Hotel Report Edition July 2015 In Focus No half-measures the performance of the big seven in the first six months of the year INFINITY - fotolia.

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1 Edition July 2015 In Focus No half-measures the performance of the big seven in the first six months of the year INFINITY - fotolia.com

2 Index Dear readers, 3 June 2015 in comparison to the previous year 4 Fairmas Trendbarometer 8 In Focus 16 Disclaimer 30 Seite 2

3 Dear readers, Germany is a popular tourist destination its tourist trade is booming. Last year, the country s accommodation enterprises reported a record number of overnight stays for the fifth year in a row. However, minimum wage legislation is now making life more difficult for hoteliers, and many destinations are struggling in what has become a difficult year for trade fairs. Thus, we must ask whether the trend can continue this year. Fairmas and Solutions dot WG have analysed how 2015 has developed so far. How healthy is business in Germany s major destinations of Berlin, Dresden, Dusseldorf, Frankfurt am Main, Hamburg, Cologne/Bonn, and Munich? As always, we analyse how things have developed over the past month and will preview the months to come. We hope you enjoy our and wish you an interesting read! The team of Fairmas (Gabriele Kiessling & Nadine Kilian) Seite 3

4 June 2015 in comparison to the previous year 1 A brief overview of hotel performances at selected German destinations: 1 All the figures (daily collected) quoted are comparisons with those for the previous year, rounded to full amounts Source: Fairmas GmbH/STR Global, Data as of Berlin Occ: 84 %, ADR: 112, RevPar: 95 Business was even better than the positive forecasts for June had predicted. Occupancy rose by 5% while room rates were also much higher (28%) than last year (RevPar: +34%). The Champions League final on June 6, which was completely sold out, ensured a huge surge in demand over the entire weekend. Room rates attained levels comparable with those achieved during the 2006 World Cup final in Berlin. The Hauptstadtkongress (Capital City Congress) from 10 to 12 June 2015 and the EAN Congress (20 to 23 June 2015) were both very well booked. The visit of Queen Elizabeth II at the end of the month also increased room rates. A full crop of public holidays fell in May this year (last year, some of them had been in June). As a result, there has been very good demand for the Cologne/Bonn Occ: 75 %, ADR: 96, RevPar: 73 June also went very well in Cologne and Bonn. Demand was strong in every segment, particularly in the business and conference sectors. The ANGA COM and VICTAM events, held together with the FIAAP and grapas trade shows, took place at the same time (9 to 11 June 2015). The GIFA trade show in Dusseldorf (16 to 20 June 2015) also generated plenty of overflow business in Cologne. Besides this, the spring public holidays were all in May, meaning that there was time for four full business weeks in Cologne and Bonn this June. Major concerts by Helene Fischer (coinciding with the GIFA in Dusseldorf on 15 and 16 June) and AC/DC (19 June) generated additional demand. All in all, occupancy increased by a year-on-year 11% with room rates up 12% (RevPar: +24%). four business weeks just before the school summer holidays, which start in mid-july. Page 4

5 Dresden Occ: 74 %, ADR: 76, RevPar: 56 June was not a particularly successful month in Dresden last year but things were slightly better this time around. Although occupancy stagnated, room rates did increase by 3%. Business and meeting sector demand rose slightly, since all the public holidays fell in May. This meant higher room rates than in the leisure and group sectors. While there was slightly less group sector business in June, more individual guests did arrive, which helped raise room rates somewhat. And even if no trade fairs or congresses were held in Dresden this June, there was still a lot going on in the city, with the BRN event, the movie nights on the banks of the Elbe, and the Elbhangfest all taking place. Dusseldorf Occ: 74 %, ADR: 116, RevPar: 83 June was a very good moth indeed in Dusseldorf, as in many other destinations, particularly in terms of room rates (ADR: +32%). Very high room rates were recorded thanks to the GIFA A-list trade fair (held every four years) that ran from June 16 to 20. This year, Corpus Christi also fell in June, so that 2½ business weeks were available for corporate and MICE business in addition to the trade fair. The DÖAK AIDS Congress was held in the last week of June (24 to 27 June 2015) and also lifted room rates. Frankfurt Occ: 75 %, ADR: 121, RevPar: 92 June in Frankfurt was very healthy in terms of all three key figures (Occ: +14%, ADR: +31%, and RevPar: +50%). This year, the leading ACHEMA trade fair (held every three years) ran from 15 to 19 June 2015 and generated extremely high room rates. Moreover, there were no further public holidays or school vacations in June except for just one day (Corpus Christi) in the first week of June. The second half of the month was marked by additional individual pick-up, especially from the corporate sector. Hamburg Occ: 83 %, ADR: 112, RevPar: 95 Overall, June in Hamburg was positive in terms of all three key parameters (Occ: +2%, ADR: +4%, and RevPar: +7%). The IAPH International Port Congress from 1 to 5 June (a conference held at rotating venues) ensured additional bookings in the first week of June. At the same time, there was some good MICE business and particularly high demand in the leisure segment thanks to late inquiries. Munich Occ: 83 %, ADR: 127, RevPar: 106 The month of June was a highpoint in Munich. There were far fewer public holidays than in June Page 5

6 2014, and only one week of the Whitsun school holidays. This allowed much more time for business sector trade than last year. However, Ramadan began on 18 June 2015, earlier than last year, which meant that guests from Arab countries departed earlier. The G7 summit at Schloss Elmau only generated additional business for those hotels near the airport. Worthy of note in this case was the layover business caused by the closure of airspace. Besides this, two trade fairs were held ( Intersolar Europe and the Laser World of Photonics ), which were both marked by very healthy short-term demand (last year only the Intersolar took place in June). In June, the Munich hotel industry enjoyed an occupancy rise of 5% while room rates increased by 3%. This meant a 7% improvement in RevPar on a year-on-year basis. Page 6

7 Overview of all destinations Hotel Performance June 2015/2014* Occupancy in % Average Daily Rate in Euro RevPar in Euro Var. Var.% Var. Var.% Var. Var.% Berlin 84,2% 80,3% 3,9 4,9% 112,8 88,0 24,8 28,2% 95,0 70,7 24,3 34,4% Cologne / Bonn 75,7% 68,0% 7,7 11,3% 96,5 86,5 10,0 11,6% 73,1 58,8 14,2 24,2% Dresden 74,2% 73,5% 0,7 1,0% 76,1 74,1 2,0 2,7% 56,5 54,5 2,0 3,7% Dusseldorf 72,1% 66,3% 5,8 8,7% 116,1 88,2 27,9 31,6% 83,7 58,5 25,2 43,1% Frankfurt 75,9% 66,7% 9,2 13,8% 121,4 92,4 29,0 31,4% 92,1 61,6 30,5 49,5% Hamburg 85,3% 83,6% 1,7 2,0% 112,2 107,5 4,7 4,4% 95,7 89,9 5,8 6,5% Munich 83,2% 79,6% 3,6 4,5% 127,7 124,5 3,2 2,6% 106,2 99,1 7,1 7,2% *Source: Fairmas GmbH / STR Global, based on data from participants with daily data entry, Data as of Legend OCC ADR RevPar Occupancy Average Daily Rate (net rooms revenue) Revenue per available Room (net logistics revenue per available room) 49,5% 43,1% 28,2% 34,4% 24,2% 31,6% 31,4% 4,9% 11,3% 11,6% 1,0% 2,7% 3,7% 8,7% 13,8% 2,0% 4,4% 6,5% 7,2% 4,5% 2,6% Berlin Cologne / Bonn Dresden Dusseldorf Frankfurt Hamburg Munich Occ ADR RevPar Page 7

8 Fairmas Trendbarometer A peek into the future in detail: Berlin The basic conditions for July are similar to last is expected, as is a 0.9% rise in room rates. A very year s. The first two weeks of July are still good small increase in RevPar (nearly 2%) is predicted. business weeks. The school summer holidays start in mid- July, and like last year, the Bread & Butter, Panorama and Fashion Week events are all taking place at the beginning of the month. These are a number of very successful inner city events, so there will be some overflow to the hotels outside the centre. Last year, Berlin was particularly interesting because of the live Fig.1: Trendbarometer Berlin 2015 Trend versus last year Last Year July 0,8% 0,9% August 1,8% -2,9% 3,7% September 0,6% -0,9% -10,1% -10,9% Occ Adr RevPar Source: Fairmas GmbH / Data as of public TV screenings during the FIFA World Cup Currently, August is still difficult to weigh up. The and the visit of the German national team after their school summer vacation runs throughout the victory in the final. This year though, there are more whole month, so that hardly any business sector trade can be expected. However, August has queries from large groups, as well as some convention inquiries. The Maccabi Games (the Jewish Olympics ) will be held in the city from 27 July Hoteliers are hoping the same for The pric- been a strong leisure-sector month in recent years. to 5 August This will mean a lot of pick-up es being charged for weekend offers are slightly for the city s hotels. A 0.8% increase in occupancy higher than last year. However, leisure bookings in Page 8

9 particular are often made very late. The Maccabi Festival Tempelhof (12 to 13 September 2015), as Games ( Jewish Olympics ), which are still running well as two concerts by U2 (24 and 25 September), at the beginning of the month, could be a driver and a variety of smaller congresses. However, Berlin hoteliers nevertheless expect setbacks in all key for room rates. At the end of August, the Long Night of the Museums is back (in 2014 it was held parameters (Occ: -0.9%; ADR: -10%; and RevPar: in May), and this weekend is expected to be very -11%) due to the absence of Innotrans, though well-booked. This fiscal year has so far been very these falls will not be as dramatic as they could good for hotels in Berlin, which is giving hoteliers have been, thanks to other decent developments. grounds for optimism. While occupancy is expected to decline by 3%, room rates will increase Cologne/Bonn by around 4%. August should therefore provide a July will again be somewhat weaker due to the 0.6% year-on-year improvement in RevPar. school summer holidays, which will also lead to poor corporate business. Demand has been quite September is generally the best month in Berlin. low so far. However, there will certainly be three This year, however, the InnoTrans trade show will high-priced weekends in Cologne. Christopher be absent. It takes place every two years and regularly generates very high room rates. However, the (Cologne Lights) event on 11 July 2015 and the Street Day on 5 July 2015, the Kölner Lichter IFA, which is held every year, will be well attended Amphi Festival (25 to 26 July 2015) are expected and the room rates for this are already encouragingly high. The Berlin Marathon is always very popular. There will also be business groups and conference sector business. The expected individual trade will only come at short notice. The large number of smaller events in the city should not be underestimated, either. These include EU- ROBASKET (at the beginning of September), the Lollapalooza Fig.2: Trendbarometer Cologne/Bonn 2015 Trend versus last year Last Year July -4,6% 0,3% August -4,3% -4,1% 4,1% September -0,2% -2,2% -10,4% -12,4% Occ Adr RevPar Source: Fairmas GmbH / Data as of Page 9

10 to provide good pick-up, even though bookings have so far been very restrained. Weekday demand is still very poor. The Cologne hoteliers are therefore assuming a 5% drop in occupancy. In contrast, room rates are expected to rise by 0.3%, which would mean a drop of more than 4% in RevPar. Fig.3: Trendbarometer Dresden 2015 Trend versus last year July Last Year 8,0% 3,1% August -0,8% 3,1% September 2,2% -2,6% 3,7% 1,0% Occ Adr RevPar Source: Fairmas GmbH / Data as of ,3% Demand for the gamescom event is already very high this year, even at such an early stage. In addition, the ESL Counter-Strike (computer gaming tournament) is taking place on 22 and 23 August at the Lanxess Arena. Demand for this event is very good. The spoga+gafa gardening trade show will begin early (30 August) this year. Cologne hoteliers expect a 4% room rate increase. However, occupancy is set to remain a good 4% below the figures for the same month last year. RevPar would thus be 0.1% lower than last year. The outlook in Cologne and Bonn for September is not good. The Photokina trade fair is held only every two years and will be missing from the 2015 calendar. This makes itself very clearly in the advance booking situation and the room rates. In addition, the spoga + gafa events have shifted a little into August. This all impacts negatively on September ADR. There are also school summer holidays in most of Germany s federal states in August so local hoteliers are therefore expecting very little corporate business. Overall, a 2% decline in occupancy is foreseen in Cologne and Bonn. Room rates look likely to fall by as much as 10%. This will cause a decline of more than 12% in RevPar. Dresden July looks set to develop positively, just as June has already done (and not only due to summer weather). Traditionally, a lot happens in the city in summer. For example, the seventh Dresden Schlössernacht (Palaces by Night) event is being held in July. The Holi Festival of Colours will be held on 4 July 2015, while the US Car Convention is taking place from 10 to 12 July Helene Fischer is also holding two of her very popular concerts at the stadium (on 7 and 8 July), and a lot of Page 10

11 pick-up is expected from the Kaiser Mania event year, there were even two major congresses in the on 31 July Hoteliers expect an 8% year-onyear rise in occupancy and an ADR rate increase thing that will put pressure on room rates in turn. city, though these will be absent this year, some- of 3% over This would mean an 11% upturn Everything would seem to depend on urban tourism again, but this business is too often booked in RevPar. Nevertheless, summer bookings always depend on the weather and are made at very short at the last moment and greatly depends on the notice. Still, prior booking levels are giving rise to weather. The Dresden hotel industry is very cautiously predicting a drop of nearly 3% in occupancy optimism. and a room rate increase of nearly 4%. That would August in Dresden is still difficult to assess. The mean a gentle (yet still pleasing) year-on-year Rev- Kaiser Mania event ends on the first of the month, Par increase of 1%. and overall leisure demand will greatly depend on the weather. Additional pick-up can be expected Dusseldorf from the 17th Dresden Stadtfest (City Festival), So far, July in Dusseldorf has been looking negative with a 4% decline in RevPar, which can be at- being held from 14 to 16 August. The IEEE International Symposium on Electromagnetic Compatibility and EMC Europe events take place 8%). Last year, the school summer holidays starttributed to the negative occupancy figures (down jointly in Dresden from 16 to 22 August, and could ed a week later than in 2015, generating good lead to better room rates. While a near 1% drop in occupancy has been forecast, room rates are set to rise by 3% on a year-on-year basis. That would mean an increase in RevPar of over 2%. September in Dresden is so far set to be similarly unpredictable. Up to now, no significant congresses and meetings are expected during the month. Last Fig.4: Trendbarometer Dusseldorf 2015 Trend versus last year Last Year July -7,7% 4,3% August -3,7% -2,7% 8,3% September 5,4% -2,9% -2,2% -5,0% Occ Adr RevPar Source: Fairmas GmbH / Data as of Page 11

12 corporate and conference business in Dusseldorf in the first week of July. Nevertheless, it is assumed that July will still develop positively overall, due to the additional leisure sector demand. So far, the forecast for August has also been healthy (RevPar up 5%), primarily due to the positive (+8%) ADR trend. This year, the school summer holidays end in mid-august, which means that more corporate business can be expected in the last two weeks of the month. September is also viewed with little optimism and a drop of 5% in RevPar is expected, due to the negative trends in occupancy (Occ: -3%) and ADR (-2.2%). Here, it generally remains to be seen just how the month will develop. In some cases, options and inquiries are still being received. Experience has shown that the overall result will still be corrected upwards, because the Expopharm event and the FIP Congress (a convention held at rotating venues, which did not take place last year) will be running in the last week of September. These events have already been the subject of healthy levels of inquiries. Frankfurt The forecasts for July are overall poor, with a decline of 5% in occupancy predicted, leading to a 4.7% lower RevPar, despite the positive room rates (ADR up 0.2%). The positive ADR forecast is due to the strong demand in the conference and business sector because there are no school holidays at this time in the two neighbouring federal states of Baden-Wuerttemberg and Bavaria. The upcoming Jehovah s Witnesses Congress on 10 July will also lead to a good volume of group sector business. However, it remains to be seen whether the overall result will need to be corrected upwards. The forecast so far for August is a negative one (RevPar: down 0.2%), in spite of positive trends in ADR (up 2.4%). Despite the summer break, there has so far been a stable basis of group sector bookings, including the first construction work at the IAA in September. Everything else will remain to be seen because it is still too early to make any predictions about individual pick-up. However, the trends so far this year have been pleasing. As at many other destinations, September will be marked by poor development overall with a 2% decline in RevPar. Experience has shown that conference and corporate inquiries in a month with the IAA taking place (17 to 27 September 2015) are fewer than when the Automechanika was held last year (16 to 20 September 2014). The Automechanika is considered the leading trade fair and enjoys reports higher room rates than the ILO, even if the latter does last much longer. Hoteliers expect that the occupancy figures will still be corrected upwards. Page 12

13 Fig.5: Trendbarometer Frankfurt 2015 Trend versus last year Last Year July -4,9% 0,2% August -4,7% -2,5% 2,4% September -0,2% -2,9% 0,9% -2,1% Occ Adr RevPar Source: Fairmas GmbH / Data as of Hamburg: The July forecast for Hamburg is very positive in terms of all three parameters (Occ: +3%, ADR: +2.7%, and RevPar: +5.8%). This year, the German Derby horse race is being held over the last week of June and the first week of July. Last year, this event took place entirely in June. The rescheduling of the Schlagermove event to July will have a positive impact on room rates and occupancy over the weekend. There is also hope of increased leisure sector demand. Overall, it remains to be seen just how July will evolve. So far, the forecast for August has been healthy (RevPar up 1.2%), mainly due to the positive (1.2%) ADR trend. August kicks off with the CSD (Christopher Street Day) party weekend, and then continues with a number of street festivals and smaller celebrations in various districts of Hamburg, which will generate a particularly high demand this year. Furthermore, the month promises a number of sporting highlights including the Vattenfall Cyclassics on 23 August 2015 (last year it was on 24 August) and it is rounded off with the Stuttgart Weindorf (Wine Village) at the Rathausmarkt, starting 26 August. The overall development for September is again set to be very poor (RevPar: -7.4%), mainly due to the negative room rate forecast (ADR: -8.4%). Fig.6: Trendbarometer Hamburg 2015 Trend versus last year Last Year July 3,0% 2,7% August 5,8% 0,0% 1,2% September 1,2% 1,1% -8,4% -7,4% Occ Adr RevPar Source: Fairmas GmbH / Data as of Page 13

14 The high-priced SMM trade fair, which takes place Because Ramadan is earlier this year, many more only every other year, will be absent this September. This is the main reason for the very high fall in However, there will be fewer visitors from Euro- Middle Eastern guests can be expected in August. room rates. The Wind Energy trade fair also took pean countries. A significant increase in ADR is place last year. Highlights of September 2015 will expected as they book higher (and thus more expensive) room categories than European travellers include the Seatrade Fair (9 to 11 September) and the subsequent Hamburg Cruise Days (12 and 13 do. Room rates are expected to rise more than September), which also took place last year and 8% over last year s. However, occupancy is set to which will generate different room rate levels. The decline by 3%. RevPar would then be 5% higher later start of the Alstervergnügen event (it now than in the same month last year. begins in September this year) may not be enough to compensate for the lack of the two trade fairs. On the other hand, it looks so far as if September will much less rosy in Munich. This year, the EAS Munich Congress will be absent. Advance bookings for July is not expected to herald in any major changes compared to last year. Although occupancy is fair, which only takes place every three years, is so the Oktoberfest are still very weak. The IBA trade likely to decline by 2%, room rates should rise by far well below expectations. Thus, room rates are almost 5%. This would boost RevPar by 2%. There currently still quite low in both cases. Occupancy, is a lack of convention business, and although the however, is slightly higher than last year and is 25th Training Week for Practical Dermatology and Venereology will be good for room rates, it will weaken occupancy. The early end of Ramadan in the last third of the month (20 July 2015) gives hope for increased business from the Arab world with premium room rates in the higher price categories. However, preliminary bookings are still well below original expectations. Fig.7: Trendbarometer Munich 2015 Trend versus last year July Last Year -2,2% 4,7% August 2,4% -3,3% 8,3% September 4,7% 1,6% -7,4% -5,9% Occ Adr RevPar Source: Fairmas GmbH / Data as of Page 14

15 expected to rise by just below 2%. The room rate will fall by over 7%. That would mean a 6% drop in RevPar in September. Page 15

16 In Focus No half-measures the performance of the big seven in the first six months of the year The tourism industry is booming in Germany. In 2014, hotels and B&Bs reported a record number of annual overnight stays for the fifth year in a row: the Federal Statistical Office recorded 424 million overnight stays by tourists and business travellers. The total number of visitors again increased by three percent compared to Will this trend continue in 2015? And that despite the introduction of the minimum wage and a global situation that is politically and economically full of crises and risks? We analyse the figures for the most important German destinations: Berlin, Dresden, Dusseldorf, Frankfurt am Main, Hamburg, Cologne/Bonn and Munich. How do the first six months of 2015 measure up? Here is one fact in advance: a distance of just 50 km (around thirty miles) separates the achiever of the year from the city in last place. The basis for the analysis by Solutions dot WG is data from Fairmas. (The percentages used in the text relate to changes over the corresponding figures for 2014). Berlin Du bist so wunderbar, Berlin ( You are so wonderful, Berlin ) goes the song; the German capital intrigues both Germany and the rest of the world alike. There are many reasons for this, ranging from the city s advanced culture and its subculture, its relaxed atmosphere and its authentic historical places. The German capital is still No. 1 on the list of top destinations for international visitors to Germany and it plays in the big league of Europe s most popular cities for tourists, alongside London and Paris. Arrivals and overnight stays have more than doubled since This development is unprecedented among Europe s capital cities. The New Year started successfully in the cosmopolitan tourist and convention city; occupancy even increased by 3% in January. This was made possible Page 16

17 by employee-friendly long weekends at the turn of the year, as well as by good occupancy figures for the January trade shows: the Grüne Woche, Panorama and the Fashion Week events. After a rather disappointing February without the Bautec trade fair and the Krebskongress (Cancer Congress), March began with the ITB tourist fair, with many guests staying on for longer than in previous years. The annual congress of the Society for Pneumology and Respiratory Medicine, as well as the WASSER BERLIN INTERNATIONAL event (congress and exhibition) also took place during Fig.8: Hotel Performance Berlin January-June 2015/2014 Hotel Performance Berlin 2015/2014* Occupancy Average Daily Rate in Euro RevPar in Euro Var. Var.% Var. Var.% Var. Var.% January 57,2% 55,3% 1,9 3,4% 82,6 85,1-2,5-2,9% 47,2 47,1 0,2 0,4% February 65,6% 63,3% 2,3 3,6% 93,8 95,6-1,8-1,9% 61,5 60,5 1,0 1,7% March 74,0% 69,4% 4,6 6,6% 91,9 89,5 2,4 2,7% 68,0 62,1 5,9 9,5% April 75,7% 74,2% 1,5 2,0% 83,5 78,2 5,3 6,8% 63,2 58,0 5,2 8,9% May 81,1% 82,6% -1,5-1,8% 97,0 96,8 0,2 0,2% 78,7 80,0-1,3-1,6% June 84,2% 80,3% 3,9 4,9% 112,6 88,0 24,6 28,0% 94,8 70,7 24,1 34,2% 1.Half-Year 73,0% 71,1% 1,9 2,7% 94,3 89,0 5,3 6,0% 68,8 63,3 5,6 8,8% *Source: Fairmas GmbH / STR Global, based on dates of participants with daily data input - state explanation OCC ADR RevPar Occupancy Average Daily Rate Revenue per available Room 34,2% 28,0% 3,4% 3,6% 0,4% 1,7% 6,6% 2,7% 9,5% 8,9% 6,8% 2,0% 0,2% 4,9% 2,7% 6,0% 8,8% -2,9% -1,9% -1,8% -1,6% January February March April May June 1.Half-Year Occ ADR RevPar Source: Fairmas GmbH /Data as of Page 17

18 the month, so that occupancy and ADR climbed upwards. Much better group business than last year, increasing tourist arrivals and the Easter holiday in March all led to a 7% increase in occupancy, with ADR up by 3% and RevPar rising by as much as 10%. A highly positive trend, thanks to demand in the group area, high-priced business and convention trade, which the DDG Congress and ConhIT would help continue into the following month. As the ILA is not held in odd years, the merry month of May was marked by a question mark right from the start. In addition, in 2015, the holidays and long weekend around the first of May, Ascension and Whitsun all fell within May itself, thus making the month difficult for business guests. Occupancy and RevPar were down by 2% while ADR stagnated. However, there was still no reason for long faces because June had a number of bright spots in a row: the Champions League final, when room rates reached similar heights to those achieved during the 2006 World Cup final, the Hauptstadtkongress (Capital City congress), the EAN Congress, the visit by Queen Elizabeth II, and four complete business weeks. ADR soared by 28% and RevPar climbed to a record level of +34%. For Berlin, 2015 has been a successful year so far. Occ, ADR and RevPar all rose. The increase in room rates (over 6%) has been particularly gratifying. Are there signs at last of a reverse in the trend towards basement prices that the industry has long been waiting for? We hope so and will remain focused on it! Dresden Even though Dresden has been the subject of many negative headlines in recent months, tourism has developed positively all-round. There had been cancellations by tourists, especially from abroad, following the start of the anti-islamic Pegida demonstrations in the Saxon capital. Overall, Dresden recorded more than 2.1 million visitors last year, an increase of 8.6%. The number of registered overnight stays was a good 4.4 million, of whom 800,000 came from abroad. The number of overnight stays therefore rose by 7.6% above the previous year s figure. This positive trend continued in January with an occupancy increase of 8% while ADR rose by 5%. This led to an 13% upsurge in RevPar. Industry experts have justified this chiefly by the attempt to hike up room rates to compensate for the statutory minimum wage that has recently been introduced. February meant major losses for the Dresden hoteliers, both in the corporate and the leisure business sectors. There were only a few conferences and meetings, as well as two weeks of school winter holidays in the city (occupancy was down 9%, ADR fell 2%, and RevPar dropped by 11%). There was time for an upward trend in March (something which then did occur); the figures were agreeably positive, Page 18

19 though they weakened again in April. The strong leisure business expected at Easter did not materialize due to the weather and there were also fewer conference and group bookings, as well as a lack of corporate business. May finally gave the Dresden hoteliers grounds for optimism: The holiday weekends generated better performance figures. Added to this, the G7 summit of finance ministers took place in the city at the end of the month and there was a sold-out AC/DC concert. There were no major trade shows in Dresden in June, but there were some other attractive events, Fig.9: Hotel Performance Dresden January-June 2015/2014 Hotel Performance Dresden 2015/2014* Occupancy Average Daily Rate in Euro RevPar in Euro Var. Var.% Var. Var.% Var. Var.% January 36,3% 33,6% 2,7 8,0% 68,6 65,5 3,1 4,7% 24,9 22,0 2,9 13,1% February 38,8% 42,5% -3,7-8,7% 64,1 65,7-1,6-2,4% 24,9 27,9-3,1-10,9% March 53,9% 52,8% 1,1 2,1% 65,5 65,3 0,2 0,3% 35,3 34,5 0,8 2,4% April 62,3% 67,1% -4,8-7,2% 69,4 66,9 2,5 3,7% 43,2 44,9-1,7-3,7% May 76,2% 75,9% 0,3 0,4% 80,6 78,5 2,1 2,7% 61,4 59,6 1,8 3,1% June 74,2% 73,5% 0,7 1,0% 76,0 74,2 1,8 2,4% 56,4 54,5 1,9 3,4% 1.Half-Year 57,3% 57,7% -0,4-0,7% 72,2 70,5 1,7 2,4% 41,4 40,7 0,7 1,7% *Source: Fairmas GmbH / STR Global, based on dates of participants with daily data input - state explanation OCC ADR RevPar Occupancy Average Daily Rate Revenue per available Room 13,1% 8,0% 4,7% 2,1% 0,3% 2,4% 3,7% 2,7% 3,1% 2,4% 3,4% 2,4% 0,4% 1,0% 1,7% -8,7% -2,4% -10,9% -7,2% -3,7% -0,7% January February March April May June 1.Half-Year Occ ADR RevPar Source: Fairmas GmbH /Data as of Page 19

20 including the movie nights on the banks of the Elbe and the Elbhangfest. Although occupancy did stagnate, room rates managed to improve by 3%. Besides this, there was slightly less group sector business in June, but more individual guests did arrive, which influenced room rates significantly. Is it due to the tarnished image of the city or the exhibition and congress business that was low on highlights? Is it due to the tarnished image of the city or the exhibition and congress business that was low on highlights? Dresden s performance in the first half of the year was mixed. While occupancy was in the red (-1%), ADR and RevPar (up 2.4% and 1.7%, respectively) were satisfactory but not overwhelmingly so. Dusseldorf Although Dusseldorf s tourism professionals entered the New Year with a successful 2014 annual balance sheet (the fifth record tourist year in a row), 2015 has so far remained well below industry expectations. January already showed itself to be unsettled. While the PSI trade fair did bring business to the city, the IMA was cancelled by the organizer stagnation in ADR (-0.3%) makes nobody happy. But there was worse to come, because RevPar fell by 33% in February, mainly influenced by an extremely negative development in room rates (ADR down by 25%). Dusseldorf was sorely missing the Euroshop trade fair (which is held on a three-year cycle). Four complete business weeks (Carnival festivities took place in February) and overflow business from the IDS in Cologne, as well as the Pro- Wein and Beauty events, finally meant healthy occupancy figures in the city. However, there was only a brief sigh of relief, since business in April really went downhill with a 22% fall in RevPar, mainly due to the huge drop in ADR (down 21%). This is largely attributable to the absence of the important Wire & Tube trade show (which is only held every two years) in Hoteliers hoped in vain for an improvement in leisure sector business at Easter (Occ: down 0.5%). May was not a merry month occupancy weakened by 13% and ADR fell by a dramatic 38%. The timing of the public holidays this year resulted in far less corporate and MICE business than in There were no major trade shows and events, which resulted in a major (46%), fall in RevPar. Hopes for June were not thwarted, as the important GIFA trade show (held every four years) and the DÖAK AIDS congress finally resulted in the high room rate levels that had been hoped for. This year, Corpus Christi also fell in June, so that 2½ business weeks were available for corporate and MICE business. The first six months of the year in Dusseldorf provide an almost perfect example of how much the industry depends on the trade fair and convention business. The city, which is accustomed to success, suffered setbacks in terms of all three key Page 20

21 parameters: Occ -1.3%, ADR -12%, and RevPar -13%. Just as before, weekends are difficult times for the city s hotels, because the number of tourists on city breaks visiting Dusseldorf as a destination is not nearly as high in Berlin, Munich or Hamburg. Nevertheless, Dusseldorf, with its mix of cosmopolitan lifestyle and Rhineland joie de vivre, still has much to offer leisure guests. Frankfurt am Main The metropole on the Main recorded a successful tourism year in With more than eight million Fig.10: Hotel Performance Dusseldorf January-June 2015/2014 Hotel Performance Dusseldorf 2015/2014* Occupancy Average Daily Rate in Euro RevPar in Euro Var. Var.% Var. Var.% Var. Var.% January 66,4% 64,9% 1,5 2,3% 95,3 95,6-0,3-0,3% 63,3 62,0 1,2 2,0% February 62,8% 70,7% -7,9-11,2% 95,1 126,9-31,8-25,1% 59,7 89,7-30,0-33,4% March 73,0% 68,0% 5,0 7,4% 111,6 108,7 2,9 2,7% 81,5 73,9 7,6 10,2% April 59,3% 59,6% -0,3-0,5% 88,9 112,9-24,0-21,3% 52,7 67,3-14,6-21,7% May 65,1% 75,1% -10,0-13,3% 88,7 142,4-53,7-37,7% 57,7 106,9-49,2-46,0% June 72,1% 66,3% 5,8 8,7% 116,0 88,2 27,8 31,5% 83,6 58,5 25,2 43,0% 1.Half-Year 66,5% 67,4% -0,9-1,3% 100,0 113,2-13,2-11,7% 66,5 76,3-9,8-12,8% *Source: Fairmas GmbH / STR Global, based on dates of participants with daily data input - state explanation OCC ADR RevPar Occupancy Average Daily Rate Revenue per available Room 43,0% 31,5% 2,3% 2,0% 7,4% 10,2% 2,7% 8,7% -0,3% -0,5% -1,3% -11,2% -13,3% -11,7%-12,8% -25,1% -21,3%-21,7% -33,4% -37,7% -46,0% January February March April May June 1.Half-Year Occ ADR RevPar Source: Fairmas GmbH /Data as of Page 21

22 overnight stays, corresponding to an increase of 7.3 percent, the hotels recorded more visitors than ever before. The trade fairs, the companies based in the city, the cultural institutions and Frankfurt s international airport all ensured that Frankfurt had Germany s highest proportion of both foreign tourists and business travellers. The New Year began quietly, as January business was below that of the previous year. Strong event and individual tourist business in the first two weeks of the month was not enough to counteract the setbacks in occupancy and room rate (Occ: -3%, ADR: -3%). However, February did have its positive side, something for which the Paperworld and Ambiente trade fairs, as well as the Carnival festivities, were mainly responsible. This development also continued into the next month. The ISH in particular (held on a two-year cycle) gave rise to a far higher level of room rates (up 4%). In April, however, there was no Light & Building trade fair, though Easter business was particularly satisfactory, leading to a positive overall result (RevPar: up 4.4%). There was a similarly balanced picture in May: While corporate business fell, the Techtextil/Techprocess trade show did record a room rate increase of 4%. However, RevPar still remained 1% below last year s level. June in Frankfurt was positive in terms of all three key performance indicators (Occ: +14%, ADR: +31%, RevPar: +50%), thanks to the important Achema trade fair (held every three years) and additional individual pick-up, particularly in the corporate sector. Hamburg In 2014, a further successive record year ensured a solid 11th place in the ranking of European cities. Hamburg has now left such destinations as Venice, Stockholm and Brussels behind. And January was also positive, with occupancy 3% higher. Many hoteliers were able to record very good preliminary bookings, as well as a significant growth in demand in the MICE segment at the start of the year. There was also growth in February (occupancy up 4% and RevPar up 6%) and in March. Due to very strong national (INTERNORGA) and international fairs (a medical congress) and more days of events than the previous year, Hamburg enjoyed a 4% increase in room rates and a correspondingly high demand in the MICE sector. April in Hamburg was marked by generally positive developments (Occ up by 0.5%, ADR by 5% and RevPar by 6%). The very strong International Aircraft Interior trade show and the annual Haspa Marathon were largely responsible for the growth in room rates. The only downside was the cool and wet Easter, which inhibited the desire to travel and led to a decline of almost 3% in occupancy, though ADR did increase by 2%. As usual, this year s international Hafengeburtstag (Harbour Birthday) in May was able to generate high levels Page 22

23 of demand. Occupancy figures for Whitsun and Ascension were down on last year s. The Röntgenkongress (Congress of Radiology), which was held for the last time in Hamburg, generated high levels of room rates. June was also positive with the IAPH International Port Congress, good MICE sector trade and particularly high demand in the leisure segment. It almost seems as if the hosts in Hamburg are completely spoiled by success. With Hanseatic stability, numbers are rising with a continuity which even amazes industry insiders. Fig.11: Hotel Performance Hamburg January-June 2015/2014 Hotel Performance Hamburg 2015/2014* Occupancy Average Daily Rate in Euro RevPar in Euro Var. Var.% Var. Var.% Var. Var.% January 60,8% 58,9% 1,9 3,2% 93,3 92,8 0,5 0,5% 56,7 54,7 2,1 3,8% February 72,6% 70,0% 2,6 3,7% 95,5 93,8 1,7 1,8% 69,3 65,7 3,7 5,6% March 78,5% 77,6% 0,9 1,2% 106,2 102,0 4,2 4,1% 83,4 79,2 4,2 5,3% April 80,5% 80,1% 0,4 0,5% 115,5 109,8 5,7 5,2% 93,0 87,9 5,0 5,7% May 83,2% 85,5% -2,3-2,7% 119,4 117,5 1,9 1,6% 99,3 100,5-1,1-1,1% June 85,3% 83,6% 1,7 2,0% 112,1 107,5 4,6 4,3% 95,6 89,9 5,8 6,4% 1.Half-Year 76,8% 76,2% 0,6 0,8% 108,1 105,2 2,9 2,8% 83,0 80,2 2,9 3,6% *Source: Fairmas GmbH / STR Global, based on dates of participants with daily data input - state explanation OCC ADR RevPar Occupancy Average Daily Rate Revenue per available Room 3,2% 3,8% 3,7% 0,5% 1,8% 5,6% 4,1% 5,3% 5,2% 5,7% 1,2% 0,5% 1,6% 2,0% 4,3% 6,4% 0,8% 2,8% 3,6% -2,7% -1,1% January February March April May June 1.Half-Year Occ ADR RevPar Source: Fairmas GmbH /Data as of Page 23

24 Cologne/Bonn The conurbation on the Rhine experienced a boom in visitor numbers in A total of 5.47 million overnight stays were recorded a whopping 13% increase. Cologne shapes up well in any European comparison: it occupies 25th place in the ranking of the 100 most popular city break destinations. With so much potential, a breather was called for in January; occupancy increased by 3% but ADR fell by 2%, while RevPar languished at +0.5%. The first two weeks of January are traditionally rather Fig.12: Hotel Performance Cologne/Bonn January-June 2015/2014 Hotel Performance Cologne / Bonn 2015/2014* Occupancy Average Daily Rate in Euro RevPar in Euro Var. Var.% Var. Var.% Var. Var.% January 60,4% 58,7% 1,7 2,9% 107,8 110,4-2,6-2,4% 65,1 64,8 0,3 0,5% February 69,2% 64,5% 4,7 7,3% 100,9 93,3 7,6 8,1% 69,8 60,2 9,6 16,0% March 73,1% 67,8% 5,3 7,8% 124,2 96,4 27,8 28,8% 90,8 65,4 25,4 38,9% April 67,7% 62,9% 4,8 7,6% 92,7 86,8 5,9 6,8% 62,8 54,6 8,2 14,9% May 74,2% 76,2% -2,0-2,6% 104,2 96,9 7,3 7,5% 77,3 73,8 3,5 4,7% June 75,6% 68,0% 7,6 11,2% 96,4 86,5 9,9 11,4% 72,9 58,8 14,1 23,9% 1.Half-Year 70,0% 66,4% 3,6 5,4% 104,6 94,9 9,7 10,2% 73,2 63,0 10,2 16,2% *Source: Fairmas GmbH / STR Global, based on dates of participants with daily data input - state explanation OCC ADR RevPar Occupancy Average Daily Rate Revenue per available Room 38,9% 28,8% 23,9% 2,9% 0,5% 16,0% 7,3% 8,1% 7,8% 7,6% 14,9% 6,8% 7,5% 4,7% 16,2% 11,2% 11,4% 10,2% 5,4% -2,4% -2,6% January February March April May June 1.Half-Year Occ ADR RevPar Source: Fairmas GmbH /Data as of Page 24

25 lacklustre, and many hotels in the region tried to lure leisure guests to the city through low room rates. In addition, the ISM (International Sweets & Biscuits Fair) was absent during the month, which in turn made February stronger. The imm cologne, together with the Living Kitchen event, was the subject of much demand and high prices as expected. February was a strong month in Cologne and Bonn. Occupancy rose by 7% and room rates by 8%, leading to a 17% RevPar increase. Alongside the well-attended ISM, both the Carnival and a consistently good business and leisure demand ensured no vacancies signs. One development that even managed to overtake the first month of spring: An ADR increase of 29% seems to be a record (RevPar: up by 39%). This was largely ensured by the very high-priced IDS event (held every three years) and the high room-rate Anuga FoodTec, (also on a three-year cycle), as well as by two full business weeks. April (given such a basis, expectations were quite restrained) was marked by positive figures in terms of all three key indicators at the end of the month. The Interzum trade fair (every other year) and the Team Handball Champions League final ensured that May was a success. This was less significant however because the public holidays, long weekends and the FESPA trade show (an event held at different venues) fell short of expectations. June impressed with a strong business sector and conference trade (ANGA COM, VICTAM - together with the FIAAP and Grapas), overflow business from the GIFA in Dusseldorf, while the Helene Fischer and AC/DC concerts, as well as four full business weeks, rounded off a successful first six months in Cologne and Bonn. The Rhine conurbation is a textbook example of how strong conference events influence the hotel industry s profitability. Occ, ADR and RevPar none of these key indicators was down at any time during the first six months. Munich For twelve years now, tourism in Munich has known only one direction upwards. In 2014, the Bavarian capital recorded 13.4 million overnight stays an increase of 4.3% over the previous year. Most visitors came from Germany and other Germanspeaking countries, though the number of guests from further afield also rose. Munich is a popular destination, especially for Arab visitors from the Gulf States. No sooner had these healthy figures been announced than the statistics for January appeared. These were significantly better than last year (Occ: up 4%, ADR: 11% higher and RevPar up 15%). The main reason for this encouraging development was the BAU trade fair, which takes place every two years and reliably ensures healthy room rates. The good snow conditions also boosted performance. Many guests take a break in Munich on their way to the ski resorts. In February, hotels were filled thanks to the ISPO trade show, Page 25

26 the Munich Security Conference, as well as due to good demand in the corporate and meeting sectors. In addition, there was some healthy weekend business, both over the Valentine s Day weekend, as well as for the Bayern Munich FC soccer games. Thus, occupancy increased by 6% and ADR by an impressive 10%, leading to a remarkable 17% growth in RevPar. March turned out better than predicted. Major events in Munich and Gasteig brought good business to hotels near these venues. A cold and wet Easter put a brake on any desire to travel: business was correspondingly poor Fig.13: Hotel Performance Munich January-June 2015/2014 Hotel Performance Munich 2015/2014* Occupancy Average Daily Rate in Euro RevPar in Euro Var. Var.% Var. Var.% Var. Var.% January 67,5% 64,9% 2,6 4,0% 128,9 116,4 12,5 10,7% 87,0 75,5 11,5 15,2% February 72,5% 68,4% 4,1 6,0% 119,1 107,9 11,2 10,4% 86,3 73,8 12,5 17,0% March 73,3% 70,6% 2,7 3,8% 109,3 108,8 0,5 0,5% 80,1 76,8 3,3 4,3% April 73,7% 74,6% -0,9-1,2% 111,8 108,7 3,1 2,9% 82,4 81,1 1,3 1,6% May 80,3% 82,7% -2,4-2,9% 125,5 130,4-4,9-3,8% 100,8 107,8-7,1-6,6% June 83,3% 79,6% 3,7 4,6% 127,5 125,1 2,4 1,9% 106,2 99,6 6,6 6,7% 1.Half-Year 75,1% 73,7% 1,4 1,9% 120,5 117,1 3,4 2,9% 90,5 86,3 4,2 4,9% *Source: Fairmas GmbH / STR Global, based on dates of participants with daily data input - state explanation OCC ADR RevPar Occupancy Average Daily Rate Revenue per available Room 15,2% 17,0% 10,7% 10,4% 4,0% 6,0% 3,8% 0,5% 4,3% 2,9% 1,6% 4,6% 6,7% 1,9% 1,9% 2,9% 4,9% -1,2% -2,9% -3,8% -6,6% January February March April May June 1.Half-Year Occ ADR RevPar Source: Fairmas GmbH /Data as of Page 26

27 over the public holidays. There was great demand for the three full business weeks in April, and there was also some impressive leisure sector demand during the Easter holidays and at the weekends. A major soccer match was also played on the last holiday weekend. Due to Ramadan, bookings from the Arab market came a little later in April. There were no large trade fairs in April, hence occupancy declined by 1%, though room rates did increase by 3% (RevPar: up 2%). May was rather muted. The IFAT trade show is held in even-numbered years, and the transport logistic event could not compensate for the lack of business at high room rates. The number of public holidays and the fact that the Whitsun school holidays were held in May also put pressure on room rates. In addition, downward pressure was exerted on ADR from a great deal of short-term top-up business, especially from the individual and group segments, as well as from wholesale trade. Occupancy declined by 3% and ADR declined by 4%, so that RevPar fell by around 7%. June offered more time for business-sector trade than last year but Ramadan began in the middle of the month, meaning that Arab guests left earlier. The G7 summit at Schloss Elmau only benefited a few isolated hotels. But two very strong trade fairs ( Intersolar Europe and the Laser World of Photonics ), which were in great demand at very short notice, ensured good results: a 5% increase in occupancy and an 2% rise in room rates. This meant that RevPar was 7% higher. Conclusion The Big Seven : Berlin, Dresden, Dusseldorf, Frankfurt am Main, Hamburg, Cologne/Bonn, and Munich are all venues for trade fairs, meetings, incentives, congresses, and events. Once again, analysis confirms just how much these events shape the hotel industry s key economic indicators. Overall, the trade recorded a successful first six months in In particular, hoteliers in Hamburg and the Cologne/Bonn metropolitan area recorded consistently good to very good results. Dusseldorf has been the loser over the first six months of the year. The Rhine metropolis has had to cope with a weak trade fair and convention year, so that all three key economic indicators were negative (Occ: -1.3%, ADR: -12% and RevPar: -12.8%). The big winner is the Cologne/Bonn conurbation (Occ: +5.4, ADR: +10.2% and RevPar: +16.2). Page 27

28 At the same time, analysis shows just how dependent the industry is on events. Declining approval ratings for Dresden led to a fall in bookings (Occ: down 0.7%). If Easter is cold and rainy, it can wash away any desire to travel. The industry can look to the second half of the year with optimism. Germany, as a safe country with a high and reliable standard of service and support, will continue to attract trade fair organizers, business activities and leisure travellers. Fig.14: Hotel Performance German Destinations January-June 2015/2014 Hotel Performance 1.Half-Year 2015/2014* Occupancy Average Daily Rate in Euro RevPar in Euro Var. Var.% Var. Var.% Var. Var.% Munich 75,1% 73,7% 1,4 1,9% 120,5 117,1 3,4 2,9% 90,5 86,3 4,2 4,9% Berlin 73,0% 71,1% 1,9 2,7% 94,3 89,0 5,3 6,0% 68,8 63,3 5,6 8,8% Dresden 57,3% 57,7% -0,4-0,7% 72,2 70,5 1,7 2,4% 41,4 40,7 0,7 1,7% Dusseldorf 66,5% 67,4% -0,9-1,3% 100,0 113,2-13,2-11,7% 66,5 76,3-9,8-12,8% Frankfurt 69,0% 67,2% 1,8 2,7% 115,3 108,5 6,8 6,3% 79,6 72,9 6,6 9,1% Hamburg 76,8% 76,2% 0,6 0,8% 108,1 105,2 2,9 2,8% 83,0 80,2 2,9 3,6% Colone/Bonn 70,0% 66,4% 3,6 5,4% 104,6 94,9 9,7 10,2% 73,2 63,0 10,2 16,2% Source: Fairmas GmbH /Data as of Page 28

29 The Fairmas is published by: Fairmas Gesellschaft für Marktanalysen mbh, Sachsendamm 6, Berlin, Deutschland Solutions Dot WG GmbH, Kranzer Strasse 6-7, Berlin, Deutschland Fairmas Gesellschaft für Marktanalysen mbh specializes in market analyses and the development of planning and controlling software for the hotel industry. The company offers its international clientele a hotel benchmarking platform, as well as various software applications for the fields of budgeting, forecasting, controlling, management reporting and work process optimization. As a strategic management consultancy, Solutions Dot WG develops individual and customized strategies and solutions for companies in the hotel, catering and tourism, and provides support in implementing plans. Solutions dot also manages independent project implementation, is active in support management and interim management, as well as in the total quality management (TQM) sector. The Fairmas is edited by: Nadine Kilian, Marketing & Communications Manager, Fairmas Gesellschaft für Marktanalysen mbh, hotel-report@fairmas.com Gabriele Kiessling, Consultant und Project Management, Solutions Dot WG GmbH, hotel-report@fairmas.com Page 29