According to the latest city review by Christie + Co, using data provided by STR Global, Munich hotels recorded a 1.3% increase in RevPAR for the first eight months of 2008 compared to the same period last year, despite occupancy levels falling by 1.3 percentage points. Preliminary figures for September show a slight drop in RevPAR of 0.5% compared to the previous year.
View Munich market report pdf with graphs.
Widely known for the ‘Oktoberfest’, Munich is Germany’s third largest city and, as such, benefits from excellent traffic connections and a strong local economy. The city is home to a large number of international and national companies and offers a trade fair centre, which attracts more than 30,000 exhibitors and over two million visitors every year. It is also a popular destination for leisure travellers from all over the world. The share of international travellers, representing close to 50% of all overnights generated in 2007, is significantly higher than in other key German markets.
With the city attracting a well balanced mix of business and leisure travellers, the local hotel market benefits from relatively stable demand levels during the week and throughout the year.
Trends in Hotel Market Performance
The following graphs present data sourced from STR Global, highlighting the change in RevPAR between 2006 and 2007. Munich hoteliers enjoyed a 7.4% RevPAR increase in 2007, compared to 2006, as a result of a rise in occupancy (Occ.) levels (2.6 percentage points) and a 3.6% increase in average room rates (ARR).
In April 2007, local hoteliers recorded an exceptional 96% increase in RevPAR during that month as a result of the 28th BAUMA exhibition - an international trade fair for construction machinery. However, the months of June and July, which were strongly impacted by the FIFA world championship in 2006, showed significant decreases in terms of ARR. As usual, demand levels peaked during the months of September and October, when the annual beer festival ‘Oktoberfest’ took place.
Year-to-date results for the first nine months of 2008 show a downward trend in occupancy rates, whereas ARR increased compared to the previous year.
Trends in Hotel Supply
Munich has seen steady growth in hotel supply over recent years and this is set to continue with seven new hotels already opened since the start of 2008, adding around 900 rooms to the city’s capacity.
The 150-room Express by Holiday Innhotel opened its doors near Munich Airport in April 2008. The following month, two further three-star properties opened in close vicinity to the city centre - the Hotel Angelo (150 rooms) and the Hotel Cocoon (44 rooms). May also saw the opening of the budget B&B Hotel Munich North (132 rooms) on Frankfurter Ring. The Leonardo Hotel Munich City Centre opened near the main train station in July, adding a further 80 rooms to the three-star segment. This summer also saw the budget Motel One Munich City West (121 rooms) open its doors on Landsberger Strasse, shortly followed by the opening of the four-star Azimut Hotel Munich City East (167 rooms) on Kronstadterstrasse. Last month saw the city’s most recent opening, with the four-star Treff Hotel Munich City Centre adding another 64 rooms on Schillerstrasse.
2008’s opening pipeline is set to be surpassed next year, with another nine hotels scheduled to open. New properties will include a 72-room boutique hotel at Viktualienmarkt, another budget Motel One Hotel Sendlinger Tor (244 rooms), and an Ibis Hotel (200 rooms) in the Westend district. The city’s three and four-star segments will be enhanced by the addition of a Hotusa Hotel (146 rooms), a Citadines Aparthotel (230 apartments), both at Arnulfpark, a Novotel at Munich Airport (250 rooms), and the Leonardo Hotel Munich Schwabing (72 rooms). Another four hotel projects are scheduled for completion by the end of 2011, including another Motel One Hotel of 250 rooms, a four-star Hotel BISS (66 rooms), a 255-room Dolce Hotel in Unterschleissheim, and a 426-room, four-star Leonardo Hotel Munich Olympiapark.
‘As a key player for over 30 years in the Munich hotel market, we from ArabellaStarwood strongly believe in the future of the city as a solid hotel destination. Therefore we are constantly committed to invest and maintain our portfolio of over 2,000 rooms on a high level in order to offer a top-quality product and service, combined with attractive and well known brands. Since Munich benefits from a well-balanced mix of travellers across all segments, we are able to offer a broad range of our different brands within the city.’
Christian Böll, Managing Director - ArabellaStarwood Hotels & Resorts GmbH
Trends in Hotel Transactions
From a transactional perspective, despite strong investor interest, Munich is characterised by the scarcity of properties for sale. This has led to only a few single asset transactions taking place in recent years. The Marriott Munich Hotel alone has changed ownership three times between 2003 and 2008. It was first acquired by Blackstone Group in 2003 and resold to Marriott International in 2005. In early 2008 JER Partners acquired the property, with Marriott retaining a long-term management agreement. Another transaction of note was the acquisition by Herkules Grundbesitz of the Atrium Hotel Munich, for €14.9 million in 2007.
Additionally, a number of hotels in the city have been sold as part of portfolio transactions, including the Rocco Forte Charles Hotel in 2006, which was part of the mixed-use development Lenbachgärten. The same year saw two Innside Premium Hotels change ownership as part of Sol Meliá’s acquisition of Innside Premium Hotels Group. This was followed by Blackstone’s sale of three German Mercure Hotels, including one property in Munich, for €58 million to property investment company, Mountain Capital. The most recent portfolio deal including properties in Munich took place earlier this year, when the Austrian Hotel Company Portfolio was sold to a Russian investor.
Without a doubt, the Bavarian capital is one of the most robust hotel markets in Germany, with future prospects remaining positive despite the general economic slowdown in the country.
For further information please contact:
Janine Blochwitz
Consultant
Christie + Co
Direct line: +49 (89) 2 00 000 7-13
Email: janine.blochwitz@christie.com
Konstanze Auernheimer
Director of Marketing
STR Global
Direct line: 020 7922 1961
Email: kauernheimer@strglobal.com
Armin Bruckmeier
Head of Advisory & Valuation, Germany
Christie + Co
Direct line: +49 (89) 2 00 000 7-12
Email: armin.bruckmeier@christie.com
Mark Wingett
Head of Media Relations
Christie + Co
Direct line: 020 7227 0794
Email: mark.wingett@christie.com
Note to Editors:
Christie + Co uses desk-based research and experienced local industry specialists to produce bi-monthly city reviews. Hotel trading data is provided by STR Global.
Founded in 1935, Christie + Co is the leading firm of surveyors, valuers, consultants and agents specialising in the hospitality, leisure, retail and care sectors. Currently employing close to 400 professional and specialist staff, it has 17 offices throughout the UK — with valuation, agency, investment and consultancy teams focused on its key sectors. Christie + Co’s international operations are based in Barcelona, Berlin, Frankfurt, Hamburg, Helsinki, Dusseldorf, London, Madrid, Marseilles, Munich, Paris and Rennes.
STR Global is the new company recently created by leading hospitality research companies Smith Travel Research (STR), Deloitte’s HotelBenchmark™ and The Bench. STR Global provides clients — including hotel operators, developers, financiers and analysts — access to hotel research with regular and custom reports covering over 36,200 hotels in 512 markets in 94 countries. STR Global provides a single source of global hotel performance data, offering concise, accurate and thorough industry research worldwide.
This report contains proprietary information of STR Global Limited, and no part of such data may be reproduced or transmitted, in any form or by any means without the express written consent of STR Global Limited. All requests to reproduce this information must be addressed to info@strglobal.com. Any approved reproduction of data within this report, in whole or part, must be attributed with an accompanying notice of copyright to 'STR Global Limited’. Failure to comply with the preceding guides may result in legal action. Whilst every effort has been made to ensure the accuracy of the data contained in this report, this cannot be guaranteed and neither STR Global Limited nor any related entity shall have any liability to any person or entity that relies on the information contained in this report. Any such reliance is solely at the user's risk. Copyright laws apply.