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The biggest losers in the Corona year 2020 were the hotels.

The number of overnight stays across Germany fell by 40 percent last year.

And yet it is enough for ninth place in comparison with 28 other European countries.

In Austria and Switzerland, too, the accommodation providers got through the crisis relatively well.

Liechtenstein does best with a 32 percent decline in the number of overnight stays, ahead of Norway and the Netherlands (both minus 33 percent).

The figures come from the Hotel Market Report Germany 2021 by Engel & Völkers Hotel Consulting, which WELT has received in advance.

In contrast, southern European destinations such as Spain and Greece are particularly hard hit.

“Overall, there is a clear north-south divide in the number of overnight stays and the resilience of the hotel property markets in Europe.

This also reflects the national course of the corona pandemic, ”says Andreas Ewald, Managing Partner of the Engel & Völkers subsidiary.

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Compared to the previous year, the number of overnight stays in Germany fell to around 300 million.

However, the city hotels had to shoulder significantly higher losses: the decrease was 57 percent compared to minus 16 percent for the holiday hotels.

Because they were able to particularly benefit from the travel restrictions of last year because Germans went on vacation in their own country.

“We had a great season from mid-May to October.

Then came the second lockdown, and honestly nobody expected that it would be so hard and long, ”says Jens Sroka, managing director of Heimathafen Hotels from Sankt-Peter-Ording, which includes six hotels on the North and Baltic Seas.

Everywhere in the top holiday regions of the Baltic Sea, Allgäu, North Sea, Western Pomerania and the Bavarian Forest, the number of overnight stays in summer 2020 was above the previous year.

“Many guests have decided to take a vacation in Germany and have thus ensured full occupancy in the holiday destinations.

Source: WORLD infographic

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This development shows us how quickly the number of overnight stays can recover if the framework conditions are right, ”says Ewald.

However, neither Ewald nor hotelier Sroka know whether this is sustainable.

He says: “In 2020 we had a 25 percent share of guests who otherwise did not travel inland and were therefore on the German coast for the first time.

Here we have a good opportunity to generate new regular customers. "

A location analysis by Engel & Völkers Hotel Consulting on the recovery potential of the various hotel markets showed that destinations with a strong dependency on international travel flows, trade fairs and major events are likely to have a more difficult recovery phase.

And the future market recovery depends on how sustainable the hotel market structure was before the crisis.

The prospects for the hotels in the seven largest metropolises in Germany are therefore mixed.

As an international metropolis, Berlin is also largely dependent on international guests, but the city can also boast improved connections with the new airport.

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Munich should benefit from the above-average economic power at the end of the pandemic, but the leisure tourism value should also support the market recovery - when the next Oktoberfest can take place.

Frankfurt depends on business travelers

In Hamburg, the high recreational value and the high proportion of national guests are likely to promote a rapid market recovery, according to the analysis.

The Hanseatic city acts as a stopover for many holidaymakers in the Baltic and North Sea.

In Frankfurt, on the other hand, the future success of tourism will depend on national and international business travelers.

Particular attention is paid to the trade fair and congress segment.

The banking metropolis is particularly dependent on a rapid economic recovery and a return to personal exchange.

According to the report, Cologne, on the other hand, has the most sustainable hotel market among the top 7 city destinations in Germany.

The reason for this is a healthy demand-supply ratio - which, however, can also be due to an appropriately low supply.

The recovery perspective is also good.

The hotel market in Düsseldorf has adapted to the high volatility of demand in the trade fair business in recent years.

According to the analysis, the dependency on major events as well as the continuously increasing range of hotels are likely to pose a challenge to the rapid recovery of the hotel industry in the North Rhine-Westphalian state capital.

Source: WORLD infographic

And Stuttgart can fall back on many national guests.

But as one of the leading business locations in Germany with an above-average share of trade fair tourism, the hotel market will depend in particular on the overall economic recovery, according to the restriction.

The number of overnight stays is one side - the investment in hotel real estate is the other.

In 2020, the total hotel transaction volume in Germany was around two billion euros, around 60 percent less than in the same period of the previous year, according to Ewald.

If you take out the first quarter, which has hardly been affected by the pandemic, hotel properties worth around 700 million euros would have changed hands since the first lockdown.

And there are bargain hunters on the way - Ewald calls them “opportunistic buyers”.

Shoppers on the hunt for bargains

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“In 2021, a cautious investment market can still be expected.

There are still major differences in the price expectations of opportunistic buyers and hotel owners.

In addition, banks are currently often reluctant to provide financing, ”says the hotel expert.

"Operators and concepts are facing a structural change, owners have to adjust to a new distribution of risk in the medium term."

According to Ewald, hotel property owners in Germany have enjoyed secure income in recent years, also due to the fixed lease agreements that are widespread in this country.

However, more variable payment flows can be assumed in the medium term.

“The owners have to play a new, more active role.

And it remains to be seen at what point in the market recovery the financing bottleneck will ease again. ”This bottleneck is currently inhibiting activities on the transaction market, the development or continuation of hotel projects that have already been initiated, or the refinancing of objects that are in operation.

While many investors avoid hotels like the plague, others rely on opportunities - for hotel funds for example: “We see that on the one hand there is still little product on the market, on the other hand there is great uncertainty about the price.

I expect movement here in the next six months, as the pressure on operators, portfolio holders and banks will continue to increase ”, says Ascan Kókai, who has been developing the hotel asset class at the Hamburg fund house ECE Real Estate Partners, which specializes in retail space, since October.

Recovery period of up to four years

The hotel fund strategy should be "implemented anti-cyclically" in order to offer investors a platform with which they could participate beyond the current upheavals.

"The recovery phase of the hotel market is assumed by market observers to be up to four years," says Kókai.

This means that the investment phase of his fund falls entirely within this period.

“Germany has proven to be more resilient than other European countries.

We will continue to expand here and also develop new segments, ”says Yoram Biton, Managing Director of Leonardo Hotels Central Europe, which belongs to the Israeli Fattal Group.

With 59 hotels in the group, Germany has a share of around 65 percent.

“We will continue to expand here and also develop new segments,” says Biton.

Tourism goes away empty-handed - no opening perspectives for hotels

After the federal-state summit, there are still no prospects for tourism.

Hotel operators also want predictability, but they don't get it.

Diedersdorf Castle in Brandenburg is also affected.

Source: WORLD / Alina Quast

Whether that works, of course, also depends on the further development of the pandemic.

"Financially, the lockdown was and is a great challenge," says hotelier Sroka.

"So far, apart from the short-time work allowance, we have not seen any payments from the November and December aid, let alone the bridging allowance III."

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