Hotel Report Edition November 2014

Home , Long weekend, Trade fair

In Focus Provincial? Not in the slightest! The unnoticed destinations of Rostock-Warnemünde, Mainz, and Darmstadt

Index

Dear readers, 3

Oktober 2014 in comparison to the previous year 4

Fairmas Trendbarometer 8

In Focus 16

Disclaimer 29

Dear readers,

In this Fairmas Hotel Report, we examine the performance of German cities, on time and informatively. The figures reveal the sensitive movements of the market - good and bad times between Hamburg and Munich. But how do things look in those cities and towns beyond the major conurbations? Which factors are af- fecting booking behaviour there? Our author Gabriele Kiesling, analyst at Solutions dot WG, examined the potential of the cities of Rostock/Warnemünde, Mainz and Darmstadt. She has meticulously put together the pieces of a puzzle made up of seasonal highlights, territorial conditions and peculiarities, school holiday periods, trade fair events, concerts, and many other factors. It is a thoroughly exciting view of the first three quarters of 2014 in these three cities, as well as a clear demonstration of how benchmarking helps in really understanding the market.

A golden October? We now have the figures for October hot off the press and we look at the forecasts for November, December and January in the Trendbarometer. Forecasts are mixed. The current Fairmas analysis figures show where hoteliers are looking forward to good times, as well as where thumbs are pointing down.

The Fairmas Hotel Report team wishes you enjoyable reading, as well as a little time to breathe before the end-of-the-year rush!

(Gabriele Kiessling & Nadine Kilian)

Oktober 2014 in comparison to the previous year1

A brief overview of hotel performances at selected German destinations:

1 All the figures (daily collected) quoted are comparisons with those for the previous year, rounded to full amounts Source: Fairmas GmbH/STR Global, Data as of 06.11.2014

Berlin Dresden Occ: 82%, ADR: €94, RevPar: €77 Occ: 73%, ADR: €71, RevPar: €52 Berlin can look back on a turbulent October. De- A significant decline was expected in Dresden in mand for the long weekend starting on October 3 October. Last year, Semicon Europe took place (the German national holiday) came very late. And (7 to 10 October 2013), a trade show that provi- it almost seemed as if Berlin had overslept the IN- des Dresden with good performance figures every TERGEO Conference. Demand only picked up in two years. Its presence was missed this year. The late September but it was above average because school holidays in the second half of the month im- many events and conferences were held at the peded conference and corporate business, so that same time. Many hoteliers had not been expecting only two weeks were available solely for business this and, when the demand arose, they were un- guests, who also provided too little exhibition and able to achieve high-priced business for capacity convention business. In addition, the public holi- reasons. This problem seemed to continue throug- days on 3 and 31 October 2013 had both been on hout the whole month, because the “belektro” a Thursday, which set up excellent long weekends event (15 to 17 October 2014) and the 27th ECNP and in each case the opportunity for a day’s busi- Congress (18 to 21 October 2014) led to high de- ness at higher room rates than this year. So it is mand, although the expected ADR remained far not surprising that occupancy and room rates rose below the rates actually achieved. Tourist demand by 0.1%, resulting in a 0.3% fall in RevPar, even during the school holidays and for the Festival of though the final figures were not quite as bad as Lights was also very healthy but with low prices. All had previously been predicted. this meant that while occupancy indeed increased (+ 5%), the ADR fell by 4% (RevPar: +0.4%).

Dusseldorf 29 October 2014) assured very high demand in the Occ: 74%, ADR: €113, RevPar: €83 city. The “Hanseboot boat show”, this time from 25 Performance in October was very poor with a col- October to 2 November, and this year’s Hamburg lapse in room rates (ADR: -26%), as well as high “Summit” event, were also viewed positively by the losses (-2%) in occupancy. This year, far fewer city’s hoteliers. Overall, October revealed a trend trade fairs took place in Dusseldorf than in 2013. towards major year-on-year improvements in the For instance, the “K” trade fair( held on a three-year MICE and Business sectors. cycle) , as well as the Anuga in Cologne, which last year led to very healthy overflow trade, were Frankfurt absent this October. The “Aluminium” (7 to 10 OCC: 74%, ADR: €115, RevPar: €85 September 2014) and “Glasstec” events (21 to 24 October was far worse in terms of performance September 2014; held on a two-year cycle) that than last year. Room rates fell by 15%, which re- took place this year and representing with seven sulted in a 14% drop in RevPar. This was largely trade fair days, were unable to improve the overall due to trade fairs being held on different dates than result. The Aluminium trade fair, in particular, was before. Last year, the CPhl (a conference held at far below expectations, with a 14% fall in RevPar different venues) took place from 22 to 24 October compared to 2012. 2013. It had a particularly strong impact on room rates and occupancy, leading to unusually good Hamburg business in an otherwise meagre autumn holiday OCC: 83%, ADR: €110, RevPar: €92 week in Frankfurt. As in 2013, the Frankfurt Buch- The forecast for October was also positive, with messe (book fair) was held again this year (8 to RevPar set to increase by 5%, due to a 3% rise in 12 October 2014). However, competition is incre- ADR. The DGHO convention, which is held at rota- asing all the time due to the many new hotels that ting venues, held from 10 to 14 October 2014, and are opening in Frankfurt, and it will no longer be the Schmerzkongress, a specialist German medical possible to achieve the same room rates. The 2% conference (22 to 25 October) contributed greatly increase in occupancy in October was influenced to the improved room rates. In addition, the Con- positively by unexpected strikes and flight cancel- gress of the „European Commodities Exchange“ lations, which generated additional layover busi- from 16 to 17 attended and the two German soc- ness in some hotels. As this year‘s German Day of cer cup matches at the end of the month (28 and Unity public holiday on 3 October fell on a Friday

(in 2013 it had been on a Thursday), hoteliers in mand in the last week of October was still quite Frankfurt were able to record a quite normal busi- strong, but did little to change the overall result. ness week, marked by an occupancy increase of +14% compared to 3 October last year. Munich OCC: 88%, ADR: €149, RevPar: €131 Cologne/Bonn The Munich hoteliers were able to record a little OCC: 73%, ADR: €104, RevPar: €76 growth in October. As room rates had dropped Business in Cologne/Bonn was marked by a near- by 1%, a 3% increase occupancy led to a slight dramatic downward trend. Occupancy fell by 4% (2%) growth in RevPar. Last year, there had been year-on-year. However, this was overshadowed by one extra day of Oktoberfest in October; this time the 21% decline in room rates and there was a around there was an additional day in September. related 24% fall in RevPar. The main reason was The second Oktoberfest week was slightly wor- the absence of the ANUGA trade show, which only se than last year, particularly in the group sector. takes place every two years, though it was not held Demand was low, resulting in a noticeable drop in in 2014. No other trade event in the region can be prices. In addition, there was a lack of large mee- sold at such high prices. The “K” trade fair in Dus- tings in the city in October, an absence which me- seldorf, which otherwise provides for much over- ant that higher prices could not be achieved. The flow business in Cologne, was not held this year, InterAirport trade show, held every two years, was either. The ORGATEC (21 to 25 October 2014) and missing this time. The autumn vacation in the last INTERMOT (1 to 5 October 2014) trade fairs did week of October did nothing to boost rates in busi- nothing like enough to offset the losses. In addi- ness sector trade, but due to the holiday situation, tion, demand during the autumn school holidays the week of school holidays still meant healthy de- was significantly weaker than in recent years. De- mand.

Overview of all destinations

Hotel Performance October 2014/2013*

Occupancy in % Average Daily Rate in Euro RevPar in Euro 2014 2013 Var. Var.% 2014 2013 Var. Var.% 2014 2013 Var. Var.%

Berlin 81,9% 78,4% 3,5 4,5% 93,9 97,7 -3,8 -3,9% 76,9 76,6 0,3 0,4% Cologne/Bonn 73,2% 76,6% -3,4 -4,4% 103,8 131,3 -27,5 -20,9% 76,0 100,6 -24,6 -24,5% Dresden 72,9% 73,0% -0,1 -0,1% 71,2 71,3 -0,1 -0,1% 51,9 52,0 -0,1 -0,3% Dusseldorf 73,6% 75,3% -1,7 -2,3% 113,4 159,7 -46,3 -29,0% 83,5 120,3 -36,8 -30,6% Frankfurt 74,2% 72,8% 1,4 1,9% 114,8 135,5 -20,7 -15,3% 85,2 98,6 -13,5 -13,6% Hamburg 83,2% 81,6% 1,6 2,0% 110,1 106,9 3,2 3,0% 91,6 87,2 4,4 5,0% Munich 88,0% 85,8% 2,2 2,6% 149,2 150,7 -1,5 -1,0% 131,3 129,3 2,0 1,5%

*Source: Fairmas GmbH / STR Global, based on data from participants with daily data entry, Data as of 03.11.2014

Legend OCC Occupancy ADR Average Daily Rate (net rooms revenue) RevPar Revenue per available Room (net logistics revenue per available room)

Fairmas Trendbarometer

A peek into the future – in detail:

Berlin In recent years, November has regularly been a growth in occupancy is thought likely and room good month for business: hardly any public holi- rates are expected to grow by 3%, leading to a days and no school vacations, so that the month 7% rise in RevPar. Short-term individual pickup is offers the promise of four full business weeks. The also expected, and even greater gains can be ex- “SAP TechEd” conference (11 to 13 November pected.

December promises no ma- Fig.1: Trendbarometer Berlin 2014 – Trend versus last year jor changes compared to Last Year November last year (Occ: +0.3%, ADR: 4,4% 2,6% +0.0%, and RevPar: +0.3%). December 7,0% Berlin hoteliers are still ex- 0,3% 0,0% pecting good business sector January 0,3% trade in the first two weeks 3,1% -1,3% of the month. The number of 1,8% shopping and Christmas mar- Occ ADR RevPAR ket tourists will be around last Source: Fairmas GmbH / Data as of 05.11.2014 year‘s level. Demand for the Advent weekends has always 2014), the DGPPN Congress (26 to 29 November been high in recent years. New Year‘s Eve and 2014), as well as even more business sector and the days before are highly promising because the group travel than in recent years is boosting Berlin public holidays are very convenient for employees hoteliers’ confidence. The advance booking situ- this year; they can take the whole week off and yet ation has been very good for weeks now. A 4% only use a few days of their vacation. Nonetheless,

December this year will be a classic low-season Cologne/Bonn month with little group sector trade and business Hoteliers are cautious about the November fore- sales. casts and because the time taken for the booking procedure is becoming progressively shorter. This The beginning of 2015 promises to be positive. In is especially true in the leisure sector and increa- January, a 3% increase in occupancy is expected. singly for business sector trade, too. A 2% occup- Employee-friendly long weekends at the end of the ancy increase is expected, as well as a 2% decline year will ensure plenty of leisure business, but with in room rates. This will lead to a 3% falling-off in weaker room rates. Hoteliers have so far been cau- RevPar. Nevertheless, hoteliers are confident that tious about predicting the Green Week and Berlin the numbers will improve, because November last Fashion Week because both events were weaker year was a good month with a great deal of conference business. It is hoped that there will be some short-notice Fig.2: Trendbarometer Cologne/Bonn 2014 – Trend versus last year business sector trade, even

Last Year November though demand and bookings -1,5% are sluggish. The Advent week- -1,7% December -3,1% end and the Christmas market 2,5% can still ensure good leisure de- -0,8% January 1,7% mand. -0,8% -0,6% -1,3% Hoteliers in Cologne/Bonn Occ ADR RevPAR are cautiously positive in their Source: Fairmas GmbH / Data as of 05.11.2014 forecasts for December. They expect a 3% increase in occup- in 2014 than in previous years. Currently, it is esti- ancy combined with a 0.8% decrease in ADR and mated that the average rate will fall by 1% (RevPar: thus an increase in RevPar of around 2%. Leisure + 2%), but advance bookings are well above last business is especially popular, there is very good year’s levels. It is hoped that the lower room rates demand for the Advent weekends, the Christmas in the periods before and after the big events will market tourism is slowly picking up, as is New yet bring some extra leisure business in the city. Year‘s Eve. In Cologne/Bonn, the hoteliers are looking confidently towards the end of the year.

Cologne/Bonn expects a slow start to the New are already very promising. However, it remains to Year. January is predicted to be slightly down. Oc- be seen whether the positive forecasts (Occ: up cupancy is expected to decline by 0.8% and room by 5%, ADR plus 0.4% and RevPar up 5%) are rates by 0.6%. RevPar will thus be 1% down. This justified because bookings are, as always, made January, there was no ISM (the next one will be at short notice. held on 1 to 4 February 2015). The nights with the greatest demand are in 2015 are in February, while Still, the forecast for December is rather more cau- this year, the trade fair only took place in January tious. Occupancy is expected to fall by almost 6%, (26 to 29 January 2014). So far, bookings in the though room rates will rise by 5%, resulting in a 1% first week of January are still very poor. Many hotels are Fig.3: Trendbarometer Dresden 2014 – Trend versus last year trying to attract leisure sector Last Year guests to the city by offering November 4,8% low room rates. 0,4% December 5,2% -5,5% Dresden 4,9% January -0,9% Hoteliers in Dresden expect 10,0% a very positive November. 0,2% 10,1%

Events include the “Jazztagen” Occ ADR RevPAR jazz festival, the “Unity.Dres- Source: Fairmas GmbH / Data as of 05.11.2014 den.Night”, the CYNETART Festival, and the Striezelmarkt, which opens its gates on 27 November 2014. decline in RevPar. Since the fourth day of Advent Things are happening in the city this autumn. The is so close to Christmas, it will be hard to sell it Advent weekends before Christmas are generally to leisure sector guests. Nevertheless, the Advent well booked in Dresden, and the Striezelmarkt weekends prior to Christmas are usually times of event is extremely well attended. The figures for high demand. New Year‘s Eve is also looking good November are boosted by the fact that the first day for Dresden, as is the tradition. Hoteliers are tigh- of Advent falls on 30 November this year. Prelimi- tening the price screw, so that room rates for the nary booking levels for the first weekend of Advent Advent weekends are significantly higher than in

recent years. However, while this is perhaps so- Dusseldorf mewhat at the expense of occupancy, the average The forecast for November predicted dismal pro- rate remains positive. spects for hoteliers in Dusseldorf (Occ down 5%, ADR-5%, and RevPar-10%). There have been fe- There are very positive expectations for the start of wer inquiries for events so far. In addition, the “A+A” the New Year in Dresden. Occupancy is expected trade fair, which takes place every other year, will to increase by 10%, though room rates will virtually be absent in 2014. Last year, it was accompanied stagnate, with a tiny increase of just 0.2%. Thus, by high room rates. Furthermore, the important a RevPar increase of 10% is expected in January. annual “Medica” trade show (12 to 14 October Due to the employee-friendly timing of the school 2014), with four trade fair days, will hardly be able to counteract the overall poor performance. It also remains to Fig.4: Trendbarometer Dusseldorf 2014 – Trend versus last year be seen whether the result can be improved. In November, due Last Year November -5,3% to increasingly short-term boo- -5,3% king behaviour, it will also be December -10,4% -4,7% seen whether the results can be 3,8% January -1,0% corrected upwards. -2,0% 0,0% -2,0% There will be no trade fairs in Occ ADR RevPAR the city in December, as was

Source: Fairmas GmbH / Data as of 05.11.2014 also the case at this time last year. Dusseldorf Hoteliers expect a 5% decline in occupan- holidays at the turn of the year, and the fact that the cy, though a minor increase in ADR of around 4%, school holidays take up more of January than was and a 1% fall in RevPar. The savings by corporate the case this year, hoteliers are expecting strong clients and reduced demands in the meeting and leisure-sector business in January. In general, ho- conference sector due to more stringent compli- teliers in Dresden are cautiously optimistic about ance measures are increasingly showing their ne- the New Year. gative effects on the Dusseldorf hotel trade.

Nevertheless, the first three weeks of December rate customers are simply keeping their requests are business weeks that are easy to sell. There is as options. usually also good demand over the weekends in the run-up to Christmas, so that occupancy and Frankfurt room rates might well rise because leisure boo- As a rule, November is a good corporate and con- kings in particular are being made at very short ference month in Frankfurt. Nevertheless, hoteliers notice. are restrained in their forecasts. Occupancy is expected to rise by 0.4%, while room rates are set to So far, January also looks set to be a troubled fall by 3%. A 3% decline in year-on-year RevPar is month for hoteliers in Dusseldorf (RevPar down thus expected. Many hoteliers feel that the gene- 2%). Thus, many Düsseldorf hotels are recording ral deterioration in the convention business is the a major fall in the volume of meeting and busi- main reason for the generally negative ADR fore- ness overnights. (Occ: down 2 %). A more specific cast. Currently, individual pickup is still lacking at statement on the January forecast can be expec- many hotels. However, since the EuroMold trade ted from mid-November. An improvement in occu- fair (although not a major event) is taking place in pancy and room rates due to short-term corporate Frankfurt this year (24 to 28 November 2014), the bookings may yet be expected, as so far, the boo- hotels around the exhibition centre will be able to king situation is still very subdued and many corpo- charge higher room rates, something that could make the results seem a little more positive.

Compared to last year, fore- Fig.5: Trendbarometer Frankfurt 2014 – Trend versus last year casts for this December are very Last Year November negative indeed. Occupancy is 0,4% -3,3% expected to fall by 6% though December -2,9% room rates will rise by as much -6,3% 0,2% as 0.2%. A 6% decline RevPar January -6,2% -6,9% is thus expected. So far, preli- -1,0% -7,8% minary bookings in the leisure

Occ ADR RevPAR and events sectors are good

Source: Fairmas GmbH / Data as of 05.11.2014 but volume is still lacking in the individual segments. Last year,

“EuroMold” took place in December, trade fair that 4% increase in RevPar. The starter for November days will be missing this year. Yet even if the boo- is the 66th Eisbeinessen (“pork knuckle dinner”), kings for Christmas and New Year pick up soon, which will bring many tourists to the city over the figures could clearly still be positive, because the weekend. Generally, the Hamburg hotels confirm development of room rates not least depends on that this November’s business will be marked by individual pickup, which is currently very difficult to especially good advance bookings from the corpo- estimate. Group business is expected along with rate and conference sectors, coupled with a high the Christmas market tourism. In addition, the last demand in the transient segment (Occ: up by 2%, three weeks before Christmas are likely to be easily ADR: up 2%). sellable business weeks. December also looks likely to be extremely promi- Forecasts for January are also well below last sing. Increases in all three key indicators are ex- year’s levels, both in terms of occupancy (7% less), pected: occupancy is set to increase by 1% and and in room rates (ADR down 1%). This time, the room rates will rise by 3%, which will lead to a (4%) Christmas holidays in many federal states are up to growth in RevPar. In Hamburg too, there are three three days longer than in 2014, which will lead to a full business weeks before Christmas. Demand decline in corporate and meeting business in 2015. for the Advent weekends is high and New Year‘s In addition, the absence of “Paperworld” in Janu- Eve is very convenient for holidaymakers this year. ary means two full trade fair days less in February The hoteliers in Hamburg are looking confidently 2015. Last year the entire event fell in January. The steady growth Fig.6: Trendbarometer Hamburg 2014 – Trend versus last year in hotel openings in Frankfurt is Last Year November leading to a cut-throat competiti- 1,7% on among the hotels; this beco- 1,8% December 3,5% mes particularly noticeable in the 0,7% 3,0% winter months in the lower room January 3,7% rate levels compared to last year. -5,5% 2,5% -3,1%

Hamburg Occ ADR RevPAR

November seems set to be a po- Source: Fairmas GmbH / Data as of 05.11.2014 sitive month for Hamburg with a

towards the end of the year, although here too, se charged during the “Productronica” event. The bookings are made at short notice. first weekend of Advent 2014 falls in November, and hoteliers are expecting good leisure-sector However, the trend for January is subdued, with demand. declines in occupancy of up to 6%, leading to an overall 3% drop in RevPar, despite a positive room Forecasts for December in Munich are still cau- rate forecast (up 3%). Many trade shows, such as tious. A slight increase in occupancy of 0.3% is the Nortec fair (21 to 24 January 2014) and the expected, but a 0.1% decline in room rates is also congresses that took place in 2014, will be ab- forecast. This means that RevPar will slide by 0.2%. sent in 2015. With regard to the room rates fore- December contains three full business weeks, cast, many hoteliers are already registering a very which could represent many guests at high room good advance booking level in response to various rates, especially because the third Advent week is events, as well as a significantly growing demand a relatively long time before Christmas. There will in the MICE segment. In Janu- ary 2015, Hamburger hoteliers Fig.7: Trendbarometer Munich 2014 – Trend versus last year expect more short-term boo- Last Year November king inquiries for annual kick-off 6,4% events and tourist trips. 11,1% Dezember 18,2% 0,3% Munich -0,1% Januar 0,2% November means three full 4,3% 18,2% business weeks for Munich ho- 23,2% teliers. Forecasts are correspon- Occ ADR RevPAR dingly enthusiastic. Occupancy Source: Fairmas GmbH / Data as of 05.11.2014 is expected to rise by 6% compared to last year and room rates by as much as be no trade fairs or other major events in Decem- 11%, thus leading to an 18% RevPar boost. This ber. Individual bookings are only being made at a positive development is largely due to the “electro- late stage; it remains to be seen whether there will nica” trade fair (11 to 14 November 2014), which still be any room for improvement. is leading to a huge demand and high room rates. This year too, room rates are well above tho-

January 2015 in Munich is expected to be much better than in 2014 (Occ: +4.3%, ADR: +18.2%, RevPar: +23.2%). The main reason for this positive development is the BAU trade fair, which takes place every two years (19 to 24 January 2015). The public holiday on 6 January 2015 will have a negative effect on occupancy and room rates in the first week. However, even if one calculates for the low ADR associated with leisure sector business, this only serves to reinforce the enormous positive impact that the BAU event has on room rates and RevPar.

In Focus

Provincial? Not in the slightest! The unnoticed destinations of Rostock-Warnemünde, Mainz, and Darmstadt

The ABC of destinations

The Fairmas Hotel Report regularly highlights Germany’s most important A and B destinations. But what actually characterizes an A or B destination? If we look for classification criteria, we will encounter a variety of possible interpretations, the most important points of which are very similar or even identical. Important distinguishing features for classifying a location are, for example, its population, infrastructure, industry and trade, culture and education, administration, as well as the location’s regional, national or even international significance.

People travel from all over the world to cities such as Berlin, Hamburg or Munich; they are lured by tourist attractions just as much as by business meetings or international trade fairs. The hospitality industry is booming. We also examine some B destinations on a regular basis. There are also many other large cities that are of great importance for their respective region, the C destinations. We have systematically examined three such cities that are typical for this group and that are of both regional and national importance: Rostock-Warnemünde, Mainz, and Darmstadt. All three places possess similar parameters such as population, trade fair and convention centres; additionally, they are all university cities and transportation hubs. Here, we look at the examples of Rostock-Warnemünde, Mainz and Darmstadt.

The hotels participating use Fairmas Hotel Benchmarking to provide the basis of their data analysis.

Fairmas Gesellschaft für Marktanalysen mbH | Sachsendamm 6 | 10829 Berlin | www.fairmas.com Seite | 16 Solutions Dot WG GmbH | Kranzerstraße 6-7 | 14199 Berlin | www.solutionsdotwg.com © 2014 Fairmas GmbH/Solutions Dot WG GmbH Berlin Dusseldorf Fairmas Frankfurt (Main) Hotel Report Hamburg in cooperation with SolutionsDotWG Cologne Bochum Bonn Bremen Munich Dortmund Dresden Stuttgart Duisburg Nuremberg Hannover Karlsruhe Leipzig Mannheim Munster Essen Wiesbaden

Albstadt Aschaffenburg Aachen Augsburg Bamberg Bayreuth Bergisch Gladbach Bottrop Brandenburg Bielefeld (Havel) Bremerhaven Chemnitz Coburg Cottbus Dessau Detmold Düren Eisenach Braunschweig Flensburg Frankfurt (Oder) Friedrichshafen Fulda Fürth Gelsenkirchen Gera Gießen Görlitz Darmstadt Erfurt Erlangen Göttingen Greifswald Gütersloh Hagen Halberstadt Halle (Saale) Hamm Hanau Heilbronn Herne Hildesheim Ingolstadt Jena Kaiserslautern Kassel Freiburg (Breisgau) Heidelberg Kempten (Allgäu) Koblenz Konstanz Krefeld Landshut Leverkusen Lüdenscheid Ludwigshafen Lüneburg Marburg Kiel Lübeck Magdeburg Mainz Minden Moers Neubrandenburg Neumünster Neuss Oberhausen Offenburg Oldenburg Paderborn Passau Mönchengladbach Mülheim Pforzheim Plauen Ratingen Ravensburg Recklinghausen Remscheid Reutlingen (Ruhr) Offenbach (Main) Rosenheim Salzgitter Schweinfurt Schwerin Siegen Solingen Stralsund Suhl Trier Tübingen Ulm Villingen-Schwenningen Osnabrück Potsdam Weimar Wilhelmshaven Witten Regensburg Rostock Wolfsburg Würzburg Zwickau Saarbrücken Wuppertal

Most important centres: Population: 500,000 and more National and/or international significance Large functioning markets in all segments B Of interregional or international importance culturally Important centres: Population: 100,000 and more Large cities with a major economic and cultural significance that is mainly interregional or national C Important cities Multifunctional large cities Of regional and limited national significance Important impact on the immediate surroundings

D Important regional cities: Population: up to 100,000 Fairmas GesellschaftMultifunctional für Marktanalysen medium-sizedmbH | Sachsendamm and6 | 10829 small Berlin cities | www.fairmas.com Seite | 17 Solutions Dot WG GmbH | Kranzerstraße 6-7 | 14199 Berlin | www.solutionsdotwg.com © 2014 Fairmas GmbH/Solutionsregional focussed Dot WG GmbH cities with significance for the immediate surroundings Low market volume and revenue Sources: http://www.riwis.de/ http://www.mygeo.info & Fairmas Fairmas Hotel Report in cooperation with SolutionsDotWG

Figures, trends, and developments: the cities of Rostock-Warnemünde, Mainz, and Darmstadt

Rostock-Warnemünde

800.000 20% The city of Rostock (to- 706.075 700.000 gether with its most famous 637.088 15% 594.554 607.976 600.000 547.961 564.323 561.578 550.874 district, the seaside resort

10% 500.000 10,8% of Warnemünde), with more 7,9% 400.000 5% than 200,000 inhabitants, is 4,8% 300.000 3,0% 2,3% 0% the largest city in the state

200.000 -0,5% -1,9% -5% of Mecklenburg-Western

100.000 Pomerania, as well as a tou-

0 -10% 2006 2007 2008 2009 2010 2011 2012 2013 rist growth region. The eco- Arrivals Change (%) nomic, cultural and scientific centre in North-eastern Ger- Fig.1: Arrivals Rostock/Warnemünde (2006-2013) (Source:Statistical office Western Pomerania) many has an important Bal- tic port that handles ferry and cargo ships, and one of Germany’s largest cruise ship ports. Besides being a university and logistics site, Rostock is one thing above all: a tourism city that attracts guests from every German federal state and from abroad. In addition to the area’s natural beauty, guests appreciate above all the widespread recrea- tional facilities, water sports, shopping and culture, the family-friendly nature of the area, as well as health and spa opportunities. This is proven by the steadily growing visitor numbers: in 2013, more guests than ever visited this hanseatic city.

The number of guests grew by 11% in 2013 compared to the year before. In addition to Germans’ generally growing liking for city breaks, this also shows that the wide-ranging efforts of tourism operators and hoteliers to make the low season attractive are now bearing fruit. During this time, holiday-makers arrive who appreciate tranquillity and quiet enjoyment, as well as spa and health services. Moreover, new and/or distinctive event formats are being introduced, such as the “Warnemünde Wintervergnügen” (“Warnemün-

de Winter Fun”), Leuchtturm in Flammen (“Lighthouse in Flames”), and “Kultur trifft Genuss” (“Culture Meets Pleasure”). So is everything really OK? The downside is enormously tight cut-throat competition, with many new hotels having to compete for guests. This is the decisive cause of the development in 2014: year-to- date figures show a minimal change in September with a RevPar increase of 0.4%, marked by downhill development in relation to occupancy (Occ: down 2.4%) although ADR rose by 3%.

Let us look at 2014 at the Rostock-Warnemünde destination in more detail:

The beginning of the year Hotel & bed supply, Rostock-Warnemünde Number of No. of available was difficult in economic Change Change hotels beds terms. With demand con- 2009 108 - 10.349 - 2010 114 5,6% 14.029 35,6% stant, more beds were 2011 113 -0,9% 13.868 -1,1% 2012 109 -3,5% 13.739 -0,9% available (partly due to the 2013 110 0,9% 14.577 6,1% opening of the “a-ja” resort 2014 June 109 -0,9% 14.258 -2,2% with 233 rooms in Warne-

Fig. 2: Hotel & bed supply, Rostock-Warnemünde (2009-2014) münde in March 2013). (Source:Statistical office Western Pomerania) Due to the different timing of the Easter holidays this year (2014: 14 to 23 April; 2013: 25 March to 3 April) March also turned out to be just as problematic (Occ: down 14.4%). The turnaround came in April with a very positive overall development in RevPar of +13%, due to a sharp increase in occupancy (Occ: +5%) and room rates (ADR: +8%). The positive trend continued in May, with RevPar growing by 6%. The sunny weather of early summer was a big boost in May and made June very good all-round.

The overall performance deteriorated slightly in July, the first month of the school holidays (RevPar: down 1%) despite the positive room rates (ADR: up 2%). Less leisure business could be generated (Occ: - 3%), due to the shift of the summer holidays (they began in mid-July in Mecklenburg-Western Pomerania; in 2013 the school summer holidays took up all of July). The improvement in ADR was largely due to a stricter price policy in some hotels. In addition, some hotels were able to register a stronger conference business, while other events, such as the “N-JOY”, and “The Beach und Stars@ndr2” on 25 and 26 July were particularly in demand. Rostock-Warnemünde recorded a slight increase in leisure sector business due to the

shift in the school summer holidays in Mecklenburg-Western Pomerania to mid-August and to the stable summer weather on the coast this August (Occ: up 0.1%). The “Hanse Sail Rostock” and the “DFB Beach Soccer Cup” were especially responsible for boosting room rates (ADR: up 5.4%). Taken together, this led to a 6% increase in RevPar. And September? The terms of overall performance, the coastal resort showed a 3% year-on-year improvement in RevPar. However, ADR and occupancy developed very differently to last year (Occ: down 3%, ADR: up 6%). While hoteliers on the coast were able to achieve stable room rates due to the longer school summer holiday in many states until the first week of September (especially in Lower Saxony), the good weather conditions, and the Warnemünde market, their colleagues in the city of Rostock itself complained of a decline in company and corporate business.

13%

8% 6% 5% 6% 6% 5% 6% 3% 3% 2% 3% 3% 1% 2% 0,1% 0,3% 0,1% 0,4%

-2% -1% -3% -3% -3% -3% -2% -5%

-10%

-14%

-23% January February March April May June July August September YTD September

Occ ADR RevPar

Fig. 3: Performance changes in 2014 Rostock-Warnemünde compared to the same month last year (Source: Fairmas)

Conclusion and outlook:

The new hotels that have opened since 2013 (the aja-Resort in Warnemünde, as well as the Hotel Sports- forum, the Markgrafenheide beach resort and the Motel One – the last three all in Rostock itself) accoun- ted for a total of 640 new rooms. This ensured even greater more cut-throat competition, with a negative impact on the corporate segment in particular. The question of how the autumn-winter season will shape up remains an exciting one. In principle, the assessment for the next five months remains subdued due to the upcoming low season with short-term pick-up business for the Christmas season in November and December.

Mainz

600.000 569.940 30, 0% 549.381 Mainz is the capital of Rhi- 530.394

25, 0% 487.205 500.000 460.331 neland-Palatinate and, with

447.707 448.145 20, 0% 430.849 more than 200,000 inha- 400.000 15, 0%

13,1% 10, 0% bitants, it is also that fede-

300.000 8,9% 5,0% ral state’s largest city. This

200.000 2,7% 3,6% 3,7% 0,0% 0,1% university town with a his-

-5,0%

100.000

-6,4% -10, 0% tory going back more than

0 -15, 0% 2000 years is headquarters 2006 2007 2008 2009 2010 2011 2012 2013 to a number of television Arrivals Change (%) and radio stations and sees Fig.4: Arrivals Mainz (2006-2013) itself as a stronghold of the Source: Statistical office of Rhineland-Palatinate Rhineland Carnival. In 2013, the city where printer Johan- nes Gutenberg was born set a record with almost 570,000 arrivals. The YTD figures until September show the stability of this development, with a RevPar plus of 6%, due to a very high (6%) increase in occupancy. Mainz is also benefitting from a strong trade fair year, because many more trade shows, congresses and events take place here in the even numbered years than in the odd, relatively poorer trade fair years. Also worth mentioning are the city’s plans and activities to profile and promote the attractiveness of the destination under the umbrella of “mainzplus Citymarketing GmbH” in a partnership of government, university, hoteliers and other tourism managers. These numbers provide more than a hint that it has been successful.

This is what we will see in Mainz as a destination in 2014:

The deterioration of the overall performance by 8% in January was due to a similar sharp drop (8%) in occupancy. While a number of carnival events attracted guests in January 2013, this year they were held a month later. February benefited from this, as well as from the first-ever annual kick-off event of a large insurance company with 700 guests (approx. 450 overnight stays). This meant a 9% rise in ADR and a similar 9% growth

Hotel & bed supply, Mainz in RevPar. The upward Number of No. of available trend continued throug- Change Change hotels beds hout March with a 16% 2007 39 - 4.948 - increase in occupancy. The 2008 39 0,0% 4.933 -0,3% 2009 42 7,7% 4.671 -5,3% causes were - as so often 2010 41 -2,4% 4.999 7,0% 2011 43 4,9% 5.211 4,2% - a series of large confe- 2012 41 -4,7% 5.200 -0,2% rences and events: from 2013 43 4,9% 5.493 5,6% 2014 April 43 0,0% 5.205 -5,2% 14 to 16 March there was a medical congress, which Fig.5: Hotel & bed supply, Mainz (2006-2013) (Source: Statistical Office of Rhineland-Palatinate) takes place on a two-year cycle with 800 participants, estimated overnights: 2300; from 24 to 28 March the spring meeting of the Deutsche Physikalische Gesell- schaft at the University of Mainz, with 1400 participants, estimated overnight stays: 5000 (a similar event last took place in 2012). The good March figures could not be maintained in April and there were poorer results in all performance areas: Occ: -6%, ADR: -2.2%, and RevPar: -8%. This was mainly due to the Easter holidays, which allowed far less corporate business. That which April lacked was a benefit to May: a huge (29%) increase RevPar thanks to a growth of 22% in occupancy and a 5% improvement in room rates. Three heavyweight congresses contributed to this fantastic result: the CIMT medical congress was held from 6 to 8 May (900 participants, estimated overnight stays: 2500); the “JAX” IT congress took place from 12 to 16 May (1000 attendees, estimated overnights: 4000); while the annual general meeting of the Museumsbund (Museums Association) was held from 4 to 7 May, attracting 450 participants, and an estimated 1300 overnight stays).

June was mixed. RevPar was down by 4%, mainly due to the fall in room rates (ADR down 5%). June 2013 had been a strong month for corporate business. In 2014, the two public holidays (Whit Monday and Corpus Christi) had a negative effect on two full business weeks. Besides this, the “Techtextil” event in Frankfurt (held every two years) had ensured healthy overflow business in Mainz in 2013. In July, the overall performance (RevPar: up 13%) improved, mainly due to the good occupancy figures (Occ: up 13%). This was due to both the flourishing conference business and the later start of the school holidays in Rhineland- Palatinate (at the end of July). Another factor was the “Summer in the City” music festival, with artists such as Elton John, Neil Young, and Unheilig. These open-air events attracted nearly 55,000 visitors and led to

many extra overnights. August was also positive: the total market grew (RevPar: up by 2%), mainly due to a rise of more than 5% in occupancy. A major international medical conference (the 47th International Congress of Pathology with more than 3500 overnight stays) ensured good figures, as did a corporate event with an additional 1500 overnights. A number of major events such as “Summer in the City”, “Rhein in Flammen” (“Rhine in Flames”) and the Sunday TV show “ZDF-Fernsehgarten” clearly boosted demand. The “James Rizzi exhibition (the New York Atelier)” from 18 July to 14 September carried on seamlessly where the last exhibition left off in the summer of 2008, attracting more than 30,000 guests and ensuring further overnight stays in Mainz.

The Mainz Wine Market succeeded in attracting a record 380,000 visitors. The later start of the school summer holidays (2013: 8 July to 18 August; 2014: 28 July to 7 September) resulted in lower room rates in August with fewer corporate sector bookings (ADR: down 3.3%). Growth in Mainz continued in September (RevPar: up 9%). Numerous events and congresses (the Veterinary Medical Congress with 600 participants, estimated overnight stays: 1600; the German Nature Conservation Congress with 450 participants, estimated overnights: 2000; the Meeting of the Society of German Natural Scientists and Physicians, 700 participants, estimated nights: 1800; the EMC Forum, with 600 participants, estimated overnights: 600; the International Electrochemistry Conference, 450 participants, estimated overnights: 1200) took place in Mainz and provided better occupancy results (Occ: up 6%) and improved room rates (ADR: +3.3%).

29%

22%

16% 13% 13% 9% 9% 9% 7% 5% 5% 6% 6% 6% 3% 1% 2%

-0,1% -0,5% -0,1% -0,1% -2% -4% -3% -6% -5% -8% -8% -8% -8%

January February March April May June July August September YTD September

Occ ADR RevPar

Fig.6: Performance changes in 2014 Mainz compared to the same month last year (Source: Fairmas)

Conclusion and outlook:

The performance in the printing and media city impressed all round. The figures show well-founded and solid progress. Such developments do not happen by chance. In Mainz, they have mainly been due to the combined activities of all the major tourism service providers, in close cooperation with the mainzplus CITYMARKETING GmbH company. This invigorates both the conference and congress destination, as well as the cultural and leisure activities. In the view of many insiders, 2014 has been a particularly strong year for hoteliers in Mainz.

The increase in the number of beds appears moderate and well-planned. Discussions are taking place in the city about a new four-star hotel next to the palace. A feasibility study is being prepared, and it is due to be completed by the spring of 2015.

Darmstadt:

330.000 310.833 317.459 50, 0% Darmstadt in South Hes- 290.086 295.531

280.000 264.701 269.733 40, 0% se, with a population of

226.164 230.000 216.189 30, 0% around 150,000, has been allowed to call itself a “Wis-

180.000 20, 0% 22,4% senschaftsstadt” (“Science

130.000 10, 0%

7,5% City”) since 1997. Here,

80. 000 5,2% 0,0% 1,9% 1,9% 2,1% a technical university, two

30. 000 -4,4% -10,0% polytechnics with appro- -20.000 2006 2007 2008 2009 2010 2011 2012 2013 -20,0% ximately 41,000 students, Arrivals Change (%) as well as over 30 other re- Fig.7: Arrivals Darmstadt (2006-2013) search facilities and institu- Source: Statistical Office of Hesse

tions are actively researching and working. They include such renowned bodies as the European Space Agency’s European Space Operations Centre (ESA/ESOC) and the European Organisation for the Exploi- tation of Meteorological Satellites (EUMETSAT). This affinity with education also determines the congresses that take place. The year-to-date figures show an excellent overall performance for Darmstadt up to the month of September.

2014 at destination Darmstadt:

Hotel & bed supply, Darmstadt Experience shows that Number of No. of available January is a bad month in Change Change hotels beds Darmstadt (with RevPar 2006 - - 3.349 - 2007 - - 3.335 -0,4% decline of 5%), mainly due 2008 - - 4.120 23,5% to negative development 2009 40 - 4.048 -1,7% 2010 41 2,5% 4.302 6,3% in terms of occupancy 2011 41 0,0% 4.250 -1,2% (Occ down 9%). This time, 2012 43 4,9% 4.281 0,7% 2013 42 -2,3% 4.374 2,2% all the hoteliers complai- 2014 May 41 -2,4% 4.478 2,4% ned about the start to the Fig.8: Hotel & bed supply Darmstadt (2006-2014) year because not even the Source: Statistical Office of Hesse Heimtex home-textile fair in Frankfurt provided any respite, and the month only picked up speed very slowly due to the long school Christmas holidays that carried on until 11 January. February made up for the poor start to the year with extremely positive overall figures and a 16% increase. The later-than-usual Carnival at the end of February and beginning of March boosted corporate bookings. The “Ambiente” trade fair in Frankfurt and the “Dt. SQL Server” IT conference at the Darmstadtium were also important. March was excellent with a further 19% increase in RevPar, which could be attributed to an extremely high (26%) surge in occupancy. Due to the different timing of the Easter and the Easter school holidays this year, it was a full business month (except for the first three days of Carnival). The city’s hoteliers consistently reported hotels being booked out from Monday until Friday almost every week. April lacked the factors that had benefited the month of March (Occ: down 14%). The later Easter holidays also left their mark. Unlike the same month last year, May profited from the fortunate calendar. The month was marked by a tremendous figures (Occ: +30%,

ADR: +4%), as there was hardly a room to be booked in Frankfurt, either. The “Microsoft Synopsis 2014” and “XXIV Quark Matter Conference” were held in the Darmstadtium. During the first half of the year, May was by far the best month in Darmstadt and surrounding areas. The public holidays and the late start of the school summer vacations had a negative effect on June, a month in which corporate business levels were much lower than in 2013 (Occ: -8%, ADR: -10%, and RevPar: -18%). July was marked by a very strong improvement in overall performance (RevPar: + 41%). The late start of the school summer holidays in Hesse at the end of July ensured a full business month with plenty of corporate and meeting sector trade (Occ: +33%) and ADR (+6%). In August, Darmstadt’s performance shone at all levels: Occ: +45%, ADR: +1.3% and RevPar: +47.2%. The two-week-long International Summer School Courses for New Music, run by the Darmstadt Institute of Music were responsible for these excellent results. In September, the positive trend continued with is a 7% increase, mainly due to the 5% year-on-year growth in occupancy. The IAA trade fair in Frankfurt had far less impact on Darmstadt than this year‘s “Automechanika” event. During these strong top-ranking trade fairs, many visitors take advantage of Darmstadt’s closeness and first-rate transport con- nections to avoid paying Frankfurt’s high room rates.

45% 47% 41% 35% 33% 30% 26% 19% 16% 14% 11% 10% 7% 4% 4% 6% 5% 2% 1% 1%

-1% -1% -5% -5% -9% -8%-10% -14% -14% -18%

January February March April May June July August September YTD September

Occ ADR RevPar

Fig.9: : Performance changes in 2014 Darmstadt compared to the same month last year (Source: fairmas)

Conclusion and outlook:

One exciting development – hoteliers had prepared themselves mentally for an economically weak year, because a commercial giant (Procter & Gamble/Wella) had left the city and while some large conferences and events (e.g. Deutsche Post and Deutsche Telekom) had been cancelled. The actual figures do permit some restrained optimism, even if the global player left a large gap that no other company is currently filling. The Darmstadium is a big plus for the exhibition, conference and events scene. Maybe the city also neds a five-star hotel? Opinions differ on this point. The outlook towards a solid location policy is unanimous: no further hotel openings are planned in the near future.

The Fairmas Hotel Report is published by:

Fairmas Gesellschaft für Marktanalysen mbH, Sachsendamm 6, 10829 Berlin, Deutschland Solutions Dot WG GmbH, Kranzer Strasse 6-7, 14199 Berlin, Deutschland

Fairmas Gesellschaft für Marktanalysen mbH specializes in market analyses and the development of planning and controlling software for the hotel industry. The company offers its international clientele a hotel benchmarking platform, as well as various software applications for the fields of budgeting, forecasting, controlling, management re- porting and work process optimization.

As a strategic management consultancy, Solutions Dot WG develops individual and customized strategies and solutions for companies in the hotel, catering and tourism, and provides support in implementing plans. Solutions dot also manages independent project implementa- tion, is active in support management and interim management, as well as in the total quality management (TQM) sector.

The Fairmas Hotel Report is edited by:

Nadine Kilian, Marketing & Communications Manager, Fairmas Gesellschaft für Marktanalysen mbH, e-mail: [email protected]

Gabriele Kiessling, Consultant und Project Management, Solutions Dot WG GmbH, e-mail: [email protected]

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