Edition November 2014 In Focus Provincial? Not in the slightest! The unnoticed destinations of Rostock-Warnemünde, Mainz, and Darmstadt INFINITY - fotolia.com
Index Dear readers, 3 Oktober 2014 in comparison to the previous year 4 Fairmas Trendbarometer 8 In Focus 16 Disclaimer 29 Seite 2
Dear readers, In this Fairmas, we examine the performance of German cities, on time and informatively. The figures reveal the sensitive movements of the market - good and bad times between Hamburg and Munich. But how do things look in those cities and towns beyond the major conurbations? Which factors are affecting booking behaviour there? Our author Gabriele Kiesling, analyst at Solutions dot WG, examined the potential of the cities of Rostock/Warnemünde, Mainz and Darmstadt. She has meticulously put together the pieces of a puzzle made up of seasonal highlights, territorial conditions and peculiarities, school holiday periods, trade fair events, concerts, and many other factors. It is a thoroughly exciting view of the first three quarters of 2014 in these three cities, as well as a clear demonstration of how benchmarking helps in really understanding the market. A golden October? We now have the figures for October hot off the press and we look at the forecasts for November, December and January in the Trendbarometer. Forecasts are mixed. The current Fairmas analysis figures show where hoteliers are looking forward to good times, as well as where thumbs are pointing down. The Fairmas team wishes you enjoyable reading, as well as a little time to breathe before the end-of-the-year rush! (Gabriele Kiessling & Nadine Kilian) Seite 3
Oktober 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: Fairmas GmbH/STR Global, Data as of 06.11.2014 Berlin Occ: 82%, ADR: 94, RevPar: 77 Berlin can look back on a turbulent October. Demand for the long weekend starting on October 3 (the German national holiday) came very late. And it almost seemed as if Berlin had overslept the IN- TERGEO Conference. Demand only picked up in late September but it was above average because many events and conferences were held at the same time. Many hoteliers had not been expecting this and, when the demand arose, they were unable to achieve high-priced business for capacity reasons. This problem seemed to continue throughout the whole month, because the belektro event (15 to 17 October 2014) and the 27th ECNP Congress (18 to 21 October 2014) led to high demand, although the expected ADR remained far below the rates actually achieved. Tourist demand during the school holidays and for the Festival of Lights was also very healthy but with low prices. All Dresden Occ: 73%, ADR: 71, RevPar: 52 A significant decline was expected in Dresden in October. Last year, Semicon Europe took place (7 to 10 October 2013), a trade show that provides Dresden with good performance figures every two years. Its presence was missed this year. The school holidays in the second half of the month impeded conference and corporate business, so that only two weeks were available solely for business guests, who also provided too little exhibition and convention business. In addition, the public holidays on 3 and 31 October 2013 had both been on a Thursday, which set up excellent long weekends and in each case the opportunity for a day s business at higher room rates than this year. So it is not surprising that occupancy and room rates rose by 0.1%, resulting in a 0.3% fall in RevPar, even though the final figures were not quite as bad as had previously been predicted. this meant that while occupancy indeed increased (+ 5%), the ADR fell by 4% (RevPar: +0.4%). Page 4
Dusseldorf Occ: 74%, ADR: 113, RevPar: 83 Performance in October was very poor with a collapse in room rates (ADR: -26%), as well as high losses (-2%) in occupancy. This year, far fewer trade fairs took place in Dusseldorf than in 2013. For instance, the K trade fair( held on a three-year cycle), as well as the Anuga in Cologne, which last year led to very healthy overflow trade, were absent this October. The Aluminium (7 to 10 September 2014) and Glasstec events (21 to 24 September 2014; held on a two-year cycle) that took place this year and representing with seven trade fair days, were unable to improve the overall result. The Aluminium trade fair, in particular, was far below expectations, with a 14% fall in RevPar compared to 2012. Hamburg OCC: 83%, ADR: 110, RevPar: 92 The forecast for October was also positive, with RevPar set to increase by 5%, due to a 3% rise in ADR. The DGHO convention, which is held at rotating venues, held from 10 to 14 October 2014, and the Schmerzkongress, a specialist German medical conference (22 to 25 October) contributed greatly to the improved room rates. In addition, the Congress of the European Commodities Exchange from 16 to 17 attended and the two German soccer cup matches at the end of the month (28 and 29 October 2014) assured very high demand in the city. The Hanseboot boat show, this time from 25 October to 2 November, and this year s Hamburg Summit event, were also viewed positively by the city s hoteliers. Overall, October revealed a trend towards major year-on-year improvements in the MICE and Business sectors. Frankfurt OCC: 74%, ADR: 115, RevPar: 85 October was far worse in terms of performance than last year. Room rates fell by 15%, which resulted in a 14% drop in RevPar. This was largely due to trade fairs being held on different dates than before. Last year, the CPhl (a conference held at different venues) took place from 22 to 24 October 2013. It had a particularly strong impact on room rates and occupancy, leading to unusually good business in an otherwise meagre autumn holiday week in Frankfurt. As in 2013, the Frankfurt Buchmesse (book fair) was held again this year (8 to 12 October 2014). However, competition is increasing all the time due to the many new hotels that are opening in Frankfurt, and it will no longer be possible to achieve the same room rates. The 2% increase in occupancy in October was influenced positively by unexpected strikes and flight cancellations, which generated additional layover business in some hotels. As this year s German Day of Unity public holiday on 3 October fell on a Friday Page 5
(in 2013 it had been on a Thursday), hoteliers in Frankfurt were able to record a quite normal business week, marked by an occupancy increase of +14% compared to 3 October last year. Cologne/Bonn OCC: 73%, ADR: 104, RevPar: 76 Business in Cologne/Bonn was marked by a neardramatic downward trend. Occupancy fell by 4% year-on-year. However, this was overshadowed by the 21% decline in room rates and there was a related 24% fall in RevPar. The main reason was the absence of the ANUGA trade show, which only takes place every two years, though it was not held in 2014. No other trade event in the region can be sold at such high prices. The K trade fair in Dusseldorf, which otherwise provides for much overflow business in Cologne, was not held this year, either. The ORGATEC (21 to 25 October 2014) and INTERMOT (1 to 5 October 2014) trade fairs did nothing like enough to offset the losses. In addition, demand during the autumn school holidays was significantly weaker than in recent years. Demand in the last week of October was still quite strong, but did little to change the overall result. Munich OCC: 88%, ADR: 149, RevPar: 131 The Munich hoteliers were able to record a little growth in October. As room rates had dropped by 1%, a 3% increase occupancy led to a slight (2%) growth in RevPar. Last year, there had been one extra day of Oktoberfest in October; this time around there was an additional day in September. The second Oktoberfest week was slightly worse than last year, particularly in the group sector. Demand was low, resulting in a noticeable drop in prices. In addition, there was a lack of large meetings in the city in October, an absence which meant that higher prices could not be achieved. The InterAirport trade show, held every two years, was missing this time. The autumn vacation in the last week of October did nothing to boost rates in business sector trade, but due to the holiday situation, the week of school holidays still meant healthy demand. Page 6
Overview of all destinations Hotel Performance October 2014/2013* Occupancy in % Average Daily Rate in Euro RevPar in Euro 2014 2013 Var. Var.% 2014 2013 Var. Var.% 2014 2013 Var. Var.% Berlin 81,9% 78,4% 3,5 4,5% 93,9 97,7-3,8-3,9% 76,9 76,6 0,3 0,4% Cologne/Bonn 73,2% 76,6% -3,4-4,4% 103,8 131,3-27,5-20,9% 76,0 100,6-24,6-24,5% Dresden 72,9% 73,0% -0,1-0,1% 71,2 71,3-0,1-0,1% 51,9 52,0-0,1-0,3% Dusseldorf 73,6% 75,3% -1,7-2,3% 113,4 159,7-46,3-29,0% 83,5 120,3-36,8-30,6% Frankfurt 74,2% 72,8% 1,4 1,9% 114,8 135,5-20,7-15,3% 85,2 98,6-13,5-13,6% Hamburg 83,2% 81,6% 1,6 2,0% 110,1 106,9 3,2 3,0% 91,6 87,2 4,4 5,0% Munich 88,0% 85,8% 2,2 2,6% 149,2 150,7-1,5-1,0% 131,3 129,3 2,0 1,5% *Source: Fairmas GmbH / STR Global, based on data from participants with daily data entry, Data as of 03.11.2014 Legend OCC ADR RevPar Occupancy Average Daily Rate (net rooms revenue) Revenue per available Room (net logistics revenue per available room) Page 7
Fairmas Trendbarometer A peek into the future in detail: Berlin In recent years, November has regularly been a good month for business: hardly any public holidays and no school vacations, so that the month offers the promise of four full business weeks. The SAP TechEd conference (11 to 13 November growth in occupancy is thought likely and room rates are expected to grow by 3%, leading to a 7% rise in RevPar. Short-term individual pickup is also expected, and even greater gains can be expected. Fig.1: Trendbarometer Berlin 2014 Trend versus last year November Last Year 4,4% 2,6% December 7,0% 0,3% 0,0% January 0,3% 3,1% -1,3% 1,8% Occ ADR RevPAR Source: Fairmas GmbH / Data as of 05.11.2014 2014), the DGPPN Congress (26 to 29 November 2014), as well as even more business sector and group travel than in recent years is boosting Berlin hoteliers confidence. The advance booking situation has been very good for weeks now. A 4% December promises no major changes compared to last year (Occ: +0.3%, ADR: +0.0%, and RevPar: +0.3%). Berlin hoteliers are still expecting good business sector trade in the first two weeks of the month. The number of shopping and Christmas market tourists will be around last year s level. Demand for the Advent weekends has always been high in recent years. New Year s Eve and the days before are highly promising because the public holidays are very convenient for employees this year; they can take the whole week off and yet only use a few days of their vacation. Nonetheless, Page 8
December this year will be a classic low-season Cologne/Bonn month with little group sector trade and business Hoteliers are cautious about the November forecasts and because the time taken for the booking sales. procedure is becoming progressively shorter. This The beginning of 2015 promises to be positive. In is especially true in the leisure sector and increasingly for business sector trade, too. A 2% occup- January, a 3% increase in occupancy is expected. Employee-friendly long weekends at the end of the ancy increase is expected, as well as a 2% decline year will ensure plenty of leisure business, but with in room rates. This will lead to a 3% falling-off in weaker room rates. Hoteliers have so far been cautious about predicting the Green Week and Berlin the numbers will improve, because November last RevPar. Nevertheless, hoteliers are confident that Fashion Week because both events were weaker year was a good month with a great deal of conference business. It is hoped that there will be some short-notice Fig.2: Trendbarometer Cologne/Bonn 2014 Trend versus last year November Last Year -1,5% -1,7% December -3,1% 2,5% -0,8% January 1,7% -0,8% -0,6% -1,3% Occ ADR RevPAR Source: Fairmas GmbH / Data as of 05.11.2014 in 2014 than in previous years. Currently, it is estimated that the average rate will fall by 1% (RevPar: + 2%), but advance bookings are well above last year s levels. It is hoped that the lower room rates in the periods before and after the big events will yet bring some extra leisure business in the city. business sector trade, even though demand and bookings are sluggish. The Advent weekend and the Christmas market can still ensure good leisure demand. Hoteliers in Cologne/Bonn are cautiously positive in their forecasts for December. They expect a 3% increase in occupancy combined with a 0.8% decrease in ADR and thus an increase in RevPar of around 2%. Leisure business is especially popular, there is very good demand for the Advent weekends, the Christmas market tourism is slowly picking up, as is New Year s Eve. In Cologne/Bonn, the hoteliers are looking confidently towards the end of the year. Page 9
Cologne/Bonn expects a slow start to the New are already very promising. However, it remains to Year. January is predicted to be slightly down. Occupancy is expected to decline by 0.8% and room by 5%, ADR plus 0.4% and RevPar up 5%) are be seen whether the positive forecasts (Occ: up rates by 0.6%. RevPar will thus be 1% down. This justified because bookings are, as always, made January, there was no ISM (the next one will be at short notice. held on 1 to 4 February 2015). The nights with the greatest demand are in 2015 are in February, while Still, the forecast for December is rather more cautious. Occupancy is expected to fall by almost 6%, this year, the trade fair only took place in January (26 to 29 January 2014). So far, bookings in the though room rates will rise by 5%, resulting in a 1% first week of January are still very poor. Many hotels are trying to attract leisure sector guests to the city by offering low room rates. Dresden Hoteliers in Dresden expect a very positive November. Events include the Jazztagen jazz festival, the Unity.Dresden.Night, the CYNETART Festival, and the Striezelmarkt, Fig.3: Trendbarometer Dresden 2014 Trend versus last year Last Year November 4,8% 0,4% December 5,2% -5,5% 4,9% January -0,9% 10,0% 0,2% 10,1% Occ ADR RevPAR Source: Fairmas GmbH / Data as of 05.11.2014 which opens its gates on 27 November 2014. decline in RevPar. Since the fourth day of Advent Things are happening in the city this autumn. The is so close to Christmas, it will be hard to sell it Advent weekends before Christmas are generally to leisure sector guests. Nevertheless, the Advent well booked in Dresden, and the Striezelmarkt weekends prior to Christmas are usually times of event is extremely well attended. The figures for high demand. New Year s Eve is also looking good November are boosted by the fact that the first day for Dresden, as is the tradition. Hoteliers are tightening the price screw, so that room rates for the of Advent falls on 30 November this year. Preliminary booking levels for the first weekend of Advent Advent weekends are significantly higher than in Page 10
recent years. However, while this is perhaps somewhat at the expense of occupancy, the average rate remains positive. There are very positive expectations for the start of the New Year in Dresden. Occupancy is expected to increase by 10%, though room rates will virtually stagnate, with a tiny increase of just 0.2%. Thus, a RevPar increase of 10% is expected in January. Due to the employee-friendly timing of the school Fig.4: Trendbarometer Dusseldorf 2014 Trend versus last year November Last Year -5,3% -5,3% December -10,4% -4,7% 3,8% January -1,0% -2,0% 0,0% -2,0% Occ ADR RevPAR Source: Fairmas GmbH / Data as of 05.11.2014 holidays at the turn of the year, and the fact that the school holidays take up more of January than was the case this year, hoteliers are expecting strong leisure-sector business in January. In general, hoteliers in Dresden are cautiously optimistic about the New Year. Dusseldorf The forecast for November predicted dismal prospects for hoteliers in Dusseldorf (Occ down 5%, ADR-5%, and RevPar-10%). There have been fewer inquiries for events so far. In addition, the A+A trade fair, which takes place every other year, will be absent in 2014. Last year, it was accompanied by high room rates. Furthermore, the important annual Medica trade show (12 to 14 October 2014), with four trade fair days, will hardly be able to counteract the overall poor performance. It also remains to be seen whether the result can be improved. In November, due to increasingly short-term booking behaviour, it will also be seen whether the results can be corrected upwards. There will be no trade fairs in the city in December, as was also the case at this time last year. Dusseldorf Hoteliers expect a 5% decline in occupancy, though a minor increase in ADR of around 4%, and a 1% fall in RevPar. The savings by corporate clients and reduced demands in the meeting and conference sector due to more stringent compliance measures are increasingly showing their negative effects on the Dusseldorf hotel trade. Page 11
Nevertheless, the first three weeks of December are business weeks that are easy to sell. There is usually also good demand over the weekends in the run-up to Christmas, so that occupancy and room rates might well rise because leisure bookings in particular are being made at very short notice. So far, January also looks set to be a troubled month for hoteliers in Dusseldorf (RevPar down 2%). Thus, many Düsseldorf hotels are recording a major fall in the volume of meeting and business overnights. (Occ: down 2 %). A more specific statement on the January forecast can be expected from mid-november. An improvement in occupancy and room rates due to short-term corporate bookings may yet be expected, as so far, the booking situation is still very subdued and many corporate customers are simply keeping their requests as options. Frankfurt As a rule, November is a good corporate and conference month in Frankfurt. Nevertheless, hoteliers are restrained in their forecasts. Occupancy is expected to rise by 0.4%, while room rates are set to fall by 3%. A 3% decline in year-on-year RevPar is thus expected. Many hoteliers feel that the general deterioration in the convention business is the main reason for the generally negative ADR forecast. Currently, individual pickup is still lacking at many hotels. However, since the EuroMold trade fair (although not a major event) is taking place in Frankfurt this year (24 to 28 November 2014), the hotels around the exhibition centre will be able to charge higher room rates, something that could make the results seem a little more positive. Fig.5: Trendbarometer Frankfurt 2014 Trend versus last year November Last Year 0,4% -3,3% December -2,9% -6,3% 0,2% January -6,2% -6,9% -1,0% -7,8% Occ ADR RevPAR Source: Fairmas GmbH / Data as of 05.11.2014 Compared to last year, forecasts for this December are very negative indeed. Occupancy is expected to fall by 6% though room rates will rise by as much as 0.2%. A 6% decline RevPar is thus expected. So far, preliminary bookings in the leisure and events sectors are good but volume is still lacking in the individual segments. Last year, Page 12
EuroMold took place in December, trade fair that 4% increase in RevPar. The starter for November days will be missing this year. Yet even if the bookings for Christmas and New Year pick up soon, which will bring many tourists to the city over the is the 66th Eisbeinessen ( pork knuckle dinner ), figures could clearly still be positive, because the weekend. Generally, the Hamburg hotels confirm development of room rates not least depends on that this November s business will be marked by individual pickup, which is currently very difficult to especially good advance bookings from the corporate and conference sectors, coupled with a high estimate. Group business is expected along with the Christmas market tourism. In addition, the last demand in the transient segment (Occ: up by 2%, three weeks before Christmas are likely to be easily ADR: up 2%). sellable business weeks. December also looks likely to be extremely promising. Increases in all three key indicators are ex- Forecasts for January are also well below last year s levels, both in terms of occupancy (7% less), pected: occupancy is set to increase by 1% and and in room rates (ADR down 1%). This time, the room rates will rise by 3%, which will lead to a (4%) Christmas holidays in many federal states are up to growth in RevPar. In Hamburg too, there are three three days longer than in 2014, which will lead to a full business weeks before Christmas. Demand decline in corporate and meeting business in 2015. for the Advent weekends is high and New Year s In addition, the absence of Paperworld in January means two full trade fair days less in February The hoteliers in Hamburg are looking confidently Eve is very convenient for holidaymakers this year. 2015. Last year the entire event fell in January. The steady growth in hotel openings in Frankfurt is leading to a cut-throat competition among the hotels; this becomes particularly noticeable in the winter months in the lower room rate levels compared to last year. Hamburg November seems set to be a positive month for Hamburg with a Fig.6: Trendbarometer Hamburg 2014 Trend versus last year Last Year November 1,7% 1,8% December 3,5% 0,7% 3,0% January 3,7% -5,5% 2,5% -3,1% Occ ADR RevPAR Source: Fairmas GmbH / Data as of 05.11.2014 Page 13
towards the end of the year, although here too, se charged during the Productronica event. The bookings are made at short notice. first weekend of Advent 2014 falls in November, and hoteliers are expecting good leisure-sector However, the trend for January is subdued, with demand. declines in occupancy of up to 6%, leading to an overall 3% drop in RevPar, despite a positive room Forecasts for December in Munich are still cautious. A slight increase in occupancy of 0.3% is rate forecast (up 3%). Many trade shows, such as the Nortec fair (21 to 24 January 2014) and the expected, but a 0.1% decline in room rates is also congresses that took place in 2014, will be absent in 2015. With regard to the room rates fore- December contains three full business weeks, forecast. This means that RevPar will slide by 0.2%. cast, many hoteliers are already registering a very which could represent many guests at high room good advance booking level in response to various rates, especially because the third Advent week is events, as well as a significantly growing demand a relatively long time before Christmas. There will in the MICE segment. In January 2015, Hamburger hoteliers expect more short-term booking inquiries for annual kick-off events and tourist trips. Munich November means three full business weeks for Munich hoteliers. Forecasts are correspondingly enthusiastic. Occupancy is expected to rise by 6% com- Fig.7: Trendbarometer Munich 2014 Trend versus last year Last Year November 6,4% 11,1% Dezember 18,2% 0,3% -0,1% Januar 0,2% 4,3% 18,2% 23,2% Occ ADR RevPAR Source: Fairmas GmbH / Data as of 05.11.2014 pared to last year and room rates by as much as be no trade fairs or other major events in December. Individual bookings are only being made at a 11%, thus leading to an 18% RevPar boost. This positive development is largely due to the electronica trade fair (11 to 14 November 2014), which still be any room for improvement. late stage; it remains to be seen whether there will is leading to a huge demand and high room rates. This year too, room rates are well above tho- Page 14
January 2015 in Munich is expected to be much better than in 2014 (Occ: +4.3%, ADR: +18.2%, RevPar: +23.2%). The main reason for this positive development is the BAU trade fair, which takes place every two years (19 to 24 January 2015). The public holiday on 6 January 2015 will have a negative effect on occupancy and room rates in the first week. However, even if one calculates for the low ADR associated with leisure sector business, this only serves to reinforce the enormous positive impact that the BAU event has on room rates and RevPar. Page 15
In Focus Provincial? Not in the slightest! The unnoticed destinations of Rostock-Warnemünde, Mainz, and Darmstadt The ABC of destinations The Fairmas regularly highlights Germany s most important A and B destinations. But what actually characterizes an A or B destination? If we look for classification criteria, we will encounter a variety of possible interpretations, the most important points of which are very similar or even identical. Important distinguishing features for classifying a location are, for example, its population, infrastructure, industry and trade, culture and education, administration, as well as the location s regional, national or even international significance. People travel from all over the world to cities such as Berlin, Hamburg or Munich; they are lured by tourist attractions just as much as by business meetings or international trade fairs. The hospitality industry is booming. We also examine some B destinations on a regular basis. There are also many other large cities that are of great importance for their respective region, the C destinations. We have systematically examined three such cities that are typical for this group and that are of both regional and national importance: Rostock-Warnemünde, Mainz, and Darmstadt. All three places possess similar parameters such as population, trade fair and convention centres; additionally, they are all university cities and transportation hubs. Here, we look at the examples of Rostock-Warnemünde, Mainz and Darmstadt. The hotels participating use Fairmas Hotel Benchmarking to provide the basis of their data analysis. Seite 16
Berlin Dusseldorf Frankfurt (Main) Hamburg Cologne Munich Stuttgart Fairmas Bochum Bonn Bremen Dortmund Dresden Duisburg Nuremberg Hannover Karlsruhe Leipzig Mannheim Munster Essen Wiesbaden Aachen Augsburg Bielefeld Braunschweig Darmstadt Erfurt Erlangen Freiburg (Breisgau) Heidelberg Kiel Lübeck Magdeburg Mainz Mönchengladbach Mülheim (Ruhr) Offenbach (Main) Osnabrück Potsdam Regensburg Rostock Saarbrücken Wuppertal Albstadt Aschaffenburg Bamberg Bayreuth Bergisch Gladbach Bottrop Brandenburg (Havel) Bremerhaven Chemnitz Coburg Cottbus Dessau Detmold Düren Eisenach Flensburg Frankfurt (Oder) Friedrichshafen Fulda Fürth Gelsenkirchen Gera Gießen Görlitz Göttingen Greifswald Gütersloh Hagen Halberstadt Halle (Saale) Hamm Hanau Heilbronn Herne Hildesheim Ingolstadt Jena Kaiserslautern Kassel Kempten (Allgäu) Koblenz Konstanz Krefeld Landshut Leverkusen Lüdenscheid Ludwigshafen Lüneburg Marburg Minden Moers Neubrandenburg Neumünster Neuss Oberhausen Offenburg Oldenburg Paderborn Passau Pforzheim Plauen Ratingen Ravensburg Recklinghausen Remscheid Reutlingen Rosenheim Salzgitter Schweinfurt Schwerin Siegen Solingen Stralsund Suhl Trier Tübingen Ulm Villingen-Schwenningen Weimar Wilhelmshaven Witten Wolfsburg Würzburg Zwickau D B Important centres: Multifunctional medium-sized and small cities Most important centres: Population: 500,000 and more National and/or international significance Large functioning markets in all segments Of interregional or international importance culturally Population: 100,000 and more Large cities with a major economic and cultural significance that is mainly interregional or national Important regional cities: Population: up to 100,000 Important cities Multifunctional large cities Of regional and limited national significance Important impact on the immediate surroundings regional focussed cities with significance for the immediate surroundings Low market volume and revenue C Seite 17 Sources: http://www.riwis.de/ http://www.mygeo.info & Fairmas
800.000 700.000 600.000 500.000 400.000 300.000 200.000 100.000 0 20% 15% 10% 5% 0% -5% -10% Fairmas Figures, trends, and developments: the cities of Rostock-Warnemünde, Mainz, and Darmstadt Rostock-Warnemünde The city of Rostock (to- 547.961 564.323 561.578 550.874 594.554 607.976 637.088 706.075 gether with its most famous district, the seaside resort 3,0% -0,5% -1,9% 7,9% 2,3% 4,8% 10,8% of Warnemünde), with more than 200,000 inhabitants, is the largest city in the state of Mecklenburg-Western Pomerania, as well as a tou- 2006 2007 2008 2009 2010 2011 2012 2013 Arrivals Change (%) Fig.1: Arrivals Rostock/Warnemünde (2006-2013) (Source:Statistical office Western Pomerania) rist growth region. The economic, cultural and scientific centre in North-eastern Germany has an important Baltic port that handles ferry and cargo ships, and one of Germany s largest cruise ship ports. Besides being a university and logistics site, Rostock is one thing above all: a tourism city that attracts guests from every German federal state and from abroad. In addition to the area s natural beauty, guests appreciate above all the widespread recreational facilities, water sports, shopping and culture, the family-friendly nature of the area, as well as health and spa opportunities. This is proven by the steadily growing visitor numbers: in 2013, more guests than ever visited this hanseatic city. The number of guests grew by 11% in 2013 compared to the year before. In addition to Germans generally growing liking for city breaks, this also shows that the wide-ranging efforts of tourism operators and hoteliers to make the low season attractive are now bearing fruit. During this time, holiday-makers arrive who appreciate tranquillity and quiet enjoyment, as well as spa and health services. Moreover, new and/or distinctive event formats are being introduced, such as the Warnemünde Wintervergnügen ( Warnemün- Seite 18
de Winter Fun ), Leuchtturm in Flammen ( Lighthouse in Flames ), and Kultur trifft Genuss ( Culture Meets Pleasure ). So is everything really OK? The downside is enormously tight cut-throat competition, with many new hotels having to compete for guests. This is the decisive cause of the development in 2014: year-todate figures show a minimal change in September with a RevPar increase of 0.4%, marked by downhill development in relation to occupancy (Occ: down 2.4%) although ADR rose by 3%. Let us look at 2014 at the Rostock-Warnemünde destination in more detail: Hotel & bed supply, Rostock-Warnemünde The beginning of the year Number of No. of available was difficult in economic Change Change hotels beds terms. With demand constant, 2009 108-10.349-2010 114 5,6% 14.029 35,6% more beds were 2011 2013 113 110-0,9% 0,9% 13.868 14.577-1,1% 6,1% 2012 2014 June 109 109-3,5% -0,9% 13.739 14.258-0,9% -2,2% available (partly due to the opening of the a-ja resort with 233 rooms in Warnemünde Fig. 2: Hotel & bed supply, Rostock-Warnemünde (2009-2014) (Source:Statistical office Western Pomerania) in March 2013). Due to the different timing of the Easter holidays this year (2014: 14 to 23 April; 2013: 25 March to 3 April) March also turned out to be just as problematic (Occ: down 14.4%). The turnaround came in April with a very positive overall development in RevPar of +13%, due to a sharp increase in occupancy (Occ: +5%) and room rates (ADR: +8%). The positive trend continued in May, with RevPar growing by 6%. The sunny weather of early summer was a big boost in May and made June very good all-round. The overall performance deteriorated slightly in July, the first month of the school holidays (RevPar: down 1%) despite the positive room rates (ADR: up 2%). Less leisure business could be generated (Occ: - 3%), due to the shift of the summer holidays (they began in mid-july in Mecklenburg-Western Pomerania; in 2013 the school summer holidays took up all of July). The improvement in ADR was largely due to a stricter price policy in some hotels. In addition, some hotels were able to register a stronger conference business, while other events, such as the N-JOY, and The Beach und Stars@ndr2 on 25 and 26 July were particularly in demand. Rostock-Warnemünde recorded a slight increase in leisure sector business due to the Seite 19
shift in the school summer holidays in Mecklenburg-Western Pomerania to mid-august and to the stable summer weather on the coast this August (Occ: up 0.1%). The Hanse Sail Rostock and the DFB Beach Soccer Cup were especially responsible for boosting room rates (ADR: up 5.4%). Taken together, this led to a 6% increase in RevPar. And September? The terms of overall performance, the coastal resort showed a 3% year-on-year improvement in RevPar. However, ADR and occupancy developed very differently to last year (Occ: down 3%, ADR: up 6%). While hoteliers on the coast were able to achieve stable room rates due to the longer school summer holiday in many states until the first week of September (especially in Lower Saxony), the good weather conditions, and the Warnemünde market, their colleagues in the city of Rostock itself complained of a decline in company and corporate business. 13% 0,1% 3% 8% 5% 6% 6% 3% 2% 1% 0,3% 2% 0,1% 5% 6% 6% 3% 3% 0,4% -3% -3% -5% -2% -3% -1% -3% -2% -14% -10% -23% January February March April May June July August September YTD September Occ ADR RevPar Fig. 3: Performance changes in 2014 Rostock-Warnemünde compared to the same month last year (Source: Fairmas) Conclusion and outlook: The new hotels that have opened since 2013 (the aja-resort in Warnemünde, as well as the Hotel Sportsforum, the Markgrafenheide beach resort and the Motel One the last three all in Rostock itself) accounted for a total of 640 new rooms. This ensured even greater more cut-throat competition, with a negative impact on the corporate segment in particular. The question of how the autumn-winter season will shape up remains an exciting one. In principle, the assessment for the next five months remains subdued due to the upcoming low season with short-term pick-up business for the Christmas season in November and December. Seite 20
600.000 500.000 400.000 300.000 200.000 100.000 0 30, 0% 25, 0% 20, 0% 15, 0% 10, 0% 5,0% 0,0% -5,0% -10, 0% -15, 0% Fairmas Mainz 447.707 448.145 460.331 430.849 487.205 530.394 549.381 569.940 Mainz is the capital of Rhineland-Palatinate and, with more than 200,000 inha- 13,1% bitants, it is also that fede- 0,1% 2,7% 8,9% 3,6% 3,7% ral state s largest city. This university town with a his- -6,4% tory going back more than 2006 2007 2008 2009 2010 2011 2012 2013 Arrivals Change (%) Fig.4: Arrivals Mainz (2006-2013) Source: Statistical office of Rhineland-Palatinate 2000 years is headquarters to a number of television and radio stations and sees itself as a stronghold of the Rhineland Carnival. In 2013, the city where printer Johannes Gutenberg was born set a record with almost 570,000 arrivals. The YTD figures until September show the stability of this development, with a RevPar plus of 6%, due to a very high (6%) increase in occupancy. Mainz is also benefitting from a strong trade fair year, because many more trade shows, congresses and events take place here in the even numbered years than in the odd, relatively poorer trade fair years. Also worth mentioning are the city s plans and activities to profile and promote the attractiveness of the destination under the umbrella of mainzplus Citymarketing GmbH in a partnership of government, university, hoteliers and other tourism managers. These numbers provide more than a hint that it has been successful. This is what we will see in Mainz as a destination in 2014: The deterioration of the overall performance by 8% in January was due to a similar sharp drop (8%) in occupancy. While a number of carnival events attracted guests in January 2013, this year they were held a month later. February benefited from this, as well as from the first-ever annual kick-off event of a large insurance company with 700 guests (approx. 450 overnight stays). This meant a 9% rise in ADR and a similar 9% growth Seite 21
Hotel & bed supply, Mainz Number of hotels Change No. of available beds Change 2007 39-4.948-2008 39 0,0% 4.933-0,3% 2009 42 7,7% 4.671-5,3% 2010 41-2,4% 4.999 7,0% 2011 43 4,9% 5.211 4,2% 2012 41-4,7% 5.200-0,2% 2013 43 4,9% 5.493 5,6% 2014 April 43 0,0% 5.205-5,2% Fig.5: Hotel & bed supply, Mainz (2006-2013) (Source: Statistical Office of Rhineland-Palatinate) in RevPar. The upward trend continued throughout March with a 16% increase in occupancy. The causes were - as so often - a series of large conferences and events: from 14 to 16 March there was a medical congress, which takes place on a two-year cycle with 800 participants, estimated overnights: 2300; from 24 to 28 March the spring meeting of the Deutsche Physikalische Gesellschaft at the University of Mainz, with 1400 participants, estimated overnight stays: 5000 (a similar event last took place in 2012). The good March figures could not be maintained in April and there were poorer results in all performance areas: Occ: -6%, ADR: -2.2%, and RevPar: -8%. This was mainly due to the Easter holidays, which allowed far less corporate business. That which April lacked was a benefit to May: a huge (29%) increase RevPar thanks to a growth of 22% in occupancy and a 5% improvement in room rates. Three heavyweight congresses contributed to this fantastic result: the CIMT medical congress was held from 6 to 8 May (900 participants, estimated overnight stays: 2500); the JAX IT congress took place from 12 to 16 May (1000 attendees, estimated overnights: 4000); while the annual general meeting of the Museumsbund (Museums Association) was held from 4 to 7 May, attracting 450 participants, and an estimated 1300 overnight stays). June was mixed. RevPar was down by 4%, mainly due to the fall in room rates (ADR down 5%). June 2013 had been a strong month for corporate business. In 2014, the two public holidays (Whit Monday and Corpus Christi) had a negative effect on two full business weeks. Besides this, the Techtextil event in Frankfurt (held every two years) had ensured healthy overflow business in Mainz in 2013. In July, the overall performance (RevPar: up 13%) improved, mainly due to the good occupancy figures (Occ: up 13%). This was due to both the flourishing conference business and the later start of the school holidays in Rhineland- Palatinate (at the end of July). Another factor was the Summer in the City music festival, with artists such as Elton John, Neil Young, and Unheilig. These open-air events attracted nearly 55,000 visitors and led to Seite 22
many extra overnights. August was also positive: the total market grew (RevPar: up by 2%), mainly due to a rise of more than 5% in occupancy. A major international medical conference (the 47th International Congress of Pathology with more than 3500 overnight stays) ensured good figures, as did a corporate event with an additional 1500 overnights. A number of major events such as Summer in the City, Rhein in Flammen ( Rhine in Flames ) and the Sunday TV show ZDF-Fernsehgarten clearly boosted demand. The James Rizzi exhibition (the New York Atelier) from 18 July to 14 September carried on seamlessly where the last exhibition left off in the summer of 2008, attracting more than 30,000 guests and ensuring further overnight stays in Mainz. The Mainz Wine Market succeeded in attracting a record 380,000 visitors. The later start of the school summer holidays (2013: 8 July to 18 August; 2014: 28 July to 7 September) resulted in lower room rates in August with fewer corporate sector bookings (ADR: down 3.3%). Growth in Mainz continued in September (RevPar: up 9%). Numerous events and congresses (the Veterinary Medical Congress with 600 participants, estimated overnight stays: 1600; the German Nature Conservation Congress with 450 participants, estimated overnights: 2000; the Meeting of the Society of German Natural Scientists and Physicians, 700 participants, estimated nights: 1800; the EMC Forum, with 600 participants, estimated overnights: 600; the International Electrochemistry Conference, 450 participants, estimated overnights: 1200) took place in Mainz and provided better occupancy results (Occ: up 6%) and improved room rates (ADR: +3.3%). 29% 22% 9% 9% 16% 7% 5% 1% 13% 13% 9% 5% 6% 6% 3% 2% 6% -0,1% -0,5% -8% -8% -8% -2% -6% -8% -5% -4% -0,1% -3% -0,1% January February March April May June July August September YTD September Occ ADR RevPar Fig.6: Performance changes in 2014 Mainz compared to the same month last year (Source: Fairmas) Seite 23
330.000 280.000 230.000 180.000 130.000 80. 000 30. 000-20.000 50, 0% 40, 0% 30, 0% 20, 0% 10, 0% 0,0% -10,0% -20,0% Fairmas Conclusion and outlook: The performance in the printing and media city impressed all round. The figures show well-founded and solid progress. Such developments do not happen by chance. In Mainz, they have mainly been due to the combined activities of all the major tourism service providers, in close cooperation with the mainzplus CITYMARKETING GmbH company. This invigorates both the conference and congress destination, as well as the cultural and leisure activities. In the view of many insiders, 2014 has been a particularly strong year for hoteliers in Mainz. The increase in the number of beds appears moderate and well-planned. Discussions are taking place in the city about a new four-star hotel next to the palace. A feasibility study is being prepared, and it is due to be completed by the spring of 2015. Darmstadt: 264.701 269.733 290.086 295.531 310.833 317.459 Darmstadt in South Hesse, with a population of 226.164 216.189 around 150,000, has been allowed to call itself a Wis- 22,4% senschaftsstadt ( Science -4,4% 1,9% 7,5% 1,9% 5,2% 2,1% City ) since 1997. Here, a technical university, two polytechnics with appro- 2006 2007 2008 2009 2010 2011 2012 2013 Arrivals Change (%) Fig.7: Arrivals Darmstadt (2006-2013) Source: Statistical Office of Hesse ximately 41,000 students, as well as over 30 other research facilities and institu- Seite 24
tions are actively researching and working. They include such renowned bodies as the European Space Agency s European Space Operations Centre (ESA/ESOC) and the European Organisation for the Exploitation of Meteorological Satellites (EUMETSAT). This affinity with education also determines the congresses that take place. The year-to-date figures show an excellent overall performance for Darmstadt up to the month of September. 2014 at destination Darmstadt: Hotel & bed supply, Darmstadt Experience shows that Number of No. of available January is a bad month in Change Change hotels beds Darmstadt (with RevPar 2006 - - 3.349-2007 - - 3.335-0,4% decline of 5%), mainly due 2008 - - 4.120 23,5% 2009 40-4.048-1,7% to negative development 2010 41 2,5% 4.302 6,3% in terms of occupancy 2011 41 0,0% 4.250-1,2% 2012 43 4,9% 4.281 0,7% (Occ down 9%). This time, 2013 42-2,3% 4.374 2,2% all the hoteliers complained 2014 May 41-2,4% 4.478 2,4% about the start to the Fig.8: Hotel & bed supply Darmstadt (2006-2014) Source: Statistical Office of Hesse year because not even the Heimtex home-textile fair in Frankfurt provided any respite, and the month only picked up speed very slowly due to the long school Christmas holidays that carried on until 11 January. February made up for the poor start to the year with extremely positive overall figures and a 16% increase. The later-than-usual Carnival at the end of February and beginning of March boosted corporate bookings. The Ambiente trade fair in Frankfurt and the Dt. SQL Server IT conference at the Darmstadtium were also important. March was excellent with a further 19% increase in RevPar, which could be attributed to an extremely high (26%) surge in occupancy. Due to the different timing of the Easter and the Easter school holidays this year, it was a full business month (except for the first three days of Carnival). The city s hoteliers consistently reported hotels being booked out from Monday until Friday almost every week. April lacked the factors that had benefited the month of March (Occ: down 14%). The later Easter holidays also left their mark. Unlike the same month last year, May profited from the fortunate calendar. The month was marked by a tremendous figures (Occ: +30%, Seite 25
ADR: +4%), as there was hardly a room to be booked in Frankfurt, either. The Microsoft Synopsis 2014 and XXIV Quark Matter Conference were held in the Darmstadtium. During the first half of the year, May was by far the best month in Darmstadt and surrounding areas. The public holidays and the late start of the school summer vacations had a negative effect on June, a month in which corporate business levels were much lower than in 2013 (Occ: -8%, ADR: -10%, and RevPar: -18%). July was marked by a very strong improvement in overall performance (RevPar: + 41%). The late start of the school summer holidays in Hesse at the end of July ensured a full business month with plenty of corporate and meeting sector trade (Occ: +33%) and ADR (+6%). In August, Darmstadt s performance shone at all levels: Occ: +45%, ADR: +1.3% and RevPar: +47.2%. The two-week-long International Summer School Courses for New Music, run by the Darmstadt Institute of Music were responsible for these excellent results. In September, the positive trend continued with is a 7% increase, mainly due to the 5% year-on-year growth in occupancy. The IAA trade fair in Frankfurt had far less impact on Darmstadt than this year s Automechanika event. During these strong top-ranking trade fairs, many visitors take advantage of Darmstadt s closeness and first-rate transport connections to avoid paying Frankfurt s high room rates. 4% 26% 16% 14% 2% 19% 30% 4% 35% 45% 47% 41% 33% 6% 5% 1% 1% 7% 11% 10% -9% -5% -5% -14% -1% -14% -8% -10% -18% -1% January February March April May June July August September YTD September Occ ADR RevPar Fig.9: : Performance changes in 2014 Darmstadt compared to the same month last year (Source: fairmas) Seite 26
Conclusion and outlook: One exciting development hoteliers had prepared themselves mentally for an economically weak year, because a commercial giant (Procter & Gamble/Wella) had left the city and while some large conferences and events (e.g. Deutsche Post and Deutsche Telekom) had been cancelled. The actual figures do permit some restrained optimism, even if the global player left a large gap that no other company is currently filling. The Darmstadium is a big plus for the exhibition, conference and events scene. Maybe the city also neds a five-star hotel? Opinions differ on this point. The outlook towards a solid location policy is unanimous: no further hotel openings are planned in the near future. Seite 27
The Fairmas is published by: Fairmas Gesellschaft für Marktanalysen mbh, Sachsendamm 6, 10829 Berlin, Deutschland Solutions Dot WG GmbH, Kranzer Strasse 6-7, 14199 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, e-mail: hotel-report@fairmas.com Gabriele Kiessling, Consultant und Project Management, Solutions Dot WG GmbH, e-mail: hotel-report@fairmas.com Page 28
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, Fairmas 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. Page 29