REGIONAL REPORT
CHANC
GERMANY CONTINUES TO SHOW DEVELOPMENT POTENTIAL EVEN AS REVPAR FLATTENS .
SECONDARY
Stories CONTRIBUTED BY DEVINA DIVECHA
Rising construction costs and the rapid growth of supply are some of the challenges facing hotel developers in Germany , but opportunities in second- and third-tier cities still offer potential for growth .
Approximately 40,000 rooms are scheduled to open in top German cities , representing an increase of 20 % over existing supply . Kathrin Jung , director and head of hotel investment properties Germany for CBRE , says Hamburg is likely to see the highest growth , with 7,600 new rooms under construction or in the planning phase , by 2023 . The largest increase in comparison to existing supply is Dusseldorf , at 44 %.
With top-tier cities moving toward saturation , hoteliers and developers are looking to newer horizons , with executives interviewed for this story pointing out solid growth potential in B , C — or even D — cities . Even though cities like Berlin , Munich , Frankfurt and Stuttgart are always on the wish list , the market reality of increasing real estate prices makes secondary cities more relevant . Deutsche Hospitality Executive Vice President and Chief Development Officer Claus-Dieter Jandel adds that interest is also seen in mid-market segments . “ Our development strategy has always taken potential changes in economic trends into consideration ,” Jandel says . “ In times of uncertain economic development , I believe that
32 hotelsmag . com March 2020