public holiday on 3 Oc-
tober being on a Friday. This year it the public holi-
day falls on a Saturday, so there will be corporate
and conference business during the week. In addi-
tion, the later scheduling of the school holidays this
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year has had particularly positive effects (they take
up one week less of September in Bavaria and in
Baden-Württemberg).
Hamburg
Occ: 85%, ADR: €120, RevPar: €103
September in Hamburg was marked by a generally
very poor development (RevPar: -10%), primarily
due to the fall in room rates (ADR: -9%). This year,
the high-priced “SMM” trade show was absent (it
is only held every two years). This was the main
reason for the very high fall in room rates. Besides,
last year also saw the “Wind Energy” trade show,
which is also held every two years. Highlights in
September 2015 included the “Seatrade” fair, as
well as the “Hamburg Cruise Days”, an event
which also took place last year. The later start of
the “Alstervergnügen” event (this time it began in
September) was not enough to compensate for
the lack of the two trade fairs. The two congresses
(the “DGU Kongress” and the „European PC Solar
Energy Conference and Exhibition”, the latter event
held at rotating venues) as well as the reschedul-
ing of the “Alstervergnügen” in September was not
enough to make up for the two absent trade fairs.
Munich
Occ: 86%, ADR: €188, RevPar: €162
September in Munich was much less rosy than last
year. This year, two major congresses were miss-
ing. The early end of Ramadan meant that guests
from the Arab region arrived earlier in July. For the
same reason, they also left earlier. The IBA trade
fair, which takes place only every three years, also
remained well below both expectations and last
year’s congresses. Room rates were thus very low
in both cases. The interim balance for the Oktober-
fest was very disappointing for the organizers, not
only because of the overcast weather. The hotel
industry also felt it. Contrary to expectations, oc-
cupancy fell by 2%. Room rates were down by just
1%. This meant a 3% decline in RevPar in Sep-
tember.
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Overview of all destinations
2015 2014 Var. Var.% 2015 2014 Var. Var.% 2015 2014 Var. Var.%
Berlin 89,6% 85,8% 3,8 4,4% 115,5 119,1 -3,6 -3,0% 103,6 102,2 1,4 1,4%Cologne / Bonn 77,1% 80,0% -2,9 -3,6% 106,6 114,6 -8,0 -7,0% 82,2 91,8 -9,6 -10,5%Dresden 79,0% 77,4% 1,6 2,1% 76,5 75,2 1,3 1,7% 60,5 58,2 2,3 4,0%Dusseldorf 74,5% 76,5% -2,0 -2,6% 102,9 99,7 3,2 3,2% 76,7 76,2 0,5 0,7%Frankfurt 81,8% 78,8% 3,0 3,8% 134,7 121,5 13,2 10,9% 110,2 95,7 14,5 15,2%Hamburg 85,4% 86,3% -0,9 -1,0% 120,1 132,3 -12,2 -9,2% 102,5 114,2 -11,7 -10,2%Munich 85,8% 87,7% -1,9 -2,2% 188,2 189,0 -0,8 -0,4% 161,5 165,8 -4,3 -2,6%
*Source: Fairmas GmbH / STR Global, based on data from participants with daily data entry, Data as of 01.10.2015
LegendOCC OccupancyADR Average Daily Rate (net rooms revenue)RevPar Revenue per available Room (net logistics revenue per available room)
Hotel Performance September 2015/2014*
Occupancy in % Average Daily Rate in Euro RevPar in Euro
4,4%
-3,6%
2,1%
-2,6%
3,8%
-1,0%-2,2%
-3,0%
-7,0%
1,7%3,2%
10,9%
-9,2%
-0,4%
1,4%
-10,5%
4,0%
0,7%
15,2%
-10,2%
-2,6%
Berlin Cologne / Bonn Dresden Dusseldorf Frankfurt Hamburg Munich
Occ ADR RevPar
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Fig.1: Trendbarometer Berlin 2015 – Trend versus last year
-2,0%
-3,8%
-6,5%
6,3%
0,6%
3,3%
4,1%
-3,2%
-3,4%
October
November
December
Last Year
Occ Adr RevPar
Source: Fairmas GmbH / Data as of 01.10.2015
Fairmas Trendbarometer
A peek into the future – in detail:
Berlin
Berlin seems to be taking the good impetus from
September into October. The third of October
(Germany’s national holi-
day) falls on a Saturday this
year, so there will be no long
weekend this time, but the
weekend itself is still looking
very good. However, the ES-
ICM Congress is also making
it difficult for tourists to book
for the first weekend in Oc-
tober 2015, since prices are
tailored to congress visitors
and not tourists. The weekend
will also be marked by many
events celebrating “25 years of German unity” in
the city, though. This year, the “Festival of Lights”
will not be taking place during the autumn school
holidays, meaning that much higher demand can
be expected. The ECNP Congress is also being
held this year, and this generates good demand.
The absence of the “belektro” event (which takes
place only every two years) is hurting occupancy
(Occ: -2%; ADR: +6%; RevPar: +4%).
Last year, ceremonies took place to mark the 25
years of the fall of the Berlin Wall. The city was able
to enjoy strong demand, matched by higher room
rates. The conference situation is similar to last
year. The DGPPN is especially interesting for the
inner city hotels, but it also has a potential for over-
flow into surrounding districts. Hoteliers are thus
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hopeful that the month can still recover the nearer
it gets. Many industries only decide on last-quarter
meetings and conventions at very short notice. A
4% decline in occupancy is expected and ADR is
set to rise by 0.6% (RevPar: -3%).
Expectations for December are marked by a lack
of confidence. Preliminary bookings are currently
well below those of last year. New Year’s Eve and
the Advent weekends are again looking very well
favourable and room rates are already very prom-
ising. Due to the convenient timing the end of the
year, a lot of good business can be expected,
thanks to the long weekends in January. Some
MICE inquiries are still expected. December has a
lot of potential, even if prospects currently still ap-
pear difficult. At present, occupancy is expected to
fall by 7%, while room rates are expected to rise by
3%. This means that RevPar will be 3% lower than
last year. But there is still plenty of time until then
and a lot can still happen. Berlin has every reason
to look forward to the New Year. Demand is strong,
prices are rising and this success is proving the
Berlin hotel industry right.
Cologne/Bonn
October will be a superb month for the hospital-
ity industry in Cologne/Bonn. The “Anuga” event,
which takes place only every two years, will be a
great driver of room rates in 2015. It was already ful-
ly booked out for months before the start, and the
local hotel industry has been experiencing this very
positively. Room rates are extremely high. In addi-
tion, this year the “Aquanale/FSB” double trade fair
takes place in Cologne again. The strong demand
these generate means that even better room rates
can be achieved at the end of
the month. The Cologne Mara-
thon and the two U2 concerts
will do the rest to ensure an
outstanding performance for
the Cologne hotel market. The
city’s hoteliers expect a 0.5%
occupancy increase. However,
ADR is forecast to soar by an
extremely healthy 45%. This
would mean a very impressive
46% rise in RevPar.
Fig.2: Trendbarometer Cologne/Bonn 2015 – Trend versus last year
0,5%
-3,0%
-9,6%
45,4%
1,2%
-0,4%
46,1%
-1,8%
-9,9%
October
November
December
Last Year
Occ Adr RevPar
Source: Fairmas GmbH / Data as of 01.10.2015
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For a long time the forecast
for November was positive.
The COMPAMED/MEDICA is
again very much in demand
(according to the trade fair
ranking of the AHGZ, this was
the German trade event that
provided the greatest yield).
Although it takes place in Dus-
seldorf, it always provides
plenty of overflow business in
Cologne, even well in advance.
However, the overall demand in the business and
leisure segments is otherwise very subdued at
this time. As a result, expectations have been cor-
rected downwards slightly. Nevertheless, the first
Christmas market weekend will also be a Novem-
ber highlight ensuring healthy occupancy figures,
and above all good room rates. Currently, a 3%
fall in occupancy is expected in November. Room
rates, however, are expected to rise by more than
1%, so that RevPar is expected to decline by 2%.
December will also be difficult to predict. The Ad-
vent business with the Christmas Market week-
ends greatly depends on the weather every year
and is correspondingly short. Business at New
Year’s Eve is traditionally strong though, and ex-
tremely convenient for employees this time around,
giving the timing of the public holidays at the end
of the year (and at the beginning of the next). Local
hoteliers are very cautiously forecasting a decline
in occupancy of around 10% and a slight (0.4%)
decrease in room rates. RevPar would thus remain
nearly 10% below last year’s figure. However, the
last word has certainly not been spoken.
Dresden
The advance-booking situation in Dresden for Oc-
tober is still far from ideal. There will be no long
weekend this year to attract more tourists to the
city, because 3 October (Day of German National
Unity) and Reformation Day both fall on Saturdays.
However, the “Semicon” congress will be held
again this year. This event did not take place in
2014, as it is only held every other year. This time,
the congress may again generate high room rates.
The DTG Congress and the Dresden Marathon
both have the potential to boost performance. Be-
sides this, the Dresden Oktoberfest is still running
Fig.3: Trendbarometer Dresden 2015 – Trend versus last year
-3,9%
2,6%
-1,8%
8,0%
-0,9%
3,4%
3,8%
1,6%
1,5%
October
November
December
Last Year
Occ Adr RevParSource: Fairmas GmbH / Data as of 01.10.2015
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at the beginning of the month. Hoteliers in Dresden
are expecting a 4% fall in occupancy in October,
though ADR is expected to increase by 8%. This
means that RevPar would grow by nearly 4% on a
year-on-year basis.
November is traditionally a weak month in Dres-
den. The city’s hoteliers are similarly guarded in
their predictions. However, there will be a number
of conventions in the city that could generate better
room rates. For example, the FAD Conference will
be taking place on 4 and 5 November 2015. Be-
sides this, the ITI Symposium (9 to 11 November
2015) and the Dresden “Energy in Future” confer-
ence (10 and 11 November 2015) are also taking
place. The ever-popular “Striezelmarkt” also takes
up one day more of November this year. Short-
term tourist trade will depend enormously on the
weather. In the local programme offered by three
to five-star hotels together with the Dresden tour-
ism authority, overnight stays are being promoted
in November at highly competitive prices. Cau-
tiously, a 3% increase in occupancy and a 1% de-
cline in room rates are being predicted for the city’s
hotels. RevPar would thus be around 2% higher
than last year.
The expectations for December are also positive.
The Advent weekends are traditionally good, not
only because of the “Striezelmarkt”. The local
hotels also expect much pickup at good rates at
New Year. This year, New Year’s Eve is very con-
venient for employees and much end-of-the-year
business will carry on into January. The Dresdner
hoteliers are cautiously forecasting a decline in oc-
cupancy of less than 2%. However, room rates are
expected to rise by more than
3%, which would result in a
RevPar increase of almost 2%.
Dusseldorf
Strong growth is again promised
in Dusseldorf in October with
overall performance set to grow
by 12%. This year, the calendar
includes the “A + A” Trade Fair
(held every two years, running
over four days) and the five-day
“Anuga” event in Cologne. The
Fig.4: Trendbarometer Dusseldorf 2015 – Trend versus last year
-1,1%
-1,0%
-9,2%
11,9%
3,1%
-4,1%
10,7%
2,1%
-12,8%
October
November
December
Last Year
Occ Adr RevParSource: Fairmas GmbH / Data as of 01.10.2015
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“Expopharm” takes up two days
of October. Moreover, the “Re-
haCare” trade fair (three days)
is taking place in October again
after three years and not (as in
previous years) in September.
Hoteliers expect high room rate
levels from all these trade fairs,
especially from the A + A.
November looks set to be a
month of growth, albeit with a
decline in occupancy. The main reason for this is
the high increase in room rates (ADR: +3%). Ac-
cording to statements from many hoteliers, Novem-
ber 2015 will be similar to last year. The four-day
“Medica” trade fair is being held again. Due to the
high demand and the good advance bookings, a
higher ADR is expected, though this will be at the
expense of occupancy. Otherwise, November will
be a strong business month with much corporate
and MICE business.
The forecast for this December is very poor in terms
of all three parameters (Occ: -9%, ADR: -4%, and
RevPar: -13%). Even so, some hoteliers do expect
a more positive development in the months to
come, due to the healthy advanced booking situa-
tion in the MICE sector. The weekends are already
well booked, thanks to the Christmas markets in
Dusseldorf. It is expected that the overall result will
Frankfurt
October in Frankfurt was marked by growth in all
three indicators (Occ: +3.2%, ADR: 1.7%, and
RevPar: +5.0%). This year, is according to ho-
telier statements, there will be a particularly high
demand in the group and banquet sectors. The
third of October public holiday falls on a weekend
this year (in 2014 on a Friday), so permitting a full
business week with higher room rates. Besides
this, the “Buchmesse“ (book fair) took place ex-
actly one week earlier this year (one week before
the autumn school holidays), presenting Frankfurt
with exactly two full business weeks. It is assumed
that higher-priced business can be sold, which ex-
plains the increase in room rates. There was only
one business week in the same month last year to
counter the “Buchmesse“ and the two-week au-
tumn holidays.
Fig.5: Trendbarometer Frankfurt 2015 – Trend versus last year
3,2%
0,9%
3,1%
1,7%
-0,2%
-1,1%
5,0%
0,8%
2,0%
October
November
December
Last Year
Occ Adr RevPar
Source: Fairmas GmbH / Data as of 01.10.2015
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The forecasts still suggest that November is still
on course for growth, with a 1% increase in Rev-
Par. However, it remains to be seen just how the
month will finally develop, although increased de-
mand is already expected in the banquet sector.
This year will be opened by the first annual “form-
next”, a trade fair for tool and mould-making (17
to 20 November 2015). The “Allerheiligen” public
holiday (Halloween) in Baden-Württemberg und
North Rhine-Westphalia is also on a Sunday this
year (1 November), so that the business week in
these two federal states will not be ruined as it
was last year, as was clearly noticed by a number
of hoteliers. As a rule, the month of November is
marked by healthy inquiries from the conference
and corporate sectors.
The outlook in December is also overall posi-
tive with RevPar set to increase by 2%. This year,
Christmas Eve falls on a Thursday. Hoteliers are
expecting a very popular fourth Advent weekend
(Christmas market trade), influenced by higher de-
mand in the group business segment, which ex-
plains the growth in occupancy of more than 3%.
Apart from that, December is already marked by
good demand in the conference and banqueting
segment. Certainly, it is still to be seen whether this
demand will also be upheld and bookings will not
be cancelled, but the trend so far is a positive one.
Hamburg
Up to now, October in Hamburg has been marked
by a 1% decline in RevPar. October is largely
marked by tourist sector business. The expected
decline in room rates is due to the holiday situation
in October. There was still a full business week in
the last week of October in 2014. This year, the
entire month is dominated by school holidays (in
North Rhine-Westphalia during
the first two weeks of October
and in the third and fourth Oc-
tober weeks in Hamburg. It re-
mains to be seen whether the
overall result will be adjusted
upwards, for example, due to
the EANM Congress of Nuclear
Medicine (an event held at dif-
ferent venues) that takes place
from 10 to 14 October this year,
as well as the World Publishing
Fig.6: Trendbarometer Hamburg 2015 – Trend versus last year
-0,8%
-1,4%
0,2%
-0,3%
1,5%
0,8%
-1,0%
0,1%
1,0%
October
November
December
Last Year
Occ Adr RevPar
Source: Fairmas GmbH / Data as of 01.10.2015
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Expo Congress (also held at different locations)
from 5 to 7 October 2015.
On the other hand, the forecast for November
does promise more hope. There should be a slight
(0.1%) increase in RevPar due to higher room rates.
This year, the annual “Hanseboot” boat show is
taking place again. It will take up six more days of
November than was the case in 2014.
December looks promising in all three key indi-
cators (Occ: +0.2%, ADR: +0.8%, and RevPar:
+1.0%). Here too, as in many other cities, improved
MICE and leisure business is to be reckoned with.
This year, Christmas Eve falls on a Thursday (in
2014 it was on a Wednesday), meaning that there
will be an extra business day, which will have a
positive effect on room rates.
Munich
The prospects for October are
good. Last year, the autumn
school holidays were entirely in
October but this year they fall in
November. As a result, there will
be one additional and full busi-
ness week to be sold in October.
The event situation is otherwise
very similar to last year. The Ok-
toberfest and EXPO are expect-
ed to create a similar level of
demand as last year. The “ceramitec” trade fair will
provide figures around as good as for last year’s
DGGG Congress. Good weather at the weekends
and economically priced Bayern Munich Champi-
ons League games could also boost occupancy.
Currently, however, the Munich hotel industry is
anticipating a 0.3% drop in occupancy. However,
ADR is expected to increase by 2%, with RevPar
up by the same amount.
However, November is again expected to be
marked by serious declines. The school autumn
holidays will still be taking place in the first week of
November. October business should benefit from
this, but high room rate business and MICE sec-
tor trade will suffer in November. Besides this, the
very highly priced “electronica” event took place
in 2014. Nonetheless, the “productronica” trade
show was marked by significantly lower room
Fig.7: Trendbarometer Munich 2015 – Trend versus last year
-0,3%
0,8%
-3,7%
1,8%
-4,5%
-0,7%
1,5%
-3,7%
-4,4%
October
November
December
Last Year
Occ Adr RevPar
Source: Fairmas GmbH / Data as of 01.10.2015
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FairmasHotel Reportin cooperation with SolutionsDotWG
rates this year and demand is lower. Hoteliers are
currently expecting a very small increase in occu-
pancy of 0.8%. ADR, though, is projected to drop
by almost 5%. RevPar would hence decline by a
year-on-year 4%.
December is also expected to be worse in Munich.
Because of the holiday situation, only two and a
half business weeks are available. The group res-
ervation situation is so far well behind last year’s.
During Advent, the weekends provide traditionally
good business and individual reservations are be-
ing made a much shorter notice. Hoteliers are
therefore predicting improvements over the com-
ing weeks. After all, New Year’s Eve is extremely
convenient for employees this year. Currently, the
city’s hotels are still expecting occupancy to fall by
almost 4%. Room rates are expected to decline
by 0.7%. RevPar would thus be at least 4% below
last year’s figure. It remains to be seen over the
next few weeks just how the month will develop.
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FairmasHotel Reportin cooperation with SolutionsDotWG
In Focus
Rate bands – Berlin, Dusseldorf, Munich
In last June’s issue, we looked at the issue of room rate bands. In the meantime, three quarters of the “new”
year is already behind us. Reason enough to cast a critical eye over the developments once again. Together
with the “AHGZ” newspaper for the German hospitality industry, we have looked at the room rate bands for
Berlin, Dusseldorf and Munich again.
Typically, a hotel’s positioning in a specific category is also associated with different cost levels. This means
that higher numbers of stars (in the classification used by the DEHOGA Hotel and Restaurant Association)
are often reflected in a higher level of staff per guest. In the five-star luxury hotel business, where guest’s
service expectations are often very high, personnel costs are also according large.
Is it possible for hoteliers in the higher categories to
distinguish themselves from lower classified com-
petitors sufficiently and force through higher room
prices for their product than the competition? We
have examined this issue in detail exclusively for
the “AHGZ”, the newspaper for the German hos-
pitality industry. Mid-range hotels (and higher cat-
egories) were subjected to a great deal of scrutiny.
In each of the three cities concerned, the room
rate bands of the three-star hotels were compared
with those of the four-star hotels; the results are
displayed in a diagram.
Likewise, the room rates bands were recorded for
the five-star hotel industry in the respective cities
and compared with the four-star price ranges in
graphs. A comparison between the room rates of
the four-star and five-star hotel industry in Berlin,
Dusseldorf and Munich is shown in the graphs.
Our investigation into all three cities covers the pe-
riod from January 2009 to August 2015.
The diagrams show the overlaps and distinct fea-
tures of the various categories, as well as the sig-
nificance of events. Thus, the price peaks in the
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FairmasHotel Reportin cooperation with SolutionsDotWG
hospitality industry at the time of trade fairs in Dus-
seldorf, the Munich Oktoberfest or for the Champi-
ons League final in Berlin can clearly be seen.
In Berlin, there has apparently never been a clear
demarcation between the three-star and four-star
categories. On the contrary, the room rates in the
three-star sector are nowadays almost entirely at
the lower level of four-star hotel prices. In recent
years, the three-star hotels in particular have been
raising their rates. Room rates in the city have risen
significantly, especially in recent months. However,
Fig.8: Rate band 3* and 4* hotels
0
100
200
300
400
500
600
0
100
200
300
400
500
600
Jan‐09
Feb‐09
Mar‐09
Apr‐09
May‐09
Jun‐09
Jul‐09
Aug‐09
Sep‐09
Oct‐09
Nov‐09
Dec‐09
Jan‐10
Feb‐10
Mar‐10
Apr‐10
May‐10
Jun‐10
Jul‐10
Aug‐10
Sep‐10
Oct‐10
Nov‐10
Dec‐10
Jan‐11
Feb‐11
Mar‐11
Apr‐11
May‐11
Jun‐11
Jul‐11
Aug‐11
Sep‐11
Oct‐11
Nov‐11
Dec‐11
Jan‐12
Feb‐12
Mar‐12
Apr‐12
May‐12
Jun‐12
Jul‐12
Aug‐12
Sep‐12
Oct‐12
Nov‐12
Dec‐12
Jan‐13
Feb‐13
Mar‐13
Apr‐13
May‐13
Jun‐13
Jul‐13
Aug‐13
Sep‐13
Oct‐13
Nov‐13
Dec‐13
Jan‐14
Feb‐14
Mar‐14
Apr‐14
May‐14
Jun‐14
Jul‐14
Aug‐14
Sep‐14
Oct‐14
Nov‐14
Dec‐14
Jan‐15
Feb‐15
Mar‐15
Apr‐15
May‐15
Jun‐15
Jul‐15
Aug‐15
BerlinRate band3*‐ und 4*‐Hotels
3 Sterne 4 Sterne
Source: Fairmas GmbH / Data as of 01.10.2015
Fig.9: Rate band 4* and 5* hotels
0
100
200
300
400
500
600
0
100
200
300
400
500
600
Jan‐09Feb‐09Mar‐09
Apr‐09May‐09
Jun‐09Jul‐09Aug‐09Sep‐09Oct‐09
Nov‐09
Dec‐09Jan‐10Feb‐10Mar‐10
Apr‐10May‐10
Jun‐10Jul‐10Aug‐10Sep‐10Oct‐10
Nov‐10
Dec‐10Jan‐11Feb‐11Mar‐11
Apr‐11May‐11
Jun‐11Jul‐11Aug‐11Sep‐11Oct‐11
Nov‐11
Dec‐11Jan‐12Feb‐12Mar‐12
Apr‐12May‐12
Jun‐12Jul‐12Aug‐12Sep‐12Oct‐12
Nov‐12
Dec‐12Jan‐13Feb‐13Mar‐13
Apr‐13May‐13
Jun‐13Jul‐13Aug‐13Sep‐13Oct‐13
Nov‐13
Dec‐13Jan‐14Feb‐14Mar‐14
Apr‐14May‐14
Jun‐14Jul‐14Aug‐14Sep‐14Oct‐14
Nov‐14
Dec‐14Jan‐15Feb‐15Mar‐15
Apr‐15May‐15
Jun‐15Jul‐15Aug‐15
BerlinRate band 4*‐ und 5*‐Hotels 5 Sterne 4 Sterne
Source: Fairmas GmbH / Data as of 01.10.2015
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FairmasHotel Reportin cooperation with SolutionsDotWG
middle class hotels have been unable to set them-
selves apart. Competition in the capital’s four-star
hotel sector is apparently so great and the price
competition so intense that entry prices for these
hotels do not start at around the top of the three-
star room rates band, but instead attack the three-
star hotels near to their starting prices. This trend
has continued and there seems to be no improve-
ment in sight, even though the four-star hotels
have also expanded their rates band upwards.
In terms of room rates, the three-star hoteliers in
Berlin find themselves in direct comparison with
four-star hotels, and have to provide good rea-
sons why their guests should stay in three-star ac-
commodation, even though visitors to the city can
book higher category rooms for the same price.
They have to try to score points with features other
than the simple classification standards. However,
Berlin’s four-star hotels can hardly be happy with
the price situation, either. They want to use their
comparatively low entry prices to increase occu-
pancy and poach guests away from the three-star
segment. However, such business practices rather
prevent hoteliers clearly positioning their own ho-
tels and thus achieving higher rates in the long
term.
In Dusseldorf, the overlap in room rates between
three-star and four-star hotels is far smaller. Here,
numerous peaks illustrate just how heavily Dussel-
dorf depends on trade fairs. It is precisely at such
Fig.10: Rate band 3* and 4* hotels
0
100
200
300
400
500
600
700
0
100
200
300
400
500
600
700
Jan‐09Feb‐09Mar‐09
Apr‐09May‐09
Jun‐09Jul‐09Aug‐09Sep‐09Oct‐09
Nov‐09
Dec‐09Jan‐10Feb‐10Mar‐10
Apr‐10May‐10
Jun‐10Jul‐10Aug‐10Sep‐10Oct‐10
Nov‐10
Dec‐10Jan‐11Feb‐11Mar‐11
Apr‐11May‐11
Jun‐11Jul‐11Aug‐11Sep‐11Oct‐11
Nov‐11
Dec‐11Jan‐12Feb‐12Mar‐12
Apr‐12May‐12
Jun‐12Jul‐12Aug‐12Sep‐12Oct‐12
Nov‐12
Dec‐12Jan‐13Feb‐13Mar‐13
Apr‐13May‐13
Jun‐13Jul‐13Aug‐13Sep‐13Oct‐13
Nov‐13
Dec‐13Jan‐14Feb‐14Mar‐14
Apr‐14May‐14
Jun‐14Jul‐14Aug‐14Sep‐14Oct‐14
Nov‐14
Dec‐14Jan‐15Feb‐15Mar‐15
Apr‐15May‐15
Jun‐15Jul‐15Aug‐15
DusseldorfRate band 3*‐ und 4*‐Hotels
3 Sterne 4 Sterne
Source: Fairmas GmbH / Data as of 01.10.2015
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FairmasHotel Reportin cooperation with SolutionsDotWG
times that four-star hotels can achieve top prices,
so that the three-star hotels are often unable to
compete.
Leading trade shows, such as the “drupa” (held
every four years) or the “Kunststoffmesse” (plastics
trade fair) that takes place every three years, push
the prices of rooms in four-star hotels even be-
yond the peak rates charged by five-star hotels.
Nonetheless, the figures also show that the rela-
tively weak trade fair year of 2015 has ensured that
prices from 2009 (and earlier) were being charged
Fig.11: Rate band 4* and 5* hotels
0
100
200
300
400
500
600
700
0
100
200
300
400
500
600
700
Jan‐09Feb‐09Mar‐09
Apr‐09May‐09
Jun‐09Jul‐09Aug‐09Sep‐09Oct‐09
Nov‐09
Dec‐09Jan‐10Feb‐10Mar‐10
Apr‐10May‐10
Jun‐10Jul‐10Aug‐10Sep‐10Oct‐10
Nov‐10
Dec‐10Jan‐11Feb‐11Mar‐11
Apr‐11May‐11
Jun‐11Jul‐11Aug‐11Sep‐11Oct‐11
Nov‐11
Dec‐11Jan‐12Feb‐12Mar‐12
Apr‐12May‐12
Jun‐12Jul‐12Aug‐12Sep‐12Oct‐12
Nov‐12
Dec‐12Jan‐13Feb‐13Mar‐13
Apr‐13May‐13
Jun‐13Jul‐13Aug‐13Sep‐13Oct‐13
Nov‐13
Dec‐13Jan‐14Feb‐14Mar‐14
Apr‐14May‐14
Jun‐14Jul‐14Aug‐14Sep‐14Oct‐14
Nov‐14
Dec‐14Jan‐15Feb‐15Mar‐15
Apr‐15May‐15
Jun‐15Jul‐15Aug‐15
Dusseldorf Rate band 4*‐ und 5*‐Hotels 5 Sterne 4 Sterne
Source: Fairmas GmbH / Data as of 01.10.2015
Fig.12: Rate band 3* and 4* hotels
0
50
100
150
200
250
300
350
400
450
500
0
50
100
150
200
250
300
350
400
450
500
Jan‐09
Feb‐09
Mar‐09
Apr‐09
May‐09
Jun‐09
Jul‐09
Aug‐09
Sep‐09
Oct‐09
Nov‐09
Dec‐09
Jan‐10
Feb‐10
Mar‐10
Apr‐10
May‐10
Jun‐10
Jul‐10
Aug‐10
Sep‐10
Oct‐10
Nov‐10
Dec‐10
Jan‐11
Feb‐11
Mar‐11
Apr‐11
May‐11
Jun‐11
Jul‐11
Aug‐11
Sep‐11
Oct‐11
Nov‐11
Dec‐11
Jan‐12
Feb‐12
Mar‐12
Apr‐12
May‐12
Jun‐12
Jul‐12
Aug‐12
Sep‐12
Oct‐12
Nov‐12
Dec‐12
Jan‐13
Feb‐13
Mar‐13
Apr‐13
May‐13
Jun‐13
Jul‐13
Aug‐13
Sep‐13
Oct‐13
Nov‐13
Dec‐13
Jan‐14
Feb‐14
Mar‐14
Apr‐14
May‐14
Jun‐14
Jul‐14
Aug‐14
Sep‐14
Oct‐14
Nov‐14
Dec‐14
Jan‐15
Feb‐15
Mar‐15
Apr‐15
May‐15
Jun‐15
Jul‐15
Aug‐15
MunichRate band 3*‐ und 4*‐Hotels
3 Sterne 4 Sterne
Source: Fairmas GmbH / Data as of 01.10.2015
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FairmasHotel Reportin cooperation with SolutionsDotWG
in the three and four-star sector. In Dusseldorf too,
the costs of rooms in four-star and five-star hotels
clearly overlap. Here again, as in Berlin, it can be
seen that rooms in four-star hotels can sometimes
be had for less than €50. And, even more than a
year ago, the question arises of whether such low
rates are really needed only in order to increase
occupancy.
By way of contrast, and similar to the situation in
Berlin, the rates band of the three-star hotels in
Munich almost completely matches that of the
four-star hotel segment. In the process, it emerges
that three-star hotels in Munich are equally capa-
ble of hiking up prices when the four-star hotels
are charging top rates. Here too, in the lower room
Fig.13: Rate band 4* and 5* hotels
0
100
200
300
400
500
600
700
800
900
1000
0
100
200
300
400
500
600
700
800
900
1000
Jan‐09Feb‐09Mar‐09
Apr‐09May‐09
Jun‐09Jul‐09Aug‐09Sep‐09Oct‐09
Nov‐09
Dec‐09Jan‐10Feb‐10Mar‐10
Apr‐10May‐10
Jun‐10Jul‐10Aug‐10Sep‐10Oct‐10
Nov‐10
Dec‐10Jan‐11Feb‐11Mar‐11
Apr‐11May‐11
Jun‐11Jul‐11Aug‐11Sep‐11Oct‐11
Nov‐11
Dec‐11Jan‐12Feb‐12Mar‐12
Apr‐12May‐12
Jun‐12Jul‐12Aug‐12Sep‐12Oct‐12
Nov‐12
Dec‐12Jan‐13Feb‐13Mar‐13
Apr‐13May‐13
Jun‐13Jul‐13Aug‐13Sep‐13Oct‐13
Nov‐13
Dec‐13Jan‐14Feb‐14Mar‐14
Apr‐14May‐14
Jun‐14Jul‐14Aug‐14Sep‐14Oct‐14
Nov‐14
Dec‐14Jan‐15Feb‐15Mar‐15
Apr‐15May‐15
Jun‐15Jul‐15Aug‐15
MunichRate band 4*‐ und 5*‐Hotels 5 Sterne 4 Sterne
Source: Fairmas GmbH / Data as of 01.10.2015
rate range there is no clear demarcation between
three and four-star hotels. However, the luxury
segment in Munich is not letting itself be overtaken
by the lower category and is pulling the market
continuously upwards with its very high room rates.
In Munich, the impact of events and trade shows
on room pricing can easily be observed. Distinct
peaks emerge regularly during the Oktoberfest,
particularly in the five-star sector. Major trade fairs,
such as “Bauma”, which takes place in April every
three years, regularly drive room prices up to peak
levels.
While the Bavarian capital remains the most ex-
pensive city in Germany, able to record good
growth rates in the upmarket segment in 2015,
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FairmasHotel Reportin cooperation with SolutionsDotWG
the different price category bands have been even
more blurred than in Berlin for years.
Berlin’s five-star hotels are marked by a huge price
range. Although there is a large overlap with the
four-star hotels, the luxury class establishments
charge room rates that are far higher than the
peak rate for four-star hotels. The competition in
the five-star range is great; in recent years, many
new openings by international chains and private
investors have revived the capital, which is now
extremely attractive to tourists. Yet, just as before,
room rates of well below €100 can still be found,
even in the five-star sector.
So the price problem persists. Finally, extremely
low prices have a negative effect on quality and
– in the last analysis – on credibility and economic
efficiency. That is why price dumping is not the
solution at all. On the contrary, a way must be
found to escape this dilemma. Above all, luxury
segment hoteliers have to be asked to refrain from
participating in price dumping, and – in particular
– need to stand up for their product and its quality.
They need to differentiate themselves from the low-
er categories once again in order to ensure long-
term room rate growth. By upwardly correcting the
rate structure, the entire market could follow suit
and provide a basis for an overall improvement in
ADR. Here, Munich is leading by example.
Steadily increasing numbers of beds are leading to
cut-throat competition in many places. Budget ho-
tels are springing up like mushrooms while for sev-
eral years now, providers of apartments have also
more been taking more guests away from higher-
category hotels. Online platforms have also been
adding to the difficulties the hotels face. Yet price
dumping offers no guarantee for survival in the
face of this competition. Large hotel chains, cross-
financed by business at other locations, might be
able to resist, but smaller companies will be quick-
ly forced into bankruptcy. Berlin’s three-star estab-
lishments have already made a good start.
Marina Behre and Nadine Kilian
In cooperation with the AHGZ
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FairmasHotel Reportin cooperation with SolutionsDotWG
The Fairmas Hotel Report is published by:
Fairmas Gesellschaft für Marktanalysen mbH, Sachsendamm 6, 10829 Berlin, Deutschland
Solutions Dot WG GmbH, Kranzer Strasse 6-7, 14199 Berlin, Deutschland
Fairmas Gesellschaft für Marktanalysen mbH specializes in market
analyses and the development of planning and controlling software
for the hotel industry. The company offers its international clientele a
hotel benchmarking platform, as well as various software applications
for the fields of budgeting, forecasting, controlling, management re-
porting and work process optimization.
As a strategic management consultancy, Solutions Dot WG develops
individual and customized strategies and solutions for companies in
the hotel, catering and tourism, and provides support in implementing
plans. Solutions dot also manages independent project implementa-
tion, is active in support management and interim management, as
well as in the total quality management (TQM) sector.
The Fairmas Hotel Report is edited by:
Nadine Kilian, Marketing & Communications Manager,
Fairmas Gesellschaft für Marktanalysen mbH, e-mail: [email protected]
Gabriele Kiessling, Consultant und Project Management,
Solutions Dot WG GmbH, e-mail: [email protected]
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FairmasHotel Reportin cooperation with SolutionsDotWG
Disclaimer
No representation or warranty (express or implied) is given as to the accuracy or complete-ness of the
information contained in this publication, and, to the extent permitted by law, Fairmas GmbH / Solutions
Dot WG do not accept or assume any liability, responsibility or duty of care for any consequences of you
or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for
any decision based on it.