MKG

Chain hotels in Germany ended the 2008 year far better than in most European countries, but as the economic downturn begins to take its toll, the country will also suffer from less trade fairs being organised this year.

The German chain hotel market ended the year with a 1.8% increase in Revenue per Available Room (RevPAR), making it one of the best-performing European countries in 2008.

According to MKG Hospitality’s market monitoring database, Hotel CompSet, Average Daily Rate (ADR) rose by 3.9% compared to 2007, whilst Occupancy Rate (OR) saw a slight reduction of 1.3 percentage points. Budget and Midscale chain hotels achieved the best results in 2008, both with a 3.1% increase in RevPAR, fuelled by a 6.2% and 5.5% increase in ADR, respectively. The Upscale segment only managed a 0.9% increase in RevPAR, whilst OR weakened in all categories.

“We can expect this trend to continue during 2009’s economic downturn, as people cut back on expenses and travel less,” stated Director of Development, MKG Hospitality, Vanguelis Panayotis.

“Germany particularly relies on the MICE sector, which is also forecasted to suffer this year. The economic crisis will continue to force many businesses to cut back on business travel as much as possible, as well as spend a lot less on marketing and promotions. Furthermore, there are fewer trade fairs planned in 2009,” added Panayotis.

Germany’s overall positive performance in 2008 was fuelled by high RevPAR increases in Essen (18.7%) and Dusseldorf (16.3%) for example. According to Panayotis, these destinations hosted a great deal of trade fairs, consequently boosting their demand and allowing hoteliers to raise average selling prices.

“There is no doubt that the market will contract and we will see some capacity increases continue from projects already started. However, we also see that many customers are now moving away from the 5-star luxury brands to the upscale segment, where Mövenpick is well positioned,” commented Senior Vice President Europe, Mövenpick Hotels & Resorts, Ola Ivarsson.

Switzerland achieved an 8.5% increase in RevPAR for 2008, driven by a 9.7% rise in ADR. The Midscale segment was especially buoyant with RevPAR soaring 12.6%. Although promising results, these figures mainly represent key cities in Switzerland – heavily revolving around business travel, summits and conferences.

Like in Germany, Switzerland’s MICE segment is also expected to somewhat shrink in 2009, as Associate Director, Turicum Hotel Management, Konrad de Vries explains: “Switzerland, as compared to Germany entered the meltdown cycle about two or three months later and as such RevPAR growth reflects the good performance of the first 10 Months of 2008.”

“We experienced a down-trading in the MICE Market (from luxury/first class to mid-market hotels), and the AIG Syndrome with regards to Corporate expenditure. As a result, the branded mid-market hotel sector will benefit and do well in 2009, whilst the upscale sector, with or without discounting, will be back to 2001’s RevPAR’s.”

Although Vienna on its own stayed clear from the negative zone, Austria’s global RevPAR decreased by 1%, mainly due to a four percentage point reduction in OR and only a modest increase in ADR (4.6%).

About MKG Group | Established in 1985, MKG Group has built a reputation for solid business expertise and substantial know-how in the fields of tourism, lodging and food service. MKG Group meets the needs of each of its clients by providing the valuable analytical and decision-making skills necessary for success. .

Methodology & Innovation | With a team of over 60 experienced consultants, as well as advanced research and analytical tools and applications, MKG Hospitality provides unique savoir-faire in four major areas of expertise: Market Research; Financial Feasibility Studies; Consulting; and Sector publications.

MKG Hospitality is a global leader in tourism, hotel and catering consulting, with the largest database in the world (outside the US), representing all segments from budget to upscale hotels. MKG’s customised database, Hotel CompSet, contains a sample of over 200 brands and 11,000 corporate chain hotels, representing more than one million rooms. Hotel CompSet provides daily, monthly and yearly monitoring of hotel indicators and analyses of its sample. .

Together with other specialised brands, MKG Qualiting, OlaKala, Worldwide Hospitality Awards, Global Lodging Forum, HTR Magazine and Hotel Restau Hedbo, MKG Group supports investors, hoteliers and key tourism players improve performance, boost productivity and achieve optimal results.

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