|Paris, 06 July 2006
During match days, hoteliers in host cities are posting double rates and
fully booked hotels
Berlin and Frankfurt could be the biggest winners in direct extra revenue
Since 9 June the Football World Cup has been in full swing across Germany.
Last year’s highly optimistic forecasts for the hotel industry fuelled
hoteliers’ hopes for extra revenue. With many FIFA-blocked rooms being
reopened, many faced the Cup with damped expectations. The direct effects
of the Cup are, as a matter of course, largely being shared between the
twelve host cities. Time for a closer look.
Hope prevails for the deferment of business travel activity and a positive
lasting effect for German tourism
The capital’s hoteliers were hit hard by the reopening of 5,000 of
8,000 blocked rooms by FIFA and two weeks after kick off, hotel rooms were
still available for last-minute reservations at considerably low prices.
Despite the progressive rise in supply, hotel occupancy in the German capital
is finally increasing. In May, the occupancy rate had increased by approximately
ten points, reaching 82% at an ADR that rose by 3.9% to 94.5 euros. Furthermore,
many favourably located hotels were fully booked for two or three days
around matches, occasionally at over 200% of the normal rate. 700,000 additional
guests are expected in the capital and hosting the final stages of the
Cup will surely boost RevPAR.
In Frankfurt, home to Germany’s most important and largest international
airport, its central location in the heart of the country, popular matches
and some of the biggest fairs during the World Cup combine to make the
city a potential winner. In addition to brilliant results on match days
with RevPAR gains of over 250%, several hotels of all categories reported
an exceptional increase in rates alongside a double-figure rise in occupancy
for most of the period of the Cup.
With Munich boasting excellent results for May 2006 (RevPAR of 80 euros)
and in comparison with excellent results in June 2005, there is not a great
deal of room for improvement. At a moderately elevated price level, already
one of the highest in Germany, increases in occupancy appear to be
limited to match days and hotels in the heart of the city, where hoteliers
expect an OR in the region of 85%.
Charming Hamburg is one of the few cities that reports noteworthy last-minute
bookings and walk ins of individual clients as well as small groups since
the beginning of the World Cup. With a rising ADR and an OR that might
even surpass 85% in June, last year’s results could be considerably surpassed.
Dortmund, Cologne, Gelsenkirchen
Ideally located between three cities that play host to sixteen matches,
it is Düsseldorf, with its well established infrastructures and busy
airport, that is set to be one of the greatest beneficiaries of the Cup.
The city also boasted a fair that has the potential to even out the days
with no matches. Rates in Düsseldorf were lower than in most host
cities, which were rewarded plenty of pre-bookings. Cologne appears to
be faring well too with RevPAR gains of over 200% on match days. In Dortmund
huge World Cup camps with up to 3,000 sleeping berths offered at rates
of less than thirty euros appear to be hindering the business of established
In Stuttgart, one of Germany’s favourite business and convention venues,
the usual business clientele appears to have deserted the city. Nevertheless,
with well booked hotels in the city centre and elevated rates of up to
250% on match days.
Concerning the overall effect of the World Cup on the industry, the
excellent revenue gains of over 200% on match days in host cities, will
at the end surely boost the country’s global RevPAR for June and July.
With Germany’s excellent infrastructures and airlines serving both major
European airports and German cities with increased capacity and frequency,
spectators may return home or to their base soon after a match. Therefore
long-term stays are rare and centrally located cities like Frankfurt or
Düsseldorf are benefiting more.
The good weather and atmosphere are drawing spontaneous visitors from
neighbouring countries. These largely young spectators stay in budget hotels
but also hostels and campsites.
With the almost complete absence of conferences and trade fairs, the
Cup is clearly having a negative impact on the business segment, which
traditionally takes the lion’s share of revenue in German cities.
Although two cities were set to gain the biggest share of direct revenue
- Munich, headquarters of the international press, and Berlin, which hosts
the final stages - it is still unclear who will take home the trophy. For
Germany as a whole, it is also too soon to project revenue gains accurately.
Prevailing in the industry is much hope for positive mid- and long-term
effects of the pervasive positive image of Germany as a tourist destination
as well as a significant deferment of business travel activity into the
second half of the year and 2007.
MKG is the recognised leader in consulting services for
the hotel, tourism and restaurant industry and has the largest hotel performance
database in the world outside the United States (www.hotelcompset.com).
In Germany, MKG boasts the largest hotel database with close to 800 participating
hotels, covering all hotel segments and key markets. 9 of the leading 10
and 17 of the leading 20 chains participate in hotelcompset.
The MKG Consulting benchmarking tool enables participating
hotels and groups to compare their performances to those of their market
or direct competitors.
Since September 2004, MKG Consulting has proposed an enhanced
program that enables activity indicators to be monitored on a daily basis.
In France this program counts 1,500 hotels and 125,000 rooms, making it
the most developed daily performance tracking program in Europe. Further
expansion of the daily program to other major countries like Germany is