Munich hotel market demand, performance rebounds in April 2018

Austrian hotel group Vienna House has launched its newest brand, Vienna House R.evo.
Munich, Germany. Photo credit: Alejandro/Flickr

A recent STR report for Munich's hotel market showed that the German city experienced significant demand and performance growth in April 2018. 

Both supply and demand in the city jumped 5.0 percent and 7.1 percent, respectively, since the same period last year. In response, occupancy rose 2.0 percent to 73.1 percent while ADR surged 12.9 percent to €119.50. The city scored a 15.1-percent increase year-on-year to €87.30 in RevPAR by the end of the April. 

This marked the first ADR and RevPAR increases for any month in Munich since December 2017. STR analysts attribute the heightened performance mainly to the favorable side of the Easter calendar shift from April in 2017 to March in 2018. Analytica and ceramitec, which both occurred between April 10 and 13, also drove the performance boost. Munich's performance in April tends to fluctuate in the market due to off years for the bauma trade fair.  

The rise in performance follows a slow February for Munich, which saw a 36.4-percent drop in profit per room. HotStats attributed the decline to a drop in demand from the conference sector, especially at the Munich Security Conference. The event, which had more than 680 participants in February 2017, recorded decreased participant numbers this year, negatively impacting local hotels. In response, occupancy dropped 64.7 percent while achieved average room rate fell 2.6 percent, causing an 18.8-percent decrease in RevPAR for February.   

Despite these setbacks, Munich was able to rebound with an expanding hotel supply to prolong its performance growth in 2018. The city's pipeline for the rest of the year includes a new property from Wyndham Hotel Group. Hyatt will also introduce its Andaz brand in Germany with the Andaz Munich Schwabinger Tor, which is opening in November 2018. As the third Andaz hotel in Europe, the property will be in the center of Munich's Schwabinger Tor cultural district.