First-class hotel market in Europe: Frankfurt am Main - The banking and trade fair metropolis
Frankfurt am Main among Europe's top hotel markets
- Frankfurt has the largest rate of hotel rooms and beds to the number of inhabitants
- One of the strongest european hotel markets
- Predicted rising room rates
FRANKFURT AM MAIN: A DESTINATION FOR BUSINESS TRAVELLERS
Frankfurt am Main is one of the most economically significant cities in Germany. It’s the centre of finance and the services industry as well as a travel destination. With its international airport, Frankfurt is also one of the most important logistics locations in Europe. Every day hundreds of airplanes from all over the world land at the Frankfurt Airport. They fly for world-renowned airlines as well as for low-cost carriers such as Ryanair. In addition, Frankfurt is well connected to the motorway network and has an ICE train station. This excellent accessibility and the immense economic power make a great contribution to Frankfurt's hotel market being one of the top markets in Europe. National and international business travelers make up a large number of guest and usually stay for one to four days. For this reason, the highest number of bookings are on weekdays and outside holiday periods. Interesting trade fairs such as the IAA also add to Frankfurt’s attractiveness for international travellers. In total, the city of Frankfurt recorded a remarkable 8,806,738 overnight stays in 2016. With such a high demand, it is not surprising that room rates will rise even further according to predictions of the accredited PricewaterhouseCoopers Study 2017/2018.
HOTEL MARKET FRANKFURT AM MAIN: GROWTH IN ACCOMMODATION DEMAND
NOTICEABLE GROWTH: IAA FAIR AND BOOK FAIR
Frankfurt am Main is not only a banking and service city, but also a important trade fair location. 2017 is already described as a very good trade fair year, even though it is not even over yet. If current figures are used: The local trade fair company will generate a total turnover of more than € 650 million in 2017 with 31 fairs taking place. A further increase in sales is to be expected as the fair is being expanded. What is also noteworthy in this context is that managers of hotel real estate have seen an overall increase of 4.5% in revenue per available room. Experts predict that this indicator will increase even more. Brexit – the exit of the United Kingdom from the European Union - could provide additional positive impulses for the Frankfurt hotel market developments as Frankfurt become the new EU hub for banking and finance.
THE HOTEL MARKET OF FRANKFURT SPARKS THE INVESTOR'S INTEREST
Frankfurt’s hotel real estate market is an attractive investment class. In 2016 the recorded hotel capacity was 46,400 beds in 249 hotels. This is an increase of 1,000 beds compared to the previous year. The rate of room occupancy is even more convincing: In 2017 the occupancy rate was 68.8 %, which is a plus of 0.7 % compared to 2016. Frankfurt am Main is among the top ranking European cities right after Berlin, Amsterdam and Prague as well as selected cities in the UK and Ireland. Due to the excellent performance of the hotel market, existing investment opportunity and Germany’s economic power, the hotel investment market has become more of a focus point. According to the CBRE, the hotel investment market achieved a total transaction volume of € 5.16 billion in 2016 including both portfolio and individual investments. This surpasses the results of 2016 by nearly 15%. Thanks to Exporo.de and the Real Estate Crowdfunding vehicle, private investors now have the opportunity to profit from the attractive hotel real estate market. The platform launched the first crowdfunding projects “Hotel am Rebstockpark” and “Stahlgruberring” to finance hotel projects in Germany’s top locations Frankfurt am Main and Munich. How it works: Private investors select the desired project and directly make an investment starting from € 500. After their deposit, they can follow the construction development and achieve an annual return of 5-6 % depending on the project. The whole process is done online.
DEVELOPMENT OF THE TRANSACTION VOLUME IN GERMANY’S HOTEL INVESTMENT MARKET (2010 – 2016)
REAL ESTATE CROWFUNDING – CURRENT INVESTMENT OPPORTUNITIES
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