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HVS In-Depth Europe Hotel Valuation Index:   2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001

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 years prior to the COVID-19 pandemic, Berlin 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 over 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, performance was badly impacted by the COVID‑19 pandemic. The beginning of 2021 remained tough for the Berlin hotel market, but from 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. These restrictions further impacted Berlin’s hotel market performance throughout the first quarter of 2022, before the market experienced a strong recovery of occupancy levels and average rate throughout the remainder of the year, but especially during the summer months, when strong leisure demand allowed hotels to yield higher rates. Overall, 2022 RevPAR recovered to more than 70% of 2019 levels.

Berlin is expecting to see a new-supply increase of around 14% of the existing rooms in the next few years, most of which will fall into the midscale and upscale classes (more than 80%). Some notable future openings include the 176-room Locke at East Side Gallery, opening in June 2023; the 278-room prizeotel Berlin-City, due to open in May 2023; the 155-room Mondrian Berlin Ku’damm Karree, opening in June 2024; and the 206-room TRIBE Berlin Airtown, due to open in mid 2025.

After increasing over 2019 in both 2020 and 2021, Berlin’s transaction activity slowed in 2022, with mostly single-asset deals and only one portfolio deal. The most notable transactions include the purchase of the Sheraton Berlin Grand Hotel Esplanade by Deutsche Finance Group in a joint venture with Cells Group, which bought the 394-room hotel for approximately €295,000 per room from a joint venture ownership between Blackstone, APG Group and GIC.

Following the significant downturn in travel across Europe in 2020, and a decline hotel values in Berlin of 11.8%, values recovered by 5.0% in 2021 and a further 5.2% in 2022, above the European average of 3.3%, as recorded in our 2023 European Hotel Valuation Index. Overall, Berlin is in a good position to continue its swift recovery owing to its strong leisure demand and good mix of domestic and foreign visitation. Additionally, the long-anticipated new airport, Berlin Brandenburg, opened at the end of 2020, further facilitating access to and from the city.

 

ADR, Demand, Occupancy, RevPAR, and Supply Projections:

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Market Supply Growth

Change In Value For Market: (€Euro)

Berlin RevPAR Change (€Euro)

Berlin RevPAR (€Euro)

For more information, please contact:

Sophie Perret, MRICS, MBA Managing Director [email protected] +44 0 2078787722 (w) +44 0 7725781037 (m)