For a comprehensive review of the Europe market, click below:
HVS In-Depth Europe Hotel Valuation Index:
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With some 3.6 million inhabitants in 2023, 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.
From 2013 to 2019, Berlin experienced impressive growth in visitation, airport passengers, hotel supply and performance, registering a compound annual growth rate of around 3.5% in visitation during this period, mainly thanks to an increase in international visitation which grew at a compound annual rate of around 4.2%. 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 between 2.5% and 5.0%. This was mainly driven by an increase in occupancy, which grew from a little over 70% in 2013 to just under 80% in 2019, despite the city’s strong pipeline during these years. Over the same period, Berlin’s average rate experienced somewhat slower growth, broadly in line with inflationary changes. Following the pandemic impact, performance started to recover more strongly from the summer of 2022. Overall, 2022 RevPAR recovered to more than 70% of 2019 levels. In 2023, while the average rate of the hotel market returned to the pre-pandemic level in real terms, hotel demand remained more than 5% below the levels seen historically, which resulted in RevPAR recovering to just over 90% of the 2019 level in real terms.
Berlin is expecting to see a new-supply increase of around 8% of existing rooms in the next few years, most of which will fall into the midscale and upper midscale categories (more than 60%). Some future openings include the 198-room Zleep Hotel Berlin Airport (opening in June 2024), the 175-room acora Living the City Berlin Airport (December 2024), the 278-room prizeotel Berlin-City (January 2025) and the 157-room Premier Inn Funkwerk Koepenick (December 2025).
In 2023, transactional activity within Berlin’s hotel market was very limited. There were only two hotel transactions during the year: the sale of the 157-room Premier Inn (bought by Premier Inn Group) and the 190-room Penta Hotel Berlin-Kopenick (purchased by Leonardo hotels), both sold for an undisclosed price.
Following the slower-than-expected recovery in Berlin’s hotel performance, the market’s hotel values remained flat in 2023, compared to the previous year, which resulted in values staying around 3% below the pre-pandemic level.
The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide.
Consequently, the latest HVI analysis may no longer reflect the most current measure of lodging industry strength or the
hospitality investment market.
In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely
insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related
restrictions will be in place, we are updating our analyses on a weekly basis using the most current data.
Additionally, examination of value trends in prior cycles can provide useful information. Historical patterns, together with
an understanding of the market’s current expectations for the eventual recovery of the industry and its performance, can provide
insights on the likely trajectory of decline and recovery for hotel values.
For the Latest Information and Analysis on the Impact of COVID-19Click Here
If you’d like to speak to someone personally to review details of our most current analysis, please don’t hesitate to contact
us directly.
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