Capital Language Solutions | Berlin hotel market

Berlin hotel market

Berlin hotel market – More than

just a room for the night?


The Berlin hotel market is booming. A total of 12.7 million tourists visited Berlin last year, up from 12.3 million in 2015 and a massive jump from the 3.2 million visitors the German capital welcomed in 1996. The number of overnight stays in the city exceeded 31 million for the first time in 2016, equivalent to a year-on-year increase of just under 3%, and an incredible 400% higher than just 20 years ago. There is little disagreement among market observers – the number of tourists and business travellers is set to grow further. So, what does this mean for Berlin’s hotel developers and operators? Let’s take a look at a few of the industry’s key metrics, pipeline projects and emerging trends. Read on to find out more.


Measuring hotel performance


In the hotel industry, just like in any business, the bottom line is all about sales and profits. At the same time, hotels have a number of industry-specific metrics for measuring overall performance, many of which are hidden behind acronyms and abbreviations:

  • Average Occupancy Rate (durchschnittliche Zimmerauslastung)

According to the EY Real Estate “Hotel Landscape Report Q1 2017”, Berlin’s hotels had an average occupancy rate of 77.1% in 2016, which is well within the 75-80% range that is considered healthy within the industry. Although, as other metrics can confirm, if high room occupancy rates are driven by heavy discounting, the headline occupancy figure does not necessarily mean that the operational side of a hotel is in a sustainable and healthy condition.

  • ADR – Average Daily Rate / ARR – Average Room Rate (durchschnittlicher Zimmerpreis)

The ADR/ARR metric is a useful measure of a hotel’s financial performance, and makes it easy to compare a hotel’s performance with that of its competitors. In Berlin, for example, the ADR for 2016 was €96, compared with €134 in Munich and €124 in Frankfurt.

  • RevPAR – Revenue per available room (Ertrag pro Zimmer)

This metric provides a snapshot of the revenues generated by each available room, although it does exclude other revenue streams such as food and beverages (F&B), spa and wellness facilities, etc. If these are included, the result is the TRevPAR, or total revenue per available room. RevPAR is calculated by dividing the revenue from a hotel’s rooms by the number of available rooms.

  • GOPPAR – Gross Operating Profit per Available Room (Brutto-Betriebsgewinn pro verfügbaren Zimmer)

This metric provides greater insight into the actual performance of a hotel than the more commonly used RevPAR. It not only reflects the actual revenues that a hotel has generated, but also takes account of the operating costs associated with generating those revenues. GOPPAR is calculated by deducting expenses from a hotel’s total revenues, and then dividing this figure by the number of available rooms.


Pipeline hotel developments


Construction of the Hotel Capri began in June 2015 and this apartment hotel at Petriplatz in Berlin-Mitte is scheduled to later this year. Operated by Frasers Hospitality, famous for their long-stay concept, this new seven-storey hotel will contain 144 rooms at a truly historic location. The foyer’s glass floor will provide visitors with an unrivalled view of the historic town house cellars below.


The largest Hampton by Hilton hotel in the world, the Berlin City Centre Alexanderplatz, is due to open in May 2017 at the junction of Otto-Braun-Straße and Mollstraße. The hotel boasts 344 modern rooms over nine floors, along with a 24-hour bar and fitness area.


Occupying the first 18 storeys of the new, 118-metre tall Upper West at Breitscheidplatz, Motel One is soon to open a new hotel with 582 rooms, complete with a tenth-floor terrace and breakfast restaurant, which promises astounding views across Zoologischer Garten and the Berlin cityscape.


The Technology Park at Berlin-Adlershof is getting its own 4-star, 320-room conference hotel. The hotel’s plans include conference rooms, a main hall for up to 1,000 guests and a multi-functional hall for receptions and exhibitions. The top floor of the 54-metre hotel has been reserved for the Skybar, and the amenities also include a fitness centre and spa area.


Berlin’s tallest skyscraper, and Germany’s tallest hotel, is currently being developed next to the Hotel Estrel’s current 1,125-room hotel and conference centre. The 46-storey tower will add 814 rooms to the hotel and reach 176 metres into the skies above Berlin-Neukölln. The new tower should be open for business by 2021 at the latest.


Emerging hotel trends


Germany’s tourism boom is set to continue with further increases in domestic tourism and business travel, along with higher volumes of foreign tourists. One major trend, according to market observers, is the emergence of a number of secondary cities, such as Heidelberg and Mannheim, among the sector’s top performers. As ever more visitors continue to flock to Germany’s secondary cities, occupancy rates, daily rates and revenues have surged to match (and in some cases even surpass) the figures for the countries A-cities.

As the pipeline projects above clearly demonstrate, international hotel chains are keen to expand their presence with new, large-scale hotels in Germany, but there will also be a strong rise in the number of boutique hotels and smaller hotels with specialist offerings. Even international hotel chains are making more of an effort to ensure that their hotels have more of a local charm, and are increasingly tailoring their menus and facilities to reflect a location’s individual character. This means that guests can spend more time (and money) in their hotel and still soak up the distinct atmosphere of the city outside.

A growing number of hotels are including eye-catching terraces, trendy bars and attractive restaurants with the clear aim of attracting not only guests, but local custom. This trend will continue to gain traction and represents an increasingly important additional revenue stream for hotels who can boost their bottom lines with food and beverage sales. Creating local buzz is becoming more and more important, and the benefits of attracting local patrons can not be ignored.

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