Hotel, Tourism and Leisure. Special Market Reports Issue 14 - GERMANY

Transcription

1 Hotel, Tourism and Leisure Special Market Reports

2 COUNTRY / FACTS & FIGURES Population 80.2 Million GDP (Gross Domestic Product) EUR 2,644 Billion GDP Growth 0.7% Tourism Share of GDP 2.4% Tourism Share of Employment 1.9 Million Inflation Rate 1.8% ECONOMIC IMPORTANCE OF TRAVEL & TOURISM: Total expenditure by tourists Billion (87% domestic, 13% international tourists) Total national gross value added (direct, indirect and induced effect) Billion POPULATION MAJOR CITIES: Berlin 3.4 Million Hamburg 1.8 Million Munich 1.4 Million Cologne 1.0 Million Frankfurt 700,000 Dusseldorf 600,100 TOTAL Hotels 15,000 INTRODUCTION The Horwath HTL Special Market Report: Germany, briefly introduces the current economic situation in Germany with particular focus upon tourism. GERMAN ECONOMIC SITUATION 2012/13 Germany has a population of around 80 million, the largest population of the European countries with 230 people per square kilometre. A general overview outlines the country s current performance and is followed by detailed supporting facts and figures. Tourism developments are presented to emphasize the importance of the tourism industry to the German economy. The capital of Germany is Berlin, which is also the largest city with a population of 3.4 million; followed by Hamburg (1.8 million), Munich (1.4 million), Cologne (1 million), and Frankfurt am Main (approx. 700,000), the centre of international finance. Finally, this report outlines important challenges for Germany s tourism industry and gives an outlook for the coming few years. Germany is Europe s leading exporter of machinery, vehicles, chemicals, and household equipment and benefits from a highly skilled labour force; in purchasing power parity terms it is the fifth largest economy in the world.

3 At the same time it is the most important economy in Europe, it holds the key to solving the euro zone s debt crisis and the driving force for growth in Europe. In 2012, the German economy proved very resilient. Regardless of any negative impact of the European economic crisis, GDP increased by 0.7%. The increase is due to strong foreign trade, the domestic consumption (expenditure increase of 2.4%), and the 2.3% increase in available income in private households. Germany s export of merchandise and services increased by 4.1% in 2012 compared with the previous year underlining that Germany s trade is very well positioned. On the other hand, investments did not add to the GDP growth. They experienced a considerable decline, which is not expected to improve in TOURISM DEVELOPMENT IN GERMANY Tourism is a large contributor to Germany s economy. In 2012 the total expenditure by tourists totaled EUR billion. Even at a time of economic difficulty, Germany is becoming an increasingly popular destination for travellers from all over the world. Berlin, now the third European city in terms of annual overnights (after Paris and London), boasts 24.8 million room nights with other key cities in Germany showing positive development as well; foremost Munich and Hamburg recently experienced high occupancy increases in spite of new hotel supply. In total, Germany has 15,000 Hotels, of which 3,850 are branded. Germany has 15 cities that record annual overnights of more than 1 million: Berlin 24.8 million Munich 12.4 million Hamburg 10.6 million Frankfurt 7.1 million Cologne 5.08 million Dusseldorf 4.05 million Dresden 4.04 million Stuttgart 3.1 million Nuremberg 2.5 million Leipzig 2.5 million Hannover 2.1 million Rostock 1.7 million (including camping sites) Lübeck 1.4 million Freiburg 1.1 Million (including camping sites) Karlsruhe 1.0 Million

4 It has also experienced a double digit growth with visitors originating from China, Russia, Middle East and India, not simply because of its unique cultural landscape in the very heart of Europe. Besides the majestic beauty of castles and palaces, fascinating museums, and the music of some of the most famous classical composers, tourists from the new markets are attracted by the wealth of 5* hotels and resorts, infrastructural excellence, luxury shopping possibilities at relatively moderate prices and last but not least specialist medical treatments at hospitals and clinics that are highly trained and ready to cater for specific needs. Germany's landscapes offer a wealth of options for an unforgettable holiday with the most preferred regions being Bavaria, Berlin, North Sea, Lake Constance (Bodensee) and the Black Forest. In 2012 the figures released at ITB in Berlin by the World Travel & Tourism Council (WTTC) show that the overall size of Germany s Travel & Tourism industry remained at EUR 64.2 billion, the same size as in Germany is unrivalled as the world s number one country for trade fairs, hosting two thirds of all global flagship exhibitions. The 135 international trade fairs held in Germany in 2010 attracted at least two million foreign visitors alone. Furthermore, Germany is among the top 10 worldwide destinations in tourism and culture. Without doubt the Fifa World cup in 2006 had lasting positive effects on the image of Germany. GERMAN NATIONAL TOURIST OFFICE The German National Tourist Board (GNTB) is proactively engaged in promoting Germany as a sustainable and leading tourism destination among existing and emerging markets. GNTB has been working internationally to promote Germany as a travel destination for more than 60 years. It communicates the diverse appeal of the country to a worldwide market, thereby promoting a strong and attractive brand Destination Germany. Germany hosts many important tourism related trade Fairs, the ITB in Berlin, the most important tourism fair worldwide and IMEX one of the top three fairs dedicated to Meetings, Incentives, Congresses and Events. CHALLENGES IN TOURISM The German economy saw good real GDP growth in 2011, which positively affected domestic and outbound flows and stimulated leisure and business travel. Following a strong recovery in 2010, consumers showed fairly high economic confidence in the first half of 2011 and were more likely to take one or more vacations, both domestic and abroad. Hoteliers, tour operators and airlines benefited from increased demand resulting from the more positive economic situation. However, when the Euro zone debt crisis occurred in the second half of 2011, the consumer confidence index dropped considerably in Germany, with many consumers concerned by the prospect of another economic slowdown. This had only a limited impact on inbound German travel and tourism, since many book holidays months in advance. In addition, while afraid of potential economic consequences, most consumers did not experience any negative effects by the end of the year.

5 STRUCTURE OF GERMANY S HOTEL MARKET Germany s hotels, guesthouses and other types of accommodation are among the best in Europe. Each city in Germany operates at differing levels of maturity and profitability and may be at different stages of the hotel cycle. In 2012 Germany had a new record of over 400 million overnights. Undermining its position as a tourist hotspot, Germany shows the highest demand by foreign tourists during the summer months of July & August. Main benefiters of the visitors are Bavaria and Wuerttemberg that offer a vast array of lakes, castles, forests, excellent health facilities and other touristic attractions. As price wars arise, the introduction of higher net room rates will represent a growing challenge, especially given that 2012 showed only a marginal increase and even this proved to actually represent a fall in prices when adjusted for inflation. The top five performing cities in Germany compared with the top five cities in Europe sell at reduced rates. The average rate per night in Munich, the city with the highest ADR in Germany sells at EUR 123, which is less than half the average rate in Paris EUR 256, the number one European city in terms of ADR. This shows the vast potential for increased revenue generation for the future. 56% of the foreign visitors in Germany normally stay at hotels and only 3% at Inns, whereby 54% of overnight stays are in towns and cities with a population of more than 100,000. Out of the 407 million overnights Germany generated in 2012, 17% were made up by foreign visitors. It is noteworthy to mention that international overnights increased by 8.1% per year on year affirming Germany s tourist reputation abroad. Again, Munich confirms its status as a sought after hotel investment destination with a record breaking increase in overnights of 7.8 % for the first half year of 2013 year on year.

6 OUTLOOK & OPPORTUNITY Germany has an excellent price/performance ratio in hotel accommodation and remains Europe s strongest investment market for new hotel projects. More than 16,800 new hotel beds will enter the German tourism market in the forthcoming months, of these 3,000 in Berlin alone. The German capital continues to be at the center of attention of the hotel industry and remains sought-after by investors with some 380 hotels to open within the next three years. More than ever international hotel investors have Germany on their radar. It is certain that the tourism industry in Germany will continue to rise, in the case of no major global economic stagnation. PREPARED BY: Rudiger Knospe Managing Director Horwath HTL Kaiserstr. 47 Frankfurt am Main 60329, Germany Tel: rknospe@horwathhtl.com These days all eyes are on the new breed of three star design hotel chains (Motel One, B&B etc.), that will eventually displace the private hotel industry once they have penetrated the B & C destinations. This is due to the low accommodation rates, excellent value for money, easy bookable rooms and strong brand recognition. Given the relatively low percentage of branded hotels we do believe that now is the right time to invest and enter into Germany. There is tremendous potential for well-established brands to capture their fair share of travellers, given the current structural changes in the mid to budget market. Germany, being decentralized, boasts 15 strong performing destinations and a large portfolio of B and C destinations that all offer opportunities for sustainable development. PREPARED BY: Tom Goldscheider Senior Consultant Horwath HTL Kaiserstr. 47 Frankfurt am Main 60329, Germany Tel: tgoldscheider@horwathhtl.com Given the size of Germany and variety of destination, a market entry needs to be thoroughly planned and implemented.

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