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26 Sep, 2017

Berlin: One Of The Best Place To Grow

Berlin: One Of The Best Place To Grow


Berlin is not only the political center of Germany, but also an important cultural destination. By the end of 2016 the share of foreign visitors amounted to about 45%. The German capital is young and vibrant, and in the last few years has increasingly attracted start-up companies. As such, the city welcomes both leisure and business travellers. In 2016 business stays amounted to approx. one quarter of all overnight stays.

Historical trading

The strong 8.3% y-o-y growth in 2015 was not to be repeated in 2016. Berlin ́s RevPAR still increased by 3.6% and reached €74 in 2016. The result was mainly driven by an ADR of €96 in 2016 compared to €93 in 2015. In contrast, average occupancy of 77% remained roughly on the same level as 2015 (+1%). Berlin ́s occupancy rate is still above the German average. The terrorism attack in December 2016 led to hotel booking cancellations. However, the impact has not been as significant as those seen in Paris and Brussels recently.

Supply trends

In 2016 there were at least 15 new hotels in the Berlin pipeline ranging from the budget segment up to exclusive four-star-hotels. This will add about 3,700 hotel rooms to the current market within the next two years.

Motel One is further expanding its business and in 2017 opens two new hotels. One of them will be operated within the new Upper West property, a 118m high building very well located within the city centre in the Western part of Berlin (582 rooms). The other Motel One opening will be next to the Alexanderplatz. This high-rise building will comprise 708 rooms and will be the largest Motel One Hotel in Germany. The midmarket segment in general is very well supplied in the pipeline of hotel projects in Berlin.


Investment in the German hotel sector has proven again to be very attractive in 2016. The biggest portfolio deal was the acquisition of the former Interhotel portfolio by Foncière des Régions — including the Park Inn Berlin Alexanderplatz (1,012 rooms), the Westin Grand (400 rooms) and also the Mercure Hotel Potsdam (Greater Berlin, 210 rooms).


With several upcoming cultural events, such as Luther 2017, Berlin should record increasing tourist numbers in 2017. To ensure this, a new website called «365/24 Berlin» has been launched in 2016 and will be promoted worldwide.

After years of delay, Berlin Brandenburg Airport is now expected to open in 2018 and will be able to handle the growing tourism volumes. New overseas connections will support tourism and the MICE segment will benefit from the new airport.

Berlin reached a landmark 30 million overnight stays already in 2015 and 40 million stays in the medium term is considered realistic.

2017−2018 forecast

The German economy grew by 1.7% in 2016, largely due to low oil prices, low interest rates and low inflation which drove private consumption and outweighed the decline in external demand from emerging markets. In 2017 and 2018, the economy is forecast to continue to grow, albeit more slowly, by 1.4% and 1.5% respectively. The lower growth is driven by the rebound in inflation and energy prices. Unemployment is expected to remain at historic lows in 2017 and 2018.

Berlin is increasingly attractive as a tourist destination and a magnet for new hotels and business conferences, especially in the start-up arena. RevPAR grew strongly in 2016 and we forecast continued growth in 2017 and 2018, mainly driven by increases in ADR.

Read also: Emerging Trends in Real Estate in Europe 2017 and beyond, European City-hotels In 2017 and 2018, European Hotel M&A Trends for 2017, European Hotel M&A Activity in 2016

Know more about best places to grow: Amsterdam, Barcelona, Berlin, Budapest, Dublin, Milan, Lisbon, Madrid, Frankfurt

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