Munich Market Spotlight - YE August 2026

OVERVIEW

Munich’s hotel market generated moderate top-line growth in YE August 2026, with total operating revenue increasing by €4.0 PAR (+2.1%) to €196.1 PAR. However, operating expenses rose at a faster pace (+3.9%), leading to a €0.7 PAR (-1.1%) decline in GOP to €68.7 PAR, while GOP margin contracted by 1.1 percentage points to 35.0%.

Despite a moderation in trading performance, Munich’s underlying market fundamentals remain healthy. Supply growth was limited to 0.6% in YE August 2026 year-on-year, while current performance reflects a normalization from the elevated comparables of H1 2025, when the market benefited from major events such as Bauma and the UEFA Champions League Final.

Market occupancy increased by 0.9 percentage points to 74.7%, indicating continued demand growth. However, this was offset by a 1.5% decline in ADR to €196.3, resulting in RevPAR decreasing by 0.4% to €146.7.

F&B was the main driver of revenue growth, increasing by €4.4 PAR (+11.5%) and more than offsetting declines in Rooms revenue (-€0.6 PAR, -0.4%) and Miscellaneous Income (-€0.3 PAR, -9.3%). F&B revenue growth also remained ahead of the increase in departmental expenses.

Total operating expenses increased by €4.8 PAR (+3.9%) to €127.4 PAR, primarily driven by higher Payroll, Other Expenses and Cost of Sales, while Utilities remained broadly stable.

SUPPLY

Four new hotels opened in Munich during the 12-month period ending August 2026, adding 467 rooms. The repositioning of the former Roomers as The Dean returned a further 281 rooms to the market, bringing total supply additions to 748 rooms. On an opening-date-adjusted basis, this represents a +0.6% increase in overall market supply.

Identified supply additions remained highly concentrated, with ibis Styles (358 rooms) and The Dean (281 rooms) accounting for 85.4% of identified additions. ibis Styles strengthened the Midscale offering in the airport catchment area and complemented wider infrastructure enhancements, notably the Terminal 1 Pier expansion (April 2026), which added capacity for up to six million passengers per year.

The most significant near-term opening is the 277-room AMANO hotel in in Ludwigsvorstadt-Isarvorstadt. Over the following 12 to 18 months, three additional projects comprising of 523 rooms are targeted for delivery across Munich and the surrounding market area.

The announced near-term pipeline equates to a further 0.7% opening-date-adjusted increase in supply over the next 12 to 18 months, based on current opening schedules.

COSTS

PAYROLL COSTS

Payroll costs increased across most operating departments in YE August 2026, rising by €3.2 PAR (+5.0%) to €67.3 PAR. Growth was primarily driven by labor expenses in Food & Beverage (+€1.0 PAR, +5.0%), Sales & Marketing (+€0.7 PAR, +13.1%), and Administration & General (+€0.6 PAR, +7.4%), while Rooms payroll remained broadly stable (+€0.1 PAR, +0.5%). I&T was the only department to record a decline in labor expenses (-€0.1 PAR, -9.1%). The increase in payroll costs likely reflects the combined impact of Germany’s 8.4% statutory minimum wage increase implemented in January 2026, alongside broader wage inflation and ongoing staffing pressures.

COST OF SALES

Cost of Sales increased to €18.1 PAR (+4.4%), compared with €17.3 PAR in YE August 2025. The increase was primarily driven by higher F&B costs (+€0.5 PAR, +5.1%) and Rooms related expenses (+€0.3 PAR, +3.3%).

UTILITY COSTS

Utility costs remained broadly stable at €7.7 PAR (+0.4%) between YE August 2025 and YE August 2026. Lower electricity costs (-€0.3 PAR, -8.9%) were offset by increases in Water/Sewer (+€0.1 PAR, +15.2%) and Fuels, Gases & District Energy (+€0.1 PAR, +3.1%).

OTHER EXPENSES (excl. Utilities)

Other Expenses increased by 4.1% YoY to €32.2 PAR from €30.9 PAR last year. The increase was mainly driven by higher Rooms costs (+9.3%), alongside increases in F&B (+4.8%), A&G (+3.7%) and S&M (+1.7%). This was partly offset by reductions across OOD (-20.8%), I&T (-15.9%) and POM (-14.3%).

PROFIT & LOSS STATEMENT

Departmental Revenues

Total revenue across the Munich market increased by 2.1% (+€4.0 PAR) to €196.1 PAR. Growth was primarily driven by F&B revenue (+€4.4 PAR, +11.5%), alongside increases in OOD (+€0.4 PAR, +8.3%), partly offset by lower Rooms revenue (-€0.6 PAR, -0.4%) and Miscellaneous Income (-€0.3 PAR, -9.3%).

Departmental Expenses

Departmental expenses increased at a faster rate than revenue, rising by €3.1 PAR (+4.0%) to €80.7 PAR. The increase was primarily driven by F&B expenses (+€1.6 PAR, +5.0%) and Rooms expenses (+€1.4 PAR, +3.2%), while OOD expenses increased by €0.1 PAR (+2.9%).

Undistributed Expenses

Undistributed expenses increased by €1.7 PAR (+3.8%) to €46.7 PAR, with their share of revenue increasing slightly from 23.4% to 23.8%. Growth was driven by A&G (+€0.8 PAR, +5.6%), S&M (+€0.7 PAR, +5.4%) and POM (+€0.3 PAR, +3.9%), partly offset by lower I&T expenses (-€0.1 PAR, -2.5%).

Gross Operating Profit

GOP declined by 1.1% YoY to €68.7 PAR, as growth in departmental and undistributed expenses outpaced the increase in revenue. As a result, GOP margin contracted by 1.1 percentage points to 35.0%, highlighting increased pressure on operating profitability.