[PKF city ticker] [ hotel market Munich ] PKF hotelexperts. Hotel market Munich in figures

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1 Photos bottom-up: Ruby Lilly Hotel & Bar München, Steigenberger Hotel München (Steigenberger Hotels AG), THE FLAG MÜNCHEN, 25hours Hotel The Royal Bavarian (Stephan Lemke), Roomers, Hotel Bayerischer Hof (Benjamin Monn) PKF hotelexperts [PKF city ticker] [ hotel market ] Hotel demand on the up again (see p. 2): 217 once again saw an increase in the number of arrivals and overnights in the hotel and bed-and-breakfast hotel industry. Arrivals rose by approx % and overnights by around 12.9 % year on year, while length of stay remained stable at two nights. International demand (see p. 2): In 217, around half of overnight stays in the city of were generated by international visitors. As in the previous year, the main source market was the USA, which accounted for around 6.4 % of overnights, followed by the Arab Gulf states (4.1 %). Growth in bed occupancy rate (see p. 3): Average bed occupancy for hotels and bed-and-breakfast hotels in rose by 4 percentage points, from approx % in 216 to around 6.1 % in 217. Key performance indicators (see p. 4): Despite the positive trend in occupancy (+1.9 %), falling prices (-2.5 %) delivered a slight decline of.7 % in RevPAR year on year (Sample primarily comprises branded hotels in the three- to five-star category; source: BDO LLP, UK). Number of hotels continues to grow (see p. 5): The boom in hotel construction in is continuing; in 217, the brands 25hours (25hours Hotel The Royal Bavarian), Ruby (Ruby Lilly Hotel & Bar München), Roomers (Roomers ) and Steigenberger (Steigenberger Hotel München) opened their first hotels in the city. Numerous further openings are planned for 218 and the following years. Hotel market in figures Hotels Beds 63 k 67 k Arrivals in Hotels 6.5 m 7.3 m Overnights in Hotels 12.9 m 14.6 m Ø Length of stay [Nights] Total overnights 14. m 15.7 m Note Information refers to hotels and bed-and-breakfast hotels Issue

2 Ø length of stay [PKF hotelexperts city ticker] Hotel demand continues to rise A comparison over a five-year period from 213 to 217 showed growth of 26.4 % for arrivals and 24.7 % for overnights, with 217 setting a record in both at approx. 7.3 m arrivals and 14.6 m overnights. Overall, the period between 213 and 217 showed average increases of 6 % and 5.7 % p. a. for arrivals and overnights respectively, while the average length of stay remained steady at 2 nights. ' Nights 16, 2.5 Arrivals / Overnights 14, 12, 1, 8, 6, 4, 2, Arrivals Overnights Ø length of stay 5,764 11, ,5 12, ,391 12,823 6,541 12,936 7,285 14, Information refers to hotels and bed-and-breakfast hotels; number of arrivals and overnights in thousands International demand Half of overnight stays in 217 were generated by domestic visitors, accounting for approx. 5.8 % of total demand. As in the previous year, the USA was the main source market for international visitors with approx. 1 m overnights (6.4 % of total overnights), followed by the Arab Gulf states (4.1 %), the UK (3.5 %) and Italy (3.4 %). ' Overnights / Percentage of total overnights 1, % 4.1% 3.5% 3.4% Arab Gulf States United Kingdom Italy Switzerland Austria Russia China 2.9% 2.6% 2.3% 2.3% USA Information refers to all accommodation facilities; number of overnights in thousands Issue

3 Beds Bed occupancy [PKF hotelexperts city ticker] Supply continues to rise In 217, had 372 registered hotels and bed-andbreakfast hotels with a total of approx. 66,6 beds. While the number of hotels and bed-andbreakfast hotels in the city has risen by 5.7 % over the past five years, the number of beds has soared by 21.6 %, equivalent to an average annual growth of approx. 1.4 % p. a. for hotels but approx. 5 % for beds between 213 and 217. During the period surveyed, the average number of beds per hotel rose from approx. 156 beds in 213 to approx. 179 beds in 217 (+15.1 %) Hotels / Beds per Hotel Hotels Beds Beds per H ,742 56,267 59,545 63,15 66, Note 8, 75, 7, 65, 6, 55, 5, 45, 4, Information refers to hotels and bed-and-breakfast hotels Bed occupancy Bed occupancy in hotels and bed-and-breakfast hotels in fluctuated during the period surveyed; 217 saw a bed occupancy rate of approx. 6.1 % (+4 percentage points year on year), finally breaking the decline since 214. ' % 3, 1 Beds / Overnights 25, 2, 15, 1, 5, Beds Overnights Bed occ. 19,981 2,537 21,734 23,63 24,32 11,714 12,257 12,823 12,936 14, Information refers to hotels and bed-and-breakfast hotels; number of beds and overnights in thousands; calculated values for number of beds and bed occupancy Issue

4 [PKF hotelexperts city ticker] Key Performance Indicators 217 Slight fall in prices The sample of primarily branded three- to five-star hotels in surveyed by BDO LLP, UK, showed an average net room rate of approx. 112 EUR (-2.5 % compared to 216). The discrepancy in April figures from approx. 161 EUR in 216 to 93 EUR in 217 (-42.1 %) was primarily due to bauma, the world s leading trade show for the construction industry, which is held every three years. ADR EUR Jan. Feb. March April May June July Aug. Sep. Oct. Nov. Dec. YTD Change (%) BDO LLP, UK Slight increase in room occupancy The average room occupancy rate for the hotels surveyed was 78.2 % for 217 (+1.9 % year on year). The highest growth by some distance was seen in the holiday month of August, at %; the highest room occupancy of the year was registered in July at approx. 91 % Change (%) 1 Occupancy % Jan. Feb. March April May June July Aug. Sep. Oct. Nov. Dec. YTD BDO LLP, UK RevPAR almost equalled prior year s level In 217, RevPAR for the hotels in our survey reached approx. 88 EUR, virtually equalling the prior year s level (-.7 %). The slight rise in room occupancy virtually compensated for the fall in prices. September showed the highest RevPAR over the period surveyed, at approx. 131 EUR Change (%) EUR Jan. Feb. March April May June July Aug. Sep. Oct. Nov. Dec. YTD RevPAR BDO LLP, UK Issue

5 [PKF hotelexperts city ticker] New concepts, new brands The hotel construction boom in is continuing apace, with further new hotel concepts and brands slated to open in Bavaria s capital in the coming years. They include Hyatt Hotels Corporation, planning the Andaz - Schwabinger Tor as the design brand s first hotel in Germany, and the budget-category Whitbread PLC with plans for two hotels under the Premier Inn brand. Overall, we are aware of plans for around 5 new hotel projects or extensions with a total of over 1, rooms in the city of and even more in the Greater area. The chart shows a selection of hotel projects known to us with planned opening up to and including 219: Hotel projects Project Location Category (Stars) Rooms Opening 7 Days Premium München Flößergasse 6d Andaz - Schwabinger Tor Leopoldstr. / Berliner Str. (Schwabinger Tor) Hampton by Hilton München City Centre West Donnersbergerbrücke / Landsberger Str Hilton Garden Inn München City Centre West Donnersbergerbrücke / Landsberger Str HYPERION Hotel München Truderinger Str MEININGER Hotel München Olympiapark Landshuter Allee 174 n. a Motel One -Messe Willy-Brandt-Platz NYX Hofmannstr Premier Inn München City Zentrum Sonnenstr Premier Inn München City Schwabing Schwabing AMERON Hotel MOTORWORLD München Lilienthalallee Best Western Hotel am Arabellapark München Arabellapark gambino hotel Piazza Maria Institutstr. 4 / Bodenseestr.1 (Pasing) gambino hotel Werksviertel Werksviertel H2 Hotel München Olympiapark Moosacher Str Hampton by Hilton München City Center East Hermann-Weinhauser-Str Motel One Orleansstr. / Rosenheimer Str moxy Werksviertel Novotel München City (extension) Hochstr Category according to international standards; no claim of completeness Research PKF hotelexperts Extended stay concepts are gaining ground Extended stay concepts are becoming increasingly interesting for project developers and investors. In, 219 will see a second hotel opening under the Residence Inn by Marriott brand and in 22 Adina Apartment Hotel will be the first location for the brand in the city. as a growth market airport vicinity The number of hotels around Airport and vicinity is expected to increase in the coming years, with numerous openings planned for the town of Hallbergmoos alone. Overall, we are aware of plans for around 1 hotel projects totalling almost 2, rooms, including prizeotel München-Airport in Hallbergmoos and ibis Styles Hotel at AirSite West. Issue

6 [PKF hotelexperts city ticker] Future prospects The figures for 216 and 217 clearly show the continued positive trend on s hotel market. Ongoing growth in supply has previously been adequately offset by rising numbers of arrivals and overnights. In general, Bavaria s capital benefits from a well-balanced mix of business and leisure travellers and from steady high demand from international visitors, who account for around half of all overnight stays in the city. Net room rates and room occupancy rates also continue to paint a positive picture. Although RevPAR for 217 showed a slight decline of.7 % year on year at approx. 88 EUR, still has high rates that outperform other major German cities. (Sample primarily comprises branded hotels in the three- to five-star category; source: BDO LLP, UK). Demand for hotel accommodation in the city of has remained steadily high for 15 years. In 217 the number of arrivals and overnights once again showed a year-onyear increase, and figures for the first quarter of 218 likewise indicate a continuation of these positive developments. At the same time, however, construction activity in s hotel market is also booming; we are aware of plans for a total of approx. 6 hotels in Greater, with a total of approx. 12, rooms. In geographical terms, s east and north and the vicinity of the airport are the areas most likely to see an increase in hotel openings. The attractiveness of s hotel market is continuing to draw new brands and concepts to the city, including H-Hotels AG with HYPERION Hotel München, Whitbread PLC with two hotels in the budget brand Premier Inn, and Hyatt Hotels Corporation with Andaz - Schwabinger Tor, the first hotel of the lifestyle brand to open in Germany. The extended stay category is likewise growing; for example, TFE Hotels is planning to open Adina Apartment Hotel in 22 as the brand s first hotel in the city. However, increasing numbers of hotel projects are moving to s periphery as a result of high rents and the lack of potential sites in city centre locations. While hotels in those areas have been able to benefit from excess demand in the past, the growth in hotel supply is likely to strengthen competition there in the future. PKF hotelexperts GmbH Maximilianstrasse Phone: +49 () Fax: +49 () research@m.pkf.de Web: For any questions, comments and recommendations, please refer to: Caroline Schade Phone: +49 () caroline.schade@m.pkf.de Worldwide hotel consulting partner for your success. The city ticker is issued by PKF hotelexperts several times per year to provide the reader with a quick overview over the hotel market in major European cities. To be informed at all times, subsribe to the PKF newsletter directly on our website. Disclaimer: This report and the figures, trends and possible reasons for change stated therein are based on careful market research. While PKF hotelexperts endeavours to use the utmost care in assembling this information, we undertake no guarantee or liability for its completeness and up-to-dateness As of May 218 Issue