Europe -  Frankfurt, Germany

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Frankfurt is the largest financial centre in continental Europe and ranks among the world’s leading financial centres. It is home to the European Central Bank, the Frankfurt Stock Exchange and several large commercial banks. In addition, the city has a long tradition of staging trade fairs and is home to Messe Frankfurt, one of the largest trade fair venues in the world. Owing to its central location within Germany and Europe, Frankfurt is a major air, rail and road transport hub. Frankfurt Airport is one of the busiest airports in the world in terms of passenger traffic (the fourth busiest in Europe) and the city’s central railway station is one of the largest rail hubs in Europe. In 2015, the development of the airport’s third terminal began. Once finished it will enable the airport to welcome around 20 million additional passengers a year; however, since the management of the airport doesn’t expect passenger volumes to return to pre-pandemic levels before 2026, there are currently no plans to inaugurate Terminal 3 any earlier than that.

Frankfurt’s recent hotel performance prior to the pandemic was stable in terms of occupancy, operating slightly below 70%. On the other hand, the average rate declined by around 1.5% on average from 2016 to 2019, resulting in an average RevPAR decrease of around 2% in the same period. Following the COVID outbreak, Frankfurt experienced a severe downturn in hotel trading. The majority of the city’s hotels had to close in March, with some reopening in May or June to capture leisure-driven demand over the summer. As the pandemic flared-up in the latter part of the year, most of the hotels had to close again in the autumn.

Frankfurt has witnessed a couple of recent openings, including the 128-room Gekko House Frankfurt (Jan 2020), the 175-room the niu Coin (Mar 2020) and the 133-room AMERON Frankfurt Neckarvillen Boutique (Aug 2019). The pipeline for the city remains substantial, including, among others, the 430-room Meliá Frankfurt (2021), the 375-room nhow Frankfurt (2021), the 416-room NH Collection Frankfurt Spin Tower (2021), the 155-room Kimpton Frankfurt (2024), the 181-room Hyatt House Frankfurt City (2024), as well as various budget hotels. Around 60% of the new supply falls into upscale and upper upscale positionings.

The investment market registered a decrease of 43% in terms of the number of hotels sold in 2020 compared to the previous year. The majority of the hotels were sold as part of portfolio deals, including the 350-room Leonardo Hotel Frankfurt. The only hotel that was sold as a single asset deal was the 401-room Motel One Frankfurt Messe.

In 2020, Frankfurt registered a decrease in hotel values of just over 13%. Frankfurt’s substantial dependency on business demand is expected to challenge the return to normalised performance levels for this market, as MICE and corporate demand are likely to take longer to recover than leisure demand. Additionally, the substantial new supply is likely to further depress occupancy levels in the short term, although the strategic location of this market and its economic significance help to ultimately anticipate a recovery to pre-pandemic levels of performance.

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%

For more information, please contact:

Sophie Perret, MRICS, MBA
[email protected]
  • +44 20 7878 7722 (w)
Nikola Miljković
[email protected]
  • +44 20 7878-7721 (w)
  • +44 7 593572865 (m)