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Fairmas

Hotel Report

NOVEMBER 2017

PERFORMANCE ANALYSIS OF

OCTOBER 2017 IN MAJOR

GERMAN DESTINATIONS

AND A VIEW

OF THE NEXT THREE MONTHS

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October 2017 –

Expectations were too high

Occ: 83.4%, ADR: 100.50€, RevPar: 83.8€

Expectations for the extended weekend of the German Unity Day

proved to be too high. Even the “Reformation weekend” was disap-

pointing. In fact, numbers slid for Berlin hotels during the extended

weekend from 27.10 - 31.10 compared to last year. All three key fig-

ures are in the red zone (Occ. -1,8%, ADR -3.5%, RevPar -5.3%). The

fact that despite the low demand, the average room rate and hence

also the RevPar year-on-year comparison could be increased, owing it

to the World Congress of Psychiatry (WPA), the Orthopedic Congress

as well as another one to two conventions.

November: Occ: - 2.8%; ADR: 2.4%; RevPar: -0.4%

A trend change looks somewhat different. Even though demand is rising, the occupancy forecast improves from - 4.6% in the previous

month to "only" -2.8%, and for ADR - one percentage point. The MICE business with Retail World, Cosmetica and the Boot & Fun from

23.11 to 26.1,1 and about 42,000 visitors to the city, however, contribute to its stability.

December: Occ: - 2.8%; ADR: 2.1%; RevPar: -0.7%

Nothing much has changed compared to the previous month’s forecast apart from slight improvements: pickups are slowly becoming

visible for the Advent weekends, and the favorable position of New Year's Eve falling on a Sunday extends the stay of the expected

tourists by one day.

January: Occ: 0.6%; ADR: 5.7%; RevPar: 6.3%

January should perform well thanks to trade fairs and fashion events taking place. The event year starts again with Berlin Tourism Fair,

Green Week, Berlin Fashion Week and the Hippologica, - which attracted at least 39,000 horse lovers to come to Berlin in January 2017. 11|17 Fairmas Hotel Report

in cooperation with Solutions Dot WG

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October 2017 – Did not get

better this year Occ: 72.3%, ADR: 134.1€, RevPar: 97.0€

The double-digit decline of the ADR and RevPar could be mainly

attributed to the fact that last year’s International Plastics Trade

Fair, or K-fair, created a strong demand with a 92% occupancy rate

achieved across all hotel categories for the K-Messe 2016, plus

€266 RevPar associated with an average room rate of € 288.

There was also no spillover effect from the successful Anuga 2017

and smaller K + K Messe from Cologne that could have helped to

get close to the 2016 figures. Unfortunately, the plastics trade fair

only takes place every three years. The leisure sector in Düsseldorf did not

fare better either. Hopes on the German Unity Day occasion and bridge

days also ended in disappointment. The analysis of the Reformation week-

end also showed a decline in occupancy by -23.7%, and ADR by 11.1%.

November: Occ: - 2.3%; ADR: -5.0%; RevPar: -7.2%

The same goes for November, a negative trend is expected due to the absence of a strong trade fair this year. We are talking about

last year’s Aluminum Trade Fair that attracted 1,000 exhibitors from approximately 60 nations, and 24,748 trade visitors to Düsseldorf.

December: Occ: - 8,3%; ADR: -2,6%; RevPar: -10,7%

A negative growth in all three key figures is still expected for December. The significant double-digit decline in RevPar is connected to

the development in occupancy, intensified by the reduction in average room rate. Hope for improvement lies on the tourism business

and the four Advent weekends, which are still struggling.

January 2018: Occ: -0,1%; ADR: 2,5%; RevPar: 2,4% In terms of trade fairs, there are no noteworthy changes compared to 2017’s. The annual Boot Düsseldorf (International

Boatshow) and PSI Promotional Products trade fair among others are on the plan. Consequently, only a small demand is ex-

pected in the year-on-year comparison. 11|17 Fairmas Hotel Report

in cooperation with Solutions Dot WG

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October 2017 – Pharma

industry was a growth hormoneOcc: 71.6%, ADR: 138,6€, RevPar: 99,2€

The outstanding results for the Frankfurt hotel industry are

mainly attributed to the CPhI Worldwide, the international

trade fair for the pharmaceutical industry. The CPhI is an an-

nual event, taking place in different cities across Europe. This

year it was Frankfurt. With the pharmaceutical congress and

the one-week postponed autumn holiday as the only differ-

ence from the previous year, the impressive growth rates in

ADR and RevPar once again highlight the economic importance

of fairs for a location. Unfortunately, this success would not be

repeated next year, as the next CPhI will take place in Madrid.

November: Occ: -0,7%; ADR: 4,3%; RevPar: 3,5% The November key figures remain almost unchanged compared to the last forecast, at least concerning RevPar. The occupancy

however is estimated a bit weaker, and corresponding room rates a bit higher.

December: Occ: -2,6%; ADR: -0,9%; RevPar: -3,4%

There is a consensus on the fact that December will continue to endure consistently negative growth rates for occupancy, ADR

and RevPar. The only disagreement in the industry is up to what extent the actual development would be. In other words, perhaps

there is still demand - as everyone knows, tourist plans are most often made at such short notice.

January: Occ: 2,3%; ADR: -0,4%; RevPar: 1,9%.

There are a few events in the trade fair calendar, such as Heimtextil on the 9th of January. as well as the three-day international

trade fair for paper, office supplies and stationery, Paperworld. But basically, it's too early for an assessment, as the vast business

is still tentative. 11|17 Fairmas Hotel Report

in cooperation with Solutions Dot WG

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October 2017 – The long

weekend was not enough Occ: 82,9%, ADR: 112,9€, RevPar: 93,6€

As expected, demand in Hamburg in October was negative com-

pared to the previous year. However, not everyone felt the decline in

the MICE and corporate business even with the bridge and public

holidays. With regards to Hamburg, it is worth mentioning that the

Hanseatic city on the day of German unity had consistently recorded

positive growth in its hotel key figures on the extended weekend of

27.-31.10. Above all, the growth rates around the Reformation Day

stands out in the comparison of destinations: Occ. + 5.1%, ADR +

11.7% and RevPar + 17.4%. Munich is the only other city together

with Hamburg that made it into the green zone this weekend - all

other major German destinations are disappointed with negative

growth rates.

November: Occ: -0,4%; ADR: -1,1%; RevPar: -1,6%

The hotel indexes remain almost unchanged in the weak negative area. That is actually quite positive after all as the expectation in the

occupancy in the Hotel Report from September was still at a low red with -5%. Only the average room rate improved and got a little

stronger, which was not expected two months ago.

December: Occ: -4,4%; ADR: -0,9%; RevPar: -1,6%

For December, the forecast hardly changes. The fact is the Congress of the Chaos Computer Club is missing, as this year it had to

move to Leipzig due to renovation work at the Congress Center Hamburg. In addition, the OSCE summit of last year is missing.

January: Occ: -0,5%; ADR: 4,0%; RevPar: 3,5%

NORDEC taking place in January is worth mentioning as it will contribute to the MICE business. The organizer expects 400 exhibitors

and over 12,000 trade visitors attending. A positive sign in the occupancy is still not expected, therefore does not change the plan to

raise prices.

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October 2017 – Anuga

whets the appetite for more

Occ: 75,3%, ADR: 139,7€, RevPar: 105,2€

The trade business prospered in Cologne in October because of Anuga.

Room demand was so strong in the wake of the world's largest food

trade fair that the room rate rose by almost a fifth compared to the pre-

vious year. The fact that Anuga takes place only every two years puts

into perspective the impressive level of growth year-on-year. Having said

this, the Anuga Event Check which looks at the fair's figures since 2009,

also shows double-digit growth for the 3- and 4-star hotels in occupancy

and RevPar (2017 vs 2015). However, the Cologne / Bonn hotel industry

also experienced a downer: the weekend around the Reformation Day

was disappointing (Occ -23%, ADR -31.7%, RevPar -41%).

November: Occ: -1,0%; ADR: 7,5%; RevPar: 6,5%

The UN Climate Change Conference in Bonn boosts the region’s growth in ADR. It was already established months ago that given the

Bonn room capacities were insufficient, Cologne was going to be the best alternative for the participants. Other contributors to the

positive growth include the FSB (leading trade fair for sports, games, swimming and leisure facilities) and the MEDICA in Dusseldorf.

December: Occ: 0,1%; ADR: 0,7%; RevPar: 0,8%

Expectations for December are still on the negative with occupancy of -1.8%. At this time, it is difficult to estimate the number of tour-

ists who will use the pre-Christmas period for a city trip to Cologne. Previous experiences regarding figures during Christmas market

weekends have indeed been positive. However, this source of business is decided on short notice and dependent on the weather.

Januar: Occ: 1,5%; ADR: -2,8%; RevPar: -1,4%

January keeps a relatively constant occupancy with the existence of key trade fairs in its event calendar. With the furniture and design

fair, as well as the power duo - ISM, world’s leading trade fair for sweets and snacks, in conjunction with ProSweets Cologne. Unfortu-

nately, a positive ADR could not be achieved due to the absence of Living Kitchen, a biennial event due to take place again in 2019. 11|17 Fairmas Hotel Report

in cooperation with Solutions Dot WG

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in Kooperation mit Solutions Dot WG

October 2017 – In the end,

RevPar was constant Occ: 80,2%, ADR: 140,0€, RevPar: 112,2 €

As forecasted, Munich hotels were able to offset the decline in room

occupancy with growth in the average room price. The reason for

this was the MATERIALICA, the Expo Real and the surprisingly good

Airtec. In particular, the organizers of Expo Real were pleased with

record numbers in terms of the number of exhibitors (+ 13%) and

visitors (about + 6.15% reaching over 41,000). In addition, the last

day of the Oktoberfest as well as the two bridge and public holidays

was able to support the ADR. The extended holiday weekend from

27.10 to 31.10.2017 in celebration of Reformation Day, which was

disappointing for all the other destinations, except Hamburg, Mu-

nich closed positive growth rates (Occ. + 2%, ADR + 0.8%, RevPar +

2.8%).

November: Occ: - 0,7%; ADR: -5,5%; RevPar: -6,1%

Even if Productronica drew 1,160 exhibitors and around 38,000 visitors to Munich two years ago, it is too small to replace the

Electronica that took place last year in its entirety. For example, negative signs are expected for all three key figures - with the

prospect of improvement next year, when the Electronica is once again on the trade fair schedule.

December: Occ: -1,6%; ADR: 0,9%; RevPar: -0,8%

The current forecast is much more positive than in the previous month (Occ -7.2%, ADR 1.2%, RevPar -6.0%). The reason for

this is good demand in the leisure sector - in particular, the turn of the year on a Sunday leaves many guests ticking on Friday. It

remains to be hoped that the capacity expansion will not lead to large discounts.

Januar: Occ: -6,5%; ADR: -12,7%; RevPar: -18,4%

There is not a lot of business on the books to replace the demand created by BAU, the world’s leading trade fair for architec-

ture, materials and systems. In the January 2018 calendar of events is the ISPO, the international trade fair for the sports indus-

try. Although it has been growing steadily since 2009 with more than 2,700 exhibitors and 87,000 visitors expected this 2018, it

is not a real substitute for 250,000 visitors to BAU .

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Your contact in the Fairmas Hotel Report editorial team:

Verena Bock, Marketing & Communication

Fairmas GmbH

E-Mail: hotel-report@fairmas.com

The Fairmas Hotel Report is published by

Fairmas GmbH, Sachsendamm 2, 10829 Berlin, Germany

Solutions Dot WG GmbH, Kranzer Strasse 6-7, 14199 Berlin, Germany

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11|17 Fairmas Hotel Report

in cooperation with Solutions Dot WG