Europe -  Frankfurt

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Frankfurt is the largest financial centre in continental Europe and ranks among the world’s leading ones. 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 the sixth busiest airport in Europe in terms of traffic with 59.3 million passengers in 2023, whereas 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. The completion of the first construction phase was initially scheduled for 2023. Due to delays caused by the pandemic, the opening will not occur any time before 2026, at the earliest. With a capacity of around 19 million passengers a year through three piers, with a possibility to add a fourth one for a total of 25 million passengers, the new terminal will increase the overall airport capacity to around 91 million passengers.

Frankfurt’s hotel performance prior to the pandemic was stable in terms of occupancy, operating slightly below 70.0%. On the other hand, the average rate declined by around 1.5% from 2016 to 2019, resulting in an average RevPAR decrease of around 2.0%. Following the COVID pandemic, Frankfurt experienced a severe downturn in hotel trading. With measures starting to ease over 2021, Frankfurt managed to recover around 70% of its pre pandemic performance by year-end 2022. Recovery kept a similar momentum over 2023, which saw a substantial increase in occupancy along a slight increase in average rate over 2022. These dynamics, however, were not sufficient to lift RevPAR back to the 2019 levels, as corporate demand and fair activity still remain somewhat subdued and leisure demand is scarce in Frankfurt.  

Frankfurt’s pipeline stands approximately at 4,200 new rooms over the next couple of years, 46% of which fall into the more upscale categories. This marks a potential 12.7% room increase compared to the current supply and is one of the heaviest pipelines among European cities. The largest openings will be the four-star, 385-room Hotel am Rebstockpark (opening Q4 2025), the 380-room Hampton by Hilton Frankfurt Airport Terminal 2 (Q2 2025) and the four-star, 374-room Atlantic Hotel Frankfurt (also Q2 2025).

The investment landscape in Frankfurt remained somewhat quiet over the past twelve months with only five transactions occurring. The most notable ones were the sale of the 299-room NH Frankfurt Morfelden in May 2023, and the sale of the 264-room B&B Hotel Frankfurt-Messe in July 2023 for undisclosed sums, along the sale of the 127-room Macrander Best Western Hotel Offenbach for around €10.4 million (€82,000 per room) in September 2023.

A protracted recovery for Frankfurt, as a result of its strong corporate demand base, as well as the increases in supply over the next couple years, result in a registered 7.2% decrease in hotel values, as indicated in our Hotel Valuation Index 2024, which places values for this market still 16% below pre-pandemic levels. Frankfurt’s substantial dependency on business demand is expected to continue to challenge to some extent the return to normalised performance levels for this market, as MICE and especially corporate demand 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 and values.

Change In Value For Market: (€Euro)

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
Managing Director
[email protected]
  • +44 0 2078787722 (w)
  • +44 0 7725781037 (m)
Julia Dzerkach
[email protected]
  • +44 0 2078787742 (w)
  • +44 0 7912240964 (m)
Clemence Sennavoine
[email protected]
  • ++44 0 7736273439 (m)