Hotel Report. In Focus. Edition 4 May Fashion, brands, and a metropolis a market analysis of Dusseldorf

Transcription

1 Edition 4 May 2014 In Focus Fashion, brands, and a metropolis a market analysis of Dusseldorf

2 Index Dear readers, 3 April 2014 in comparison to the previous year 4 Trendbarometer 7 In focus 14 Disclaimer 25 Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Seite 2

3 Dear readers, In November 2013, we dealt with Hamburg, a tourism steamship that had really picked up steam, and we received much positive feedback for this analytical look at a destination. We now continue the series by focusing on a new location: Dusseldorf. Gabriele Kiessling, Analyst at Solutions dot WG, examined the potential of the North Rhine-Westphalian capital, which reported a new record number of visitors in What is the basis for the city s high quality of life? How is the hotel market developing? How attractive is the location for investors? Our answers these questions. Will May be a merry month all round? Will temperatures and key figures be on the rise? We have the figures for April fresh off the press, and we look at the forecasts for May, June and July in the Trendbarometer. The forecasts are mixed - the latest analysis figures show where hoteliers will be basking in the sun (as well as where depressions are lurking on the horizon). The editorial team wishes you an interesting and inspiring time with the (Gabriele Kiessling & Nadine Kilian) Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Seite 3

4 April 2014 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: GmbH/STR Global, Data as of Berlin Occ: 71%, ADR: 81, RevPar: 58 Berlin s hoteliers expected much more in April. Even though little business sector trade was to be expected due to Easter and the associated school holidays, the city s hoteliers were anything but happy with a 13% fall in RevPar (Occ was down by 2% and ADR by 11%). Occupancy could not be maintained at last year s levels (in spite of the healthy leisure sector trade) because overall activity in the business and event segments was absent. Dresden Occ: 67%, ADR: 67, RevPar: 44 In Dresden, positive statistics ensured a springtime feeling. The fantastic weather during the Easter holidays attracted many tourists to the city, resulting in a 13% rise in occupancy. Here too, bookings were made at extremely short notice, mostly just one or two days beforehand. However, as in most other destinations, the business market with its high room rates was lacking, which is why rates fell 6% on a year-on-year basis. However, a 7% increase in RevPar was achieved thanks to the high occupancy levels. Munich Occ: 75%, ADR: 109, RevPar: 81 The figures for Munich were not comparable with last year s. The BAUMA trade fair, which only takes place every two years, ensured very high room rates in Hoteliers clearly felt its absence this year due to the extremely negative room rate development (down by 37%). The relatively small decline in occupancy (just 3%) could only be achieved through strong leisure sector business over Easter holidays and during the school holiday period. Here too, the bookings came very quickly and at Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 4

5 relatively low rates. Naturally enough, the tourism business alone was unable to compensate for the drastic (39%) fall in RevPar. Cologne/Bonn Occ: 63%, ADR: 88, RevPar: 55 Hoteliers in Cologne/Bonn reported overall negative numbers (Occ: down 3%, ADR: up 0.1%, RevPar: down 2%). The FIBO trade fair (3 to 6 April 2014), which was held in Cologne for the second time, was better attended than last year, while the leisure sector business at Easter and during the holidays was satisfactory thanks to the beautiful weather, even leading to better room rates than last year. Nevertheless, hoteliers were somewhat perplexed because business in April did remain a little below expectations. We assume that the demand from the business sector was down this year due to the timing of the Easter holidays, as it was at the other destinations. Dusseldorf Occ: 60%, ADR: 116, RevPar: 70 April in Dusseldorf was well up on 2013, with Rev- Par 27% higher. Wire & Tube, the five-day event held every two years, and which was a key factor behind the better room rates (ADR: +33%), was mainly responsible for this. The decline in occupancy (Occ down 1%) was due to the two weeks of Easter holidays in April, when booking behaviour in both group and corporate business sectors was very subdued. In 2013, the month began during the second week of the holidays, so that hoteliers then had more than three full weeks available for business visitors. Frankfurt Occ: 62%, ADR: 110, RevPar: 67 In April, business in Frankfurt was worse than in 2013, with RevPar down by 5% on last year, even though room rates were 1% higher. The main reason for the increase in ADR was the Light & Building trade fair (held every two years), which extended into April. This generated generally higher priced sales than the Musikmesse music fair, which took place in April The 6% fall in occupancy could mainly be attributed to the Easter holiday period, which lasted two weeks this year and accounted for just one week of April, unlike in Compared to last year, Frankfurt was missing a whole business week in 2014, which was reflected strongly in occupancy. Hamburg: Occ: 79%, ADR: 112, RevPar: 89 April in Hamburg was marked by a slight (0.4%) deterioration in overall performance, despite a 0.1% rise in rates. The main reasons for the incre- Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 5

6 ase in the average daily rate was the Aircraft trade show taking place during the month (8 to 10 April 2014), which led to better room rates this year than in 2013 (ADR up 5%). The early April IN Cosmetics trade fair taking place for the first time this year (1 to 3 April 2014; last year it had taken place in Paris) helped boost the ADR. As the Easter holiday period fell wholly within the month of March in 2013 (this year it was entirely in April), this also had a negative impact on occupancy (Occ down 1%). Furthermore, the Haspa Marathon had been held in April last year, ensuring strong occupancy figures in the city. This year, the event was held on the first weekend in May. Overview of all destinations Hotel Performance April 2014* Occupancy in % Average Daily Rate in Euro RevPar in Euro Apr 14 Apr 13 Var. Var.% Apr 14 Apr 13 Var. Var.% Apr 14 Apr 13 Var. Var.% Berlin 71,0 72,6-1,6-2,2 81,3 91,6-10,3-11,2 57,7 66,5-8,8-13,2 Dresden 66,6 58,9 7,7 13,1 66,5 70,5-4,0-5,7 44,3 41,5 2,8 6,7 Munich 74,5 77,2-2,7-3,5 108,6 173,5-64,9-37,4 80,9 133,9-53,0-39,6 Cologne/Bonn 62,6 64,3-1,7-2,6 88,1 88,1 0,0 0,1 55,2 56,6-1,5-2,6 Dusseldorf 60,2 60,7-0,5-0,8 116,0 91,3 24,7 27,1 69,8 55,4 14,4 26,0 Hamburg 79,4 80,2-0,8-1,0 111,7 111,6 0,1 0,1 88,7 89,5-0,8-0,9 Frankfurt 61,5 65,6-4,1-6,2 109,5 108,8 0,7 0,6 67,3 71,4-4,0-5,6 * Source: GmbH/STR Global, based on data from participants with daily data entry. Data as of Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 6

7 Trendbarometer A peek into the future in detail: Berlin May will be a merry month for hoteliers in Berlin, or at least the forecasts suggest as much. A 6% Fig.1: Trendbarometer Berlin 2014 Trend versus last year May Last Year 6,3% 9,5% June 16,4% -2,3% -2,1% July -4,4% -3,5% 4,5% 0,8% Occ ADR RevPar Source: GmbH / Data as of increase in occupancy is expected on a year-onyear basis, while room rates will rise by 10%, leading to a respectable 16% growth in RevPar. The long weekend staring on May 1 was already well booked, in part because of the German swimming championships. Naturally, the ILA event (20 to 25 May 2014) will again attract some business visitors to the city, which explains the steep ADR increase. And the final of the German soccer cup will provide for good business in some hotels. Last but not least, important public holidays such as Whitsun (Pentecost) and Corpus Christi fall in June this year, meaning three full business weeks for the hotels. However, the forecast for June is much more restrained. Here, the timing of the public holidays is having a negative impact. In addition, the school summer holidays are beginning in some federal states. There are no major trade fairs or events. This means an absence of business visitors the bookings in this segment are still very subdued, anyway. Although declines in occupancy and ADR of about 2% each have been expected, resulting in a 4% fall in RevPar, hoteliers are still satisfied because, when taken together with the May figures, the trend is very positive and makes up for the first quarter losses. Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 7

8 The forecasts for July are reasonably positive. A 4% Fig.2: Trendbarometer Dresden 2014 Trend versus last year decline in occupancy is expected, but this will be accompanied by a 5% increase in ADR, and thus a slightly positive RevPar trend (up 1%). Traditionally, July is rather unpredictable. However, the holidays in Berlin begin quite late and some corporate business is expected. The short-term nature of leisure May Last Year 1,0% -3,8% June -2,8% 6,2% 3,2% July 9,6% 9,1% 4,2% 13,7% Occ ADR RevPar Source: GmbH / Data as of sector bookings makes any predictions difficult. +3%, and RevPar: +10%). There will be some major events and public holidays that many tourists Dresden like to use for long weekends, and which will all Last year, a number of major events and conferences were held in Dresden in May. There were However, it must not be forgotten that floods help attract a large number of visitors to the city. also three long weekends thanks to the various public holidays, which boosted leisure sector trade. ved last year in June. washed away around 25% of the revenues achie- Things are slightly different this year. The weekend around the First of May provided good leisure Last July also led to some losses due to the flood. sector occupancy. How this month s business will At that time, the Elbe cycle route was still blocked progress in the segment is difficult to predict, due off, which meant that cyclists stayed away, leading to the short term nature of the bookings. It is fairly certain that there will be fewer business visitors uncertainty. As a result, forecasts for this July are to generally very low demand due to the overall because of the lack of major events, which leads to naturally far better (Occ: +9%, ADR: +4%, RevPar: modest forecasts (Occ: +1%, ADR: -4%, RevPar: +14%). Again, a great deal of leisure business it is -3%) expected, especially for the hotels in the city centre. The demand for June, however, is already very good, just as the forecasts are (Occ: +6%, ADR: Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 8

9 Dusseldorf: May is playing into the hands of the Dusseldorf hotels this year; a RevPar increase of 103% is expected. The 2014 Interpack trade fair (8 to 14 May, held on a three-year cycle) will be decisive in this major improvement. On the other hand, some public holidays such as Whitsun (Pentecost) and Corpus Christi fall in June this year, which will result One factor that is working in favour of Dusseldorf hoteliers in May will be absent in June (Occ: down by 6%, ADR down 8%, and RevPar 14% lower): the Corpus Christi and Whit Monday public holidays are in June this year, so splitting two of the four business weeks, especially worrying in relation to the timing of group business. Fig.3: Trendbarometer Dusseldorf 2014 Trend versus last year May Last Year 25,6% 61,7% June -6,1% -8,3% July -13,8% 0,7% -10,6% -10,0% Occ ADR RevPar 103,1% In Dusseldorf, some hoteliers are continuing to report a decline in the banqueting business, which (in turn) is affecting room bookings. So far, many questions remain unanswered. Experience does suggest that there will be increase in the volume of bookings. Source: GmbH / Data as of in better corporate business. This year s Medical Congress at the end of the month (it was held in Hanover last year) is being accompanied by particularly positive advance bookings, according to some hotels in the city. Some hoteliers also continued to record good advance bookings in the group segment, which is expressed in both the positive ADR and occupancy forecasts (ADR: up 62%, Occ: up 26%). So far, forecasts for July have also been poor. A 10% decline in RevPar is expected, attributed to the downturn in room rates (ADR: - 11%), despite a 1% increase in occupancy. The reasons mainly concern the early onset of the summer vacation in North Rhine-Westphalia (7 July to 19 August 2014). Last year, the school summer holidays began later, on 22 July In addition, Ramadan is taking up six days of July this Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 9

10 year. Consequently, a big decline in business can be expected. Frankfurt May has so far been a poor month in Frankfurt, with a 1% decline in RevPar. This can largely be attributed to the negative room rates forecast (ADR: down 3%). Last year, the IFA trade show (only held every three years) took place right at the beginning of the month. In parallel, the annual IMEX fair began on a Tuesday after Whitsun in 2013, leading to higher occupancy figures and room rates on an The outlook for Frankfurt in June is making hoteliers feel gloomy. A 13% decline in RevPar is expected, due the poor occupancy forecast (also down by 13%). The hoteliers in Frankfurt benefited from strong corporate business in 2013 due to the absence of public holidays. In 2014, the two public holidays (Whit Monday and Corpus Christi) have a negative effect on two full business weeks. In addition, the Techtextil trade show was held in 2013 (it is held every two years). This means that the basic conditions are worse this time than during the same month last year. Fig.4: Trendbarometer Hamburg 2014 Trend versus last year May Last Year 5,4% 2,4% June 7,9% -2,0% 2,2% July 0,2% -3,1% -3,8% -6,8% Occ ADR RevPar Source: GmbH / Data as of otherwise rather poor Whit Monday. That is why hoteliers predict that May in Frankfurt will be well below the previous year s level. July does provide some hope, however. A 7% RevPar increase is expected, attributed to the positive room rate trend (ADR up 10%). Last year in the federal state of Hesse, the school summer holidays took up much of July. This year, the vacations do not begin until the end of July, which means it will be a full business month. Frankfurt hoteliers are already registering event sector bookings, so hoping for an improvement in room rates, as the hotels are not solely dependent on leisure, individual and coach party Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 10

11 trade, and so the corporate business will be positively influenced. Hamburg Hoteliers in Hamburg expect an improvement in the overall performance for May, with a clear (8%) growth in RevPar on a year-on-year basis. This is justified by the higher demand for annual events, Fig.5: Trendbarometer Hamburg 2014 Trend versus last year May Last Year 5,4% 2,4% June 7,9% -2,0% 2,2% July 0,2% -3,1% -3,8% -6,8% Occ ADR RevPar Source: GmbH / Data as of In June, hoteliers expect a slight improvement in overall performance, with RevPar up by 0.2%, due to the 2% increase in ADR. In general, many hotels are experiencing growing demand in the MICE segment, linked to a well-attended Medical Congress from 8 to 12 June (last year was held in May), which thus covers the Whitsun period and generated a positive starting point for rates. Due to the later start of the summer holidays this year, the tourist masses are only expected from July onwards, together with the Harley Days (July 2014 in contrast to June 2013), which will in turn have a negative effect on occupancy (due to missing group and city tours trade, for example). Just how June will ultimately develop still remains to be seen. including the Hafengeburtstag (Harbour Birthday), a variety of top-price concerts in the O2 World (The Scorpions, Justin Timberlake and Robbie Williams), the marathon, as well as the X-Ray congress, which is boosting average rates (ADR up 2%). The Spring-Derby show jumping event in Klein Flottbek on the last weekend of May is also putting Hamburg hoteliers in a good mood. In July, the hoteliers in Hamburg expect a sharp decline in every sector (Occ: -3%, ADR: -4%, and RevPar: -7%). Last July, the city benefited from the International Lions Club Convention. This year s Jehovah s Witnesses event will not be able to compensate for the absence of this high-priced event. Nevertheless, Hamburg hoteliers are hoping for an overall improvement, mainly due to good leisure sector Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 11

12 Fig.6: Trendbarometer Cologne/Bonn 2014 Trend versus last year Last Year May 15,7% -1,9% June 13,5% 1,9% -4,6% July -2,8% 11,7% 1,7% 13,6% announced, and pre-bookings have already begun. Some business sector trade has been lost due to the extended weekends, which may slightly reduce room rates (ADR down 2%). Nevertheless, RevPar will increase by an impressive 14%. Occ ADR RevPar Source: GmbH / Data as of business with many tourists on city breaks and stop-overs. Reason for this optimism is the absence of any kind of summer doldrums as is the case in many other German cities at this time. Cologne/Bonn May will be merrier than previously forecast for hoteliers in Cologne and Bonn. The Interpack event in Dusseldorf (8 to 14 May 2014) will ensure plenty of overflow trade. The Anga Com trade fair (20 to 22 May 2014) is set to provide more business sector trade at good room rates than had been previously thought likely. This all is leading to a considerable (16%) increase in occupancy. The good weather forecasts are attracting many tourists to the city, so that the level of leisure sector bookings is now more attractive than had been expected. Meanwhile, the participants for the Final4 team handball event (31 May to 1 June 2014) have been It is expected that June will not be quite so rosy. The Anga Com event took place in June last year and led to correspondingly good rates. Since it is being held in May this year, room rates are set to be 5% lower in June. The Whitsun and Corpus Christi public holidays will attract some tourists to the city, making good occupancy figures (up 2%) likely. However, the lower leisure sector room rates will also lead to a 3% decline in RevPar. The PowerGen trade event (3 to 5 June 2014) will also ensure healthy occupancy (though here too, room rates will also remain average). July is traditionally very difficult to predict. There is already strong demand in the business and meeting sectors for the first week; nevertheless the forecasts for July are still very restrained. But that changes nothing in the confident predictions (Occ: +12%, ADR: +2%, and RevPar: +14%), which will hopefully be justified. Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 12

13 Munich week. The ESHRE Congress at the end of the Hoteliers in Munich are expecting a merry May. month will be unable to make up for the negative The very strong IFAT trade show (5 to 9 May 2014) trend compared to last year (despite the encouragingly high room rates), because here too, the will provide plenty of corporate business and an enormous (26%) increase in room rates, as well impact is likely to fall short of expectations. as a significant (6%) increase in occupancy on a year-on-year basis (with RevPar up by 34%). So July will restore positive expectations (Occ:-1%, far the year had been rather subdued in relation to ADR: +6%, and RevPar: +4%). Hoteliers do assume that fewer business visitors can be expec- the corporate group business. However, this segment is experiencing a very healthy May. This is ted from the Arab world due to Ramadan, which mainly due to the small number of public holidays begins at the end of June. Nevertheless, the presence of such major events as the Training Week and vacations in May; the Whitsun (Pentecost) holiday was in June this year. The FESPA Digital event (20 to 23 May 2014) is also set to ensure a strong corporate impact during the second half of the month. The influence of the Whitsun holidays on corporate business is becoming very clear this June, as is the absence of the Transport trade fair, which last year had a good impact (Occ: -1%, Fig.7: Trendbarometer Munich 2014 Trend versus last year May Last Year 6,3% 26,3% June 34,3% -0,9% -9,7% July -10,5% -1,2% 5,5% 4,2% Occ ADR RevPar Source: GmbH / Data as of ADR: -10%, and RevPar: -11%). To top it all, the for Practical Dermatology and Venereology (19 to major Intersolar (4 to 6 June 2014), as well as 25 July 2014), the EACR (5 to 8 July 2014) and the the Automatica, and Maintain (both 3 to 6 June ESHRE Congress still give hope for strong business sector 2014) events are all taking place during the same trade. Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 13

14 In focus Fashion, brands, and a metropolis a market analysis of Dusseldorf Dusseldorf is home to Germany s only Japantown, and international companies such as E.on, Henkel, Metro, ThyssenKrupp and Vodafone D2 have based their headquarters here. The town is a destination for managers, fashion industry professionals, trade show visitors, architecture fans, art connoisseurs, and concert-goers, for shopping freaks and leisurely strollers. Cosmopolitan charm and Rhineland joie de vivre shape the image of the North Rhine-Westphalian capital. Dusseldorf is an important economic centre in the heart of Europe, a lively, modern capital, as well as a trade fair venue with an international flair. Dusseldorf has a well-developed infrastructure and a modern airport with growth potential. From the Kö (Königsallee), a bewitching and luxurious boulevard, it is a stone s throw to the historic old town with its 260 bars and restaurants. The city can boast more than two dozen museums and exhibition halls, over a hundred galleries, a lively theatre scene, as well as annual events such as the Carnival, the biggest funfair on the Rhine and the jazz rally, and of course the Rhine embankment promenade, which leads to the MedienHafen ( Media harbour ). This very attractive location with its distinctive architecture symbolizes the successful structural change that has taken place throughout the region. High quality services and expertise have replaced a landscape of coal-mining and pit-head winding towers. Dusseldorf is a centre of creativity. More Fig.1: Economic factors for Dusseldorf than 485 advertising Dusseldorf Number of inhabitans ( ) agencies and 414 Area (in km²) 217 advertising medium Unemployment rate (in %, ) 9,5 Purchasing power (in per capita, 2012) companies are located Source: North Rhine-Westphalia Statistical Office here, including the three agencies with the highest sales in Germany. More than 160 publishing houses are based in the state capital. North highly concentrated network of universities and research institutions in Germany. Rhine-Westphalia is the federal state with the most Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 14

15 So no one was less surprised than the people of Dusseldorf were that the 2014 study by Mercer Human Resource Consulting (ranking the quality of human life) gave them a respectable sixth place worldwide. In Dusseldorf, not only do the residents feel happy, but also do the growing number of visitors. With over 4.24 million overnight stays in 2013 (a new record) and numerous daytime visitors, Dusseldorf is a popular urban destinations. Markets and market participants - Messe Dusseldorf Dusseldorf s status as a financial and commercial centre is only a recent one. Although already over 700 years old, Dusseldorf has only enjoyed city status for little more than a century. However, the metropolis has been growing faster since then the city fathers had ever imagined possible. The expansion of the exhibition site in particular was and is an important step in the process of the city repositioning itself as an economic centre. With 50 international trade fairs, of which around half such as Drupa, K, Interpack, MEDICA, boot Dusseldorf, Wire & Tube and REHACARE are considered to be leading events worldwide, the metropolis on the Rhine is in a strong position, having an eye to the future with further expansion in mind. An investment volume exceeding 700 million has been expended. At present, the total exhibition space available amounts to 284,000 m² (in comparison, Frankfurt am Main has 355,678 m²; Cologne 284,000 m²; Berlin 160,000 m²; Munich 180,000 m², and Hamburg 87,000 m²). In 2013, a total of 27 trade fairs were held in Dusseldorf, including 16 independent events, as well as 11 partner and guest events. The Dusseldorf Messe exhibition site hosted 25,068 exhibitors last year (in Frankfurt am Main, there were 40,800 and 9907 in Hamburg). Sixty-two percent of the exhibitors in Dusseldorf came from abroad. Total numbers of visitors: 1,194,743 (compared to 2.23 million in Frankfurt am Main; 2.6 million in Cologne and 789,697 in Hamburg). Approximately onethird of them were from abroad. Unlike other exhibition venues of the country, the Messe Dusseldorf has the advantage of being in Germany s most populous federal state; thus, four times more people live within a 200-km radius of Dusseldorf than within the same distance from Berlin, and they have almost twice the average income. In addition, North Rhine-Westphalia has had many TOP-industry centres with established structures since the reconstruction of Germany after World War 2. Trade shows in Dusseldorf are characterized by the following: there are mostly very successful industrial trade fairs. Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 15

16 Through industrial exports, Messe Dusseldorf entered business with central and eastern Europe at a very early stage - even before the expansion of the growth markets in Asia. Thus Messe Dusseldorf Group owns the majority of shares in the Brno trade fair venue in the Czech Republic, and the Messe Dusseldorf is above all strongly represented in Moscow with some major events. As innovation cycles are not quite as short in the industrial sector as in the IT or digital Internet industry, for example, some major trade fairs not only have annual cycles, but also two and three-year cycles. This means that every six years, there is always a super year when all the top events takes place, meaning that sales and profits then explode. 5 km from the historic centre. It has 6,000 m² of exhibition space and can offer room for as many as 7,500 visitors. Around 2,000 events are held here each year, including numerous national and international conferences, corporate events, and wellattended exhibitions and receptions. Like other trade fair destinations, Dusseldorf has stronger and weaker trade show years. This year, Fig.2: Trade fair visitors & congress participants Dusseldorf , Source: Messe Dusseldorf GmbH Congress participants Trade fair visitors The CCD (Congress Center Dusseldorf) is the thirdlargest convention centre in Germany, located directly on the Rhine and connected to the exhibition grounds, just three kilometres from the airport and 2014, is considered a strong year with some wellvisited trade fairs. The Wire & Tube exhibition (two-year cycle) or the Interpack event (8 to 14 May 2014), held every three years, will both boost Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 16

17 the numbers of visitors. This year s Deutsche Ärztetag der Bundesärztekammer (the German Physicians Conference organized by the Federal Medical Council, 27 to 30 May), which had taken place in Hanover in 2013, will have a positive effect on performance in Dusseldorf. At the beginning of the year, trade fair boss Werner Dornscheidt was able to book revenues of 250 million for his company, around three percent more than planned. By way of comparison, the relevant figures were around 543m in Frankfurt am Main and 28.6m in Hamburg. Berlin, Cologne and Munich have not yet published their 2013 numbers. For comparison purposes, here are the figures from 2012: Berlin generated 247m, Cologne 227m, and Munich 221.9m. Ready for take-off: ANA and Germanwings the airport as a location factor Since the turn of the millennium, the Dusseldorf Airport has been connected to the railway network with its own train station. Four-hundred trains stop at the airport station every day. Fig.3: Airport statistics Dusseldorf Source: Dusseldorf Airport Compound Annual Growth ,2% 32,4 In 2013, the airport had the most successful business year in its history, with more than 21 million passengers. The number of passengers has grown by 32% over the last 13 years. This means that Dusseldorf s airport is growing faster than the national average. In Germany, only Frankfurt and Munich managed to record higher passenger numbers. Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 17

18 Other good news from Dusseldorf this year: At the end of March, the Japanese carrier ANA launched ment and at the same time, making the growth of the global leisure sector possible. a daily direct service between Tokyo and Dusseldorf. Germanwings has also been flying to the city since the start of the summer timetable. Without the now 113 weekly long haul flights and many Business and leisure destination: arrivals and overnight stays hundred other routes, Dusseldorf would not be what it is: A cosmopolitan, economically strong and successful city in the heart of Europe, Mayor Dirk Elbers said at the 2014 ITB tourist fair. The According to the North Rhine-Westphalia State Statistical Office, there have never been as many overnight stays in Dusseldorf hotels as in 2013 expansion of flight routes is opening up new and important Fig.4: Arrivals & overnight stays Dusseldorf source markets for the Ankünfte Düsseldorf city. New connections in the Year Ankünfte % Domestic % International Arrivals last three years have included direct flights to Beijing, , (5,8) (0,2) (0,7) (2,6) , to Barnaul in Siberia, Abu , , , , Dhabi, Malaga, Bari, Catania, , , Dublin, Westerland/ , , , , , , Sylt, Ibiza, Knock (Ireland), , , , , , , Zadar in Croatia, and to , , other points of call. Lufthansa Annual Compound has increased the week , ,000 Jahr Übernachtungen % ly frequency of its flights to Overnights , Athens, Budapest, Moscow, , Geneva, Manchester, Nice, ,0% , ,6% , ,4% and Vienna. With these new ,0% , ,1% , ,9% routes and the planned expansion in capacity, Dussel , ,4% ,3% , ,2% dorf airport is strengthening the important business seg ,1% ,5% Source: Information & Technik NRW Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 18

19 (4,244,733). This represents a 4.7% increase. The number of arrivals rose by a healthy 5.6 percent to reach a total of 2,552,057. There was a 3.7% growth in the number of foreign visitors in Dusseldorf in 2013, with 1,696,419 overnight stays. In Dusseldorf, the share of overnights from abroad is 40%, an above-average figure. In the international Germany with a 60% share of the total overnights (up 5.3 percent to 2,548,314). Nevertheless, the hoteliers are not completely happy because the average length of stay of 1.9 days (in 2013) has fallen to 1.7 and is thus one of the shortest among German cities. Fig.5: Seasonality Dusseldorf % 80% Seasonality 2013 Düsseldorf Occupancy 70% Jan 63% 1 75% 75% 75% 60% Feb 68% 60% 68% 2 TB 63% Mar 60% 60% 68% 62% 3 50% 59% Apr 60% 56% 4 59% 40% May 59% 5 LA 30% June 68% 6 20% July 62% 7 Aug 56% 8 nnotrans 10% Sep 75% 9 0% Okt 75% 10 Jan Nov Feb Mar Apr May75% June July Aug 11 Sep Oct Nov Dec Source: Even inexperienced readers of statistics can understand the link between the number of arrivals and overnight stays and the trade fair calendar. Thanks to the lively fair and exhibition trade, business travellers make up about 70% of all guests in Dusseldorf a sensitive figure in view of the economic and political crises around the world. ranking of overnight stays, the Netherlands leads with 179,395 visitors (up by 5.6%), followed by the United Kingdom with 165,618 (2.7% higher). This is followed by Russia (129,916; 15.2% higher) and the USA (126,266; 15.8% up) with high growth rates. The Arab Gulf states are in fifth place with overnight stays, representing a vigorous 14.3% increase. The top travel market remains The international focus of the exhibition and congress city influenced the mix of visitors just as much as the seasonal course of the year. Thanks to the Caravan trade fair, as well as the GDS and the Rehacare international, September 2013 was the month with the strongest demand yet. October and November were also very well-visited months, marked by occupancy rates of over 74%. Octo- Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 19

20 ber featured the Kunststoff Messe (plastics trade fair) and November the Compamed and Medica events. May and August were the weakest due to the trade fair calendar and the summer vacation. The strong demand in the business segment means that Dusseldorf has to fight against the weekend vacuums caused by the departure of business travellers on Fridays. Dusseldorf hotel performance In 2013, Dusseldorf had to accept several negative key figures due to a cyclically weak trade show year with an ADR of around 106. The negative ADR (-4%) made itself especially noticeable through a fall of over 3% in RevPar, even though occupancy did improve slightly compared to 2012 (Occ: +1%). The three-star sector suffered even greater losses in 2013, with a 7.3% decline in RevPar. The negative trend can be attributed to the declining net room rate in particular. Reasons for Dusseldorf s poorer overall performance were the absence of the CPD fashion days in February, as well as the Metav in March (ADR: -15%) and the Wire & Tube trade fair in April, which are both held every two years. The Drupa trade fair for printing only takes place every four years and had a decisive influence on the Dusseldorf hotel market in May Putting it simply, it means that ADR plummeted by 51% in March In October, the K plastics trade fair, with 218,000 Fig.6: Hotel performance Dusseldorf Occupancy Variance Variance / /12 12/13 CAGR CAGR Dusseldorf total 63,9 % 63,3 % 57,7 % 61,5 % 6,6 61,9 % 64,4 % 65,0 % 4,0 0,9 0,3% 3,0% 3* Category 60,8 % 64,7 % 53,9 % 58,1 % 7,8 62,4 % 61,9 % 61,5 % -0,8-0,6 0,2% 3,4% 4* Category 63,9 % 63,0 % 58,1 % 61,3 % 5,5 63,0 % 65,2 % 65,6 % 3,5 0,6 0,4% 3,1% 5* Category 64,7 % 65,0 % 56,7 % 63,0 % 11,1 56,0 % 62,0 % 64,1 % 10,7 3,4-0,2% 3,1% Average Daily Rate / /12 12/13 CAGR CAGR Dusseldorf total 104,9 119,4 90,9 108,3 19,1 109,8 109,9 105,9 0,1-3,6 0,2% 3,9% 3* Category 71,2 84,2 63,3 79,8 26,1 90,9 86,3 80,6-5,1-6,6 2,1% 6,2% 4* Category 93,1 108,8 83,3 95,9 15,1 97,2 97,4 92,7 0,2-4,8-0,1% 2,7% 5* Category 163,7 183,9 147,5 186,2 26,2 193,4 190,2 190,5-1,7 0,2 2,6% 6,6% RevPAR / /12 12/13 CAGR CAGR Dusseldorf total 67,0 75,6 52,4 66,7 27,3 67,9 70,8 68,8 4,3-2,8 0,4% 7,0% 3* Category 43,3 54,3 34,1 46,4 36,1 56,7 53,4 49,5-5,8-7,3 2,3% 9,8% 4* Category 59,5 68,5 48,4 58,9 21,7 61,3 63,5 60,8 3,6-4,3 0,4% 5,9% 5* Category 105,9 119,6 83,7 117,3 40,1 108,3 118,0 122,0 9,0 3,4 2,4% 9,9% Legende OCC ADR RevPar CAGR Occupancy Average daily rate (net logistics revenue per available room) Revenue per available Room Compound annual growth rate (growth per year) Source: GmbH / STR Global, based on data from participants with daily data entry, as of Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 20

21 trade visitors, did help to counter this very downward trend and this was boosted in November by the A + A, a trade show based around safety and health at work, (held every two years and attracting 63,000 attendees). Over 25,000 beds: what the hotels have to offer In 2012, the Dusseldorf hotel market grew rather modestly: just 286 new rooms became available. These were at the B&B hotel (124 rooms) and the Derag Livinghotel (162). In 2013, the growth rate of hotel beds in Dusseldorf was 2.1%. This means that the city had exactly 25,216 beds at the turn of the year. In the last few years ( ), hoteliers have been able to satisfactorily absorb the 58% increase in the number of beds: The growth of 78% in overnight stays was far higher that the increase in beds. Increasingly, the focus has been shifting from the business to the budget segment. The most striking example is from the new hotel building with 244 rooms, opened by Motel One in the Immermannstraße in the summer of In the North Rhine-Westphalian capital, the market is dominated by hotels of the big brands; some Fig.7: Beds available & bed occupancy / Dusseldorf ( ) Dusseldorf Year Bed supply Variance % Bed occupancy (%) Variance (in % occupancy) Overnights (in 1000) Variance % , ,5 42,6 1, , ,8 38,8-8, , ,5 41,2 6, , ,8 40,9-0, , ,7 42,5 3, , ,1 42,5 0, , ,1 42,7 0, , ,9 40,1-6, , ,8 43,2 7, , ,3 44,5 3, , ,3 45,4 2, , ,1 47,6 4, ,7 Change 2001/ % 13% 78% Source:Tourismus GmbH Dusseldorf Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 21

22 55 chain hotels represent 80% of all the beds offered. Accor is the market leader in this segment with a market share of 13.5%, followed by the InterContinental Hotels Group (9.2%) and NH-Hotels (8.7%). The chains dominate the four-star and fivestar segments and are less well represented in the middle class sector. Set for growth: New hotel projects Due to new and (in some cases) spectacular hotel projects, there will be even more beds available in the years to come; the growth rate is moderate and the pipeline well-filled. Even though the DEHOGA (Hotel and Restaurant Association) in North Rhine- Westphalia considers the market to be saturated, internationally renowned luxury hotels, as well as large conference hotels and individual theme and design hotels are all being developed. A new Holiday Inn Express is currently being built on Am Wehrhahn and is due to open in May This premium economy class hotel will offer 164 rooms. Not far away, B&B is building its third hotel in the city. The luxurious 172-room Derag Livinghotel Di Medici, which is scheduled to open this summer lies between the Königsallee and Rhine embankment, in the centre of the historic old town. In the longer term, Mercure is planning a new hotel with 72 rooms, and the Lindner Group intends to open a hotel in the Immernstrasse. While in the last few years, projects have mainly been centred on the Kö (Königsallee) or the MedienHafen ( Media harbour ) or based at the airport, these new buildings are more concentrated on sites near the station. Conclusion Dusseldorf occupies a leading position among Europe s trade fair sites and is investing in the further expansion of the Messe exhibition centre - in the face of fierce domestic competition. Trade fair and congress periods, especially the large leading international trade fairs, represent good times for Dusseldorf hoteliers who then have full hotels and well-filled coffers. Many business travellers can avoid the higher trade fair rates by shunning local hotels and putting up with longer journey times. However, this also functions the other way around because Dusseldorf hotels are well-booked when major trade fairs are held in Cologne. Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 22

23 As before, weekends are difficult times for the city s hotels, because the number of urban tourists visiting the Dusseldorf as a destination is not nearly as high as in Berlin, Munich or Hamburg. Here, those charged with marketing Dusseldorf as a destination are more in demand than ever in order to make the city, with its sympathetic combination of cosmopolitan lifestyle and Rhineland joie de vivre, more attractive for leisure guests. Dusseldorf offers a variety of features as a city of culture, fashion, architecture and shopping. This ties in with the current brand campaign of Düsseldorf Marketing & Tourismus GmbH (DMT). The DMT provides attractive hotel packages, including the DüsseldorfCard. This allows free travel on all buses and trains within the city, combined with numerous discounts for many leisure and cultural facilities. Since the beginning of the year, the DüsseldorfCard has been available at around 80 Rheinbahn ticket machines at stations and stops throughout the city. Visitors, guests and citizens can thus benefit even more quickly from a choice of nearly 50 discounts and offers may possible by the DüsseldorfCard. In particular, for a number of years, the source markets of Russia, the Arab Gulf States and the United States have been the focus of Düsseldorf Marketing & Tourismus GmbH (DMT), which promotes trades fairs and workshops for the city. In the case of the USA, a representative of DMT and Dusseldorf Airport is active locally in marketing the overseas travel market (from New York). The growth rates over the coming years are set to be steady and manageable. Dusseldorf Hoteliers are only aware of such problems as holiday apartments and the bed tax from other destinations. Due to the financial conditions, the evidence available suggests that no bed tax will be introduced in the city. The growth in the numbers of overnight guests, which has been continuing steadily for many years now, is keeping the Dusseldorf hotel market on the boil for both investors and operators. And Dusseldorf, the state capital of North Rhine-Westphalia, will indeed have further growth potential in the years to come. Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 23

24 The is published by: Gesellschaft für Marktanalysen mbh, Sachsendamm 6, Berlin, Deutschland Solutions Dot WG GmbH, Kranzer Strasse 6-7, Berlin, Deutschland 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 is edited by: Nadine Kilian, Marketing & Communications Manager, Gesellschaft für Marktanalysen mbh, hotel-report@fairmas.com Gabriele Kiessling, Consultant und Project Management, Solutions Dot WG GmbH, hotel-report@fairmas.com Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 24

25 Disclaimer No representation or warranty (express or implied) is given as to the accuracy or complete-ness of the information contained in this publication, and, to the extent permitted by law, GmbH / Solutions Dot WG do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. Gesellschaft für Marktanalysen mbh Sachsendamm Berlin GmbH/Solutions Dot WG GmbH Page 25