Munich Current situation

Munich's hotel market continued to develop positively last year. The number of arrivals

rose in 2012 to approximately 6.1 million (+3.4 % year-on-year) and overnights rose to a

total of around 12.4 million (+5.4 %). Some 5.6 million arrivals (+2.8 %) and 11.2 million

overnights (+5.3 %) were accounted for by hotels and bed-and-breakfast hotels, corre-

sponding to a share of 91 % and 90 % respectively. Overnights of international guests

increased by around 9.2 % to a proportion of approximately 47.9 % of total overnights.

However, supply showed only slight changes in 2012; the number of accommodation

operations (hotels and bed-and-breakfast hotels) fell by one to 345, while the number of

available beds showed a minimal rise to around 52,800 (+0.2 %).

Average net room rate, room occupancy rate and RevPAR

Munich hotels in the three to five-star categories analysed in a PKF analysis increased their

average net room rate in 2012 by 8.5 % to around 111 EUR. At the same time, average

room occupancy rate rose slightly to 75.3 % (+1.8 % points), increasing the RevPAR of the

hotels analysed by 11.2 % to approximately 84 EUR. Munich's RevPAR rate was therefore

top out of all major cities analysed in Germany.

This positive trend continued into the first quarter of 2013. Between January and March, the

net room rate was around 118 EUR (+8.1 % year-on-year), while occupancy rose by ap-

proximately 1.3 % points to 69 % and RevPAR increased to around 82 EUR (+10.2 %).

Issue 02|2013

Munich hotel market in figures

Hotels1)2)4)

Beds1)2)4)

Arrivals1)2)

Overnights1)2)

Ø length of stay1)2)

International

overnights3)

Proportion of total

overnights

Ø room occupancy5)

Ø net room rate5)

2012

345

52,792

5,582,483

11,165,340

2.0

5,924,393

47.9 %

75.3 %

110.89 EUR

2011

346

52,700

5,430,449

10,601,209

2.0

5,421,929

46.2 %

73.5 %

102.22 EUR

Notes and sources: 1) Information refers to hotels and bed-and-breakfast hotels

2) Bavarian State Statistics and Data Processing Office

3) City of Munich

4) As at June of year in question

5) PKF Monthly German Trends Survey Ph

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PKF city ticker

Detailed analysis for 2012

PKF city ticker

The diagrams show trends in average net room rates, average room occupancy and RevPAR for Munich hotels in 2012 in a

year-on-year comparison. The data is sourced from sampled hotels in the three- to five-star categories, primarily branded,

which are tracked monthly in the PKF Monthly German Trends.

Average net room rate

In 2012, the average net room rate rose by around

8.5 % year-on-year to 110.89 EUR. The highest

net room rate of 162.24 EUR was achieved in Sep-

tember 2012. The high price level is due to the an-

nual Oktoberfest, although it fell slightly short of the

prior year's rate (-2.8 %). The winter months of

January and February also showed a decline from

2011 (-7 % and -4 % respectively). The highest

increases year-on-year were seen in May (+25 %)

and August (+29.2 %); the latter is due to the Con-

gress of the European Society of Cardiology

(ESC), held from 25 to 29 August 2012 in Munich.

Issue 02|2013

Average room occupancy

In 2012, average room occupancy also rose year-

on-year by a total of 1.8 % points to 75.3 %. The

highest year-on-year increase was seen in Au-

gust, at 6.9 % points – also attributed to the car-

diology congress; in addition, in 2012 Ramadan,

the month of fasting for Muslims, did not fall com-

pletely in August, which also boosted demand

from Middle Eastern guests. As in the previous

year, September showed the highest room occu-

pancy rate, at 88.4 %, and January the lowest at

65.5 %.

RevPAR (Revenue per available room)

In 2012, RevPAR fell year-on-year in the months

of January (-3.2 %) and February (-8.9 %), and

slightly in September (-0.7 %). However, in the

remaining months significant growth rates, some

even reaching double digits, were noted. The

month of August showed a stellar increase of

around 42 % to 94.27 EUR. The Munich hotels

analysed noted a year-on-year increase in Rev-

PAR of 11.2 % to 83.50 EUR. The lowest RevPAR

of 63.26 EUR was seen in December, while the

highest of 143.42 EUR was seen in September.

Change (%)

Source PKF Monthly German Trends

Dec. YTD

Munich

4.5 8.5

84.93 102.22

88.73 110.89

-4.0

Room Rate

116.54

ø Net

2011

2012

-7.0

108.34

25.0

96.92100.73

5.5 12.2

106.23 108.75

Nov.

108.18

14.1

147.22

114.42114.32

13.53.3 -2.829.2

147.72 128.71130.49 118.15

117.76112.65

162.24123.88

16.0

110.97130.18166.9595.90

April JulyJuneMayJan. Oct.EUR Feb. March Sept.Aug.

0

30

60

90

120

150

180

Change (%-Points)

Source PKF Monthly German Trends

Dec. YTD

Munich

2.7 1.8

68.6 73.5

71.3 75.3

-3.7

Occupancy

62.92011

2012

2.6

65.5

-1.5

68.869.3

-0.9 -0.2

68.4 68.6

Nov.

67.9

0.3

76.7

85.176.2

1.81.0 1.96.9

85.0 76.476.5 86.1

78.271.6

88.476.1

-0.9

77.383.286.569.2

April JulyJuneMayJan. Oct.% Feb. March Sept.Aug.

0

20

40

60

80

100

Change (%)

Source PKF Monthly German Trends

Dec. YTD

Munich

8.6 11.2

58.23 75.08

63.26 83.50

-8.9

RevPAR

73.322011

2012

-3.2

70.96

22.7

66.6469.81

4.1 11.9

72.66 74.60

Nov.

73.45

14.5

112.92

97.4287.15

15.94.4 -0.742.0

125.56 98.3399.82 101.73

92.0480.60

143.4294.27

14.7

85.72108.30144.4866.38

April JulyJuneMayJan. Oct.EUR Feb. March Sept.Aug.

0

30

60

90

120

150

180

Hotel market in figures The number of hotel operations (including bed-and-

breakfast hotels) in Munich rose by around 5.2 % from 2008

to 2012, from 328 to 345, peaking in 2011 at 346.

Over the same period the number of available beds likewise

increased from 45,481 to 52,792 (+16.1 %).

As a result, the average number of beds per hotel rose from

approx. 139 in 2008 to around 153 in 2012 (+10.1 %).

Key demand generators

PKF city ticker

Business

Munich has a population of around 1.4 million and is thus

Germany's third largest city after Berlin (approx. 3.5 million

inhabitants) and Hamburg (approx. 1.8 million inhabitants).

As an economic region, Munich is one of Germany's leading

economic centres. Major listed companies domiciled in Mu-

nich include Siemens, BMW, EADS, MAN and Linde. In addi-

tion to these companies, large-scale banks including the

Unicredit Group (HypoVereinsbank) and the Bavarian State

Bank as well as insurance companies such as Allianz AG

and Münchener Rückversicherungs-Gesellschaft (Munich

Re) are located in Munich.

According to information from the Federal Employment Agen-

cy, unemployment in the Bavarian capital was 5.4 % in

March 2013 (+0.3 % year-on-year) and thus over the Bavari-

an average of 4.2 % but lower than the national average of

7.3 %.

A major demand generator for the region is Munich Airport,

which registered Germany's second largest passenger fig-

ures for 2012 with around 38.4 million passengers (after

Frankfurt with approx. 57.5 million passengers).

Issue 02|2013

Exhibition and conference centre

Messe München operates a modern exhibition and confer-

ence centre where 245 events were registered in 2012 with

around 35 thousand exhibitors and approx. 1.8 million visitors

(including its conference centres ICM and MOC). The best-

attended exhibitions last year were IHM, Ifat, f.re.e and Heim

+ Handwerk. A further increase in visitor numbers is antici-

pated for 2013, when the high-traffic exhibitions BAU and

bauma will coincide.

Culture and tourism

In addition to business-related demand, Munich is one of

Germany's most popular destinations for city tourism, with

numerous sights and cultural attractions including the Cathe-

dral, Nymphenburg Palace, BMW Welt, the Deutsches Muse-

um and the Pinakotheken art galleries. The annual highlight

is the Oktoberfest, which brought around 6.4 million visitors

in 2012. The city's proximity to the Alps is a further attractive

feature. In 2012 international visitors accounted for around

48 % of overnights in Munich, with the main markets includ-

ing the USA, Italy, the UK and the Gulf states.

The number of arrivals in hotels and bed-and-breakfast ho-

tels rose over the past five years from approx. 4.4 million in

2008 to around 5.6 million in 2012 (+28.2 %).

Over the same period, the number of overnight stays grew

from around 8.8 million to approx. 11.2 million (+27 %).

The average length of stay in the Munich hotels and bed-

and-breakfast hotels analysed remained stable over the

period examined, at approximately two nights.

Average bed occupancy rate rose over the past five years

from approx. 52.8 % in 2008 to around 57.8 % in 2012

(+5 % points).

Hotels

Beds

Beds p. H.

Note 1) Hotels and bed-and-breakfast hotels

Source Bavarian State Statistics and Data Processing Office

345

52,792

152 153

52,700

144 145

45,481 49,101 50,196

139

Beds2008

Hotels/

Beds

p. Hotel

Hotels/Beds total/Ø Amount of beds p. Hotel1)

2009 2010 2011 2012

328 346 345340

0

10,000

20,000

30,000

40,000

50,000

60,000

0

50

100

150

200

250

300

350

Arrivals2)

Overnights2)

Length of st.

Notes

Source Bavarian State Statistics and Data Processing Office

5,430

10,0128,8938,791

Arrivals

Overnights

'000

2) numbers p. year in thousand, including rounding differences

2.0

Arrivals/Overnights/Ø Length of stay1)

2008 2009 2010 2011 2012

4,353 5,075

Ø Nights

2.02.0

10,601

1) in Hotels and bed-and-breakfast hotels

2.02.0

11,165

4,516 5,582

0,0

0,5

1,0

1,5

2,0

2,5

0

2.000

4.000

6.000

8.000

10.000

12.000

Hotel projects

According to research by PKF hotelexperts, there are currently plans for

around 2,400 additional rooms in branded hotels in Munich. The following list

shows a selection of planned hotel projects and expansions (no claim to com-

pleteness):

Cocoon, Lindwurmstraße 37, expansion 2013 (+40 rooms)

Adagio Access, Am Oberwiesenfeld, opening 2014 (160 rooms)

angelo Hotel München Leuchtenbergring, Leuchtenbergring 20, expansion 2014 (+52 rooms, +28 apartments)

H2 Hotel, Olof-Palme-Straße (Exhibition Centre), opening 2014 (205 rooms)

ibis budget, Am Oberwiesenfeld, opening 2014 (162 rooms)

Ramada Hotel & Conference Center, Olof-Palme-Straße (Exhibition Centre), opening 2014 (330 rooms)

aloft, Bayerstraße 35, opening 2015 (184 rooms)

ibis, Arnulfstraße, opening 2015 (202 rooms)

nordic pure hotel, Zamdorfer Straße 120, opening 2015 (192 rooms)

Novotel, Arnulfstraße, opening 2015 (190 rooms)

Hotel am Schwabinger Tor, Leopoldstraße, opening 2015/2016 (320 rooms)

PKF hotelexperts GmbH Maximilianstraße 27 80539 München tel: +49 (0)89 290 32-200 fax: +49 (0)89 290 32-222 email: info@pkfhotelexperts.com web: www.pkfhotelexperts.com Editorial contact for queries and suggestions: Contact: Caroline Schade tel: +49 (0)89 290 32-201 email: caroline.schade@m.pkf.de

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vide a fast, compact overview of

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Disclaimer: This report and the figures, trends and

details of possible reasons for change are based

on careful market research. Although PKF hotel-

experts assembles this information with the ut-

most care, no guarantee can be given for the

completeness and up-to-dateness of the infor-

mation. As at: April 2013

Summary and future prospects

PKF city ticker

Although the supply side of the Munich hotel market changed little in 2012, de-

mand reached a peak last year with approximately 5.6 million arrivals and around

11.2 million overnights in hotels and bed-and-breakfast hotels.

Furthermore the 2012 performance of the hotels in the three- to five-star categories

analysed by PKF was uniformly positive, with growth in both the average room rate

and the average room occupancy; as a result, RevPAR rose by around 11.2 % to

83.50 EUR. A benchmark comparison with other German cities shows Munich in

the lead for RevPAR.

The positive trend in Munich is expected to continue during the current year. In the

first quarter, the hotels in the sample already showed RevPAR growth of approxi-

mately 10.2 % year-on-year (YTD March 2013). In addition, demand is expected to

gain positive impetus in 2013 from the two high-traffic exhibitions BAU (biennial)

and bauma (triennial).

Growth is also probable on the supply side with numerous new hotel projects; how-

ever, changes are likely to be only moderate given the high rental and land prices

and scarcity of building plots. Ultimately, developments on Munich's hotel market

will largely depend on the overall economic situation and further progress in the

Euro crisis.

Issue 02|2013