Hospitality Industry in Germany - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Hospitality Industry in Germany - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Key Highlights

• The hospitality industry in Germany is dynamic and growing. In 2018, the industry witnessed an addition of more than 16,000 rooms and 200 hotels.
• With the increasing number of tourist arrivals, the hospitality industry is projected to grow further in the future. Travelers from abroad spent more than 39 million nights in the country during the first half of 2019, which was 3% more when compared to the same period in 2018, according to Germany’s Federal Statistical Office.
• Domestic tourism is also increasing rapidly in the country. In the first half of 2019, the overall overnight stays by Germans within their home country rose by 4% to around 182 million, as compared to the same period in 2018.
• Germany has been recording an increasing number of leisure trips and business trips. The country is home to a number of companies, with more than 200 brands that are spread across Germany.
• Germany is also home to a large number of independent hotels with more than 20,000 hotels that perform independently and cover all the segments. The international brands have their footprints all over the leading tourist destinations, with a high number of rooms; however, domestic brands have their presence in the tier-II cities, with good market coverage.

Key Market TrendsInternational Brands and their Chains are Occupying a Major Share of the Market

There used to be a huge difference between domestic and international brands in the past years. However, during 2018, the scenario changed. The international brand penetration increased by 15% and reached 131 while the domestic brand penetration was zero and remained at 89. The international chains added more rooms to their existing supply, which was observed to be 7%, whereas domestic chains managed to add 3% more. Mergers and acquisitions helped international brands to record such a growing number in 2018. The new hotel project construction pipeline is also more inclined toward international brand penetration. One of the leading international brands, IHG, announced its plans to add around 85 new IHG brand hotels in the country. If this plan is executed, it may double the brand’s supply in Germany.

Hotel Construction Project Pipeline is Expected to Address the Increasing Demand in the Leading Cities

Berlin has been recording a high number of tourist arrivals since the past few years, followed by Munich and Frankfurt. Berlin welcomed more than 133 million guests in 2018, while Munich welcomed around 8 million guests and Frankfurt welcomed around 7.6 million. In order to accommodate the growing number of visitors, the investors have focused on these cities. Thus, currently, there are more than 200 hotels in Berlin alone. The hotel construction project pipeline for 2018-2021 shows that around 3,000 rooms may be added to the existing supply in Berlin and to the other aforementioned leading cities as well.

Competitive Landscape

The German hospitality industry is dynamic. Unlike most EU countries, Germany has a high international brand presence and is not completely dominated by domestic brands. The independent brands or hotels are equally popular and cover most of the regions. The brand penetration rate is also growing, with the increasing number of domestic and international tourist activities in Germany.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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