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German Hotel market: Recovery delayed, short-time work subsidy and owners keeping operators afloat

The situation for operators remains tense in the 4th quarter of 2020 due to the COVID-19 pandemic and its effects on the German hotel market. This is the conclusion of the “Operator Beat” report by international real estate consultancy firm Cushman & Wakefield (C&W). 

The situation for operators remains tense in the 4th quarter of 2020 due to the COVID-19 pandemic and its effects on the German hotel market. This is the conclusion of the “Operator Beat” report by international real estate consultancy firm Cushman & Wakefield (C&W). The report also provides insight into dissatisfaction with government aid programs, a prognosis for the recovery of the German hotel market and an overview of the most popular hotel locations in Germany.

76 percent of the surveyed operators are of the opinion that the German hotel market will recover more quickly than those in the rest of Europe. This prognosis is also reflected in their expansion efforts, with 89 percent of the operators continuing to expand in Germany. For the majority, risk minimization is also a major focus. In addition, 76 percent said they had a strong or stronger interest in tourist destinations. For around a third of the operators, expansion intentions for these destinations have intensified compared to the pre-crisis period. 


> Watch the video:

Hotel Operator Beat Q4


Dissatisfaction with government aid programmes, slower recovery in the German hotel market
54 percent of the operators were disappointed or very disappointed with the German government’s aid programs. Only eleven percent were satisfied. Short-time working subsidies and agreements with owners helped operators the most during the pandemic. In contrast, bridging assistance, tax relief, and stabilisation funds/KFW bank refinancing fared worse.

The forecast for the recovery of the German hotel market paints a cautious picture. According to the report, 54 percent of operators do not expect an improvement until 2023/2024. In the last “Operator Beat” in the 2nd quarter of 2020, the majority still assumed it would take place in 2022/2023. The conclusion of Stefan Giesemann, Head of Hospitality Germany & Austria at C&W: “The situation for operators remains tense. In addition to the state subsidies, some operators have meanwhile brought capital partners on board or are in a refinancing process. The first weeks of the new year in particular will set the trend for the extent to which there will be further takeovers and / or sales, which we have recently increasingly observed.”

B locations with a strong focus on tourism profiting during the crisis
In addition to the top locations of Hamburg, Munich, Berlin and Cologne, B locations with a strong focus on tourism are gaining in significance. These include the cities of Bremen, Rostock, Freiburg and Münster Despite the pessimism regarding the speed of improvement in the market, almost all German destinations gained in attractiveness for the operators in the fourth quarter of 2020. “This – notwithstanding the still prevalent scepticism - generally improved operator interest” says Giesemann, can be ascribed to the successful development of a vaccine.


> Download Operator Beat here


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