Europe -  Berlin

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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. 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 couple of years, Berlin has experienced impressive growth in visitation, airport passengers, hotel supply and performance. Figures indicate a positive trend with a compound annual growth rate of around 3.5% in visitation from 2013 to 2019, mainly thanks to an increase in international visitation which grew by an average annual compound rate of around 4.2% over the same period. 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 healthy growth in RevPAR from 2013 to 2019, averaging an annual increase of around 3.0%. This was mainly driven by an increase in occupancy, which grew from a little above 70% in 2013 to just below 80% in 2019. Over the same period, Berlin’s average rate experienced somewhat slower growth, averaging around a 1.5% increase. In 2020, the market experienced a severe decline in RevPAR on the back of the COVID-19 pandemic. Most of the hotels remained closed throughout the year, with the exception of January and February prior to the pandemic and a short summer period. The beginning of 2021 remained tough for the Berlin hotel market, as continued lockdown restrictions resulted in an ongoing depressed RevPAR performance. Throughout the summer, as international travel restrictions eased, the market saw an uplift in performance which continued until the end of the year, when the spread of the Omicron variant led to the tightening of restrictions.

Berlin is expecting to see a new-supply increase of around 15% of the existing rooms in the next couple of years, most of which will fall into the midscale and upscale classes (over 70%). Some notable future openings include the 167-room Locke at East Side Gallery, opening in July 2022; the 284-room prizeotel Berlin-City, due to open in mid-2022; the 177-room Holiday Inn Express Berlin – City Ku'Damm, due to open at the end of 2022; and the 446-room MOXY Central Tower Berlin, due to open at the beginning of 2023.

Surprisingly, Berlin’s transaction activity increased in both 2020 and 2021, compared to 2019, with an equal distribution between single assets and portfolio deals. The most notable transactions include the purchase of the Fürst Hotel by Aggregate Holdings, which bought the 155-room hotel for approximately €470,000 per room from Vivion as part of a three-property portfolio.

Following the significant downturn in travel across Europe in 2020, the Berlin hotel market showed some signs of recovery throughout 2021. As a result, hotel values increased by 5.0% in 2021, as recorded in our 2022 European Hotel Valuation Index. Looking forward, Berlin is in a good position to recover swiftly owing to its strong leisure demand and good mix of domestic and foreign visitation. Furthermore, the long-anticipated new airport, Berlin Brandenburg, opened at the end of 2020, further facilitating access to and from the city.

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: More than -10%

For more information, please contact:

Sophie Perret, MRICS, MBA

[email protected]
  • +44 20 7878 7722 (w)
Nikola Miljković

[email protected]
  • +44 20 7878-7724 (w)
  • +44 7 593572865 (m)
Mathilde De Bona

[email protected]