Europe -  Berlin

With some 3.6 million inhabitants, Berlin is the largest city in Germany and regarded as a city of knowledge and culture. It is home to some of the most prominent universities, sporting events, orchestras and museums. The rapidly evolving metropolis enjoys an international reputation for its festivals, contemporary architecture, nightlife and avant-garde arts. Being a major tourist centre and home to 190 nationalities, Berlin is a focal point for individuals attracted to its liberal lifestyle, urban eclecticism and artistic freedom.

Over the past decade, Berlin has experienced impressive growth in visitation, airport passengers, hotel supply and performance. Figures for 2018 indicate a positive trend with a year-on-year increase of 4.0% in visitation thanks to an increase in international visitors of 6.0%. The city benefits from a strong MICE market, but its largest segment is leisure guests. Owing to its strong focus on creative industries, start-ups and the student population, the city’s profile attracts a young and international crowd.

Berlin recorded strong growth in both occupancy and average rate over the past four years, averaging around 4.0% RevPAR growth. Hotels in Berlin record high occupancy levels owing to strong and constantly growing demand in the leisure and meeting & conference segments. Over the past 10 years, occupancy has grown from around 70% in the mid-2000s to the high 70s in 2018, despite a terrorist attack in December 2016. Meanwhile, Berlin’s average rate performance has been under pressure and remains at the lower end in a Europe-wide comparison, and this dynamic might well continue for the foreseeable future with the openings of more budget and midscale hotels. In 2018, RevPAR increased by almost 7.0%.

The city boasts an impressive pipeline of new hotel projects, most of which will fall into the economy segment, but with significant inventories. Future openings include the 283-room Barcelo Berlin, due at the end of 2019; the 460-room Student Hotel in September 2019; and the 372-room Hard Rock Hotel Berlin in Checkpoint Charlie planned for 2021. We also note the future refurbishment programmes of the Sheraton Grand Hotel Esplanade in 2019 and the InterContinental Berlin in several phases until the end of 2022.

Berlin’s hotel investment market is fairly liquid and sought-after, with most of the transactions taking place as part of a portfolio. The most recent hotel transaction was the 601-room Hilton Berlin in 2018 purchased by Aroundtown from Park Hotels & Resorts for €297 million (€494,000 per room). After two years of relative stability, Berlin recorded an impressive 7.0% growth in hotel values in 2018.

Looking forward, the hotel pipeline is likely to remain strong, putting further pressure on the existing hotels as well as on infrastructure, and most notably, the operation of the airport. Despite this new supply, the long-term forecast looks positive for the German capital, with several upcoming cultural events and the long-anticipated opening of the new Berlin Brandenburg Airport (delayed further until 2021), which should help with capacity issues as well as increasing the appeal of the city to international travellers as its tourism is still heavily focused on domestic visitors. 2019 looks promising as Berlin will be celebrating the 30th anniversary of the fall of the Berlin Wall. Overall, the outlook for the city is positive, as it continues to capitalise on its unique personality.

Change In Value For Market: (€Euro)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Berlin RevPAR Change (€Euro)

Berlin RevPAR (€Euro)

For more information, please contact:

Sophie Perret, MRICS, MBA
[email protected]
  • +44 20 7878 7722 (w)
Magali Castells
[email protected]
  • +44 20 7878-7710 (w)
  • +44 7 850205149 (m)