Hotels & Hospitality Hotel Intelligence Frankfurt 2013 - JLL
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Insert Client Logo Here Hotels & Hospitality Hotel Intelligence Frankfurt 2013
2 Hotel Intelligence: Frankfurt
Snapshot
Frankfurt is one of Germany’s leading business
destinations and is considered a city of international
importance, ranking 10th worldwide in the global
financial centres index 2013.
Visitation is primarily driven by corporate travel, with the
city being a European hub for banking and financial
services as well as accommodating one of Germany’s
most important trade fairs.
Although the lack of leisure travellers to the city results
in a relatively high fluctuation in tourism demand over
the week and throughout the year, the high share of
less price sensitive business travellers visiting Frankfurt
has historically led to stable ARR levels. Trade fair & congress
With a slowing supply pipeline in the next few years,
Frankfurt: Trade fair participants and events 2002 – 2012
existing hotels in Frankfurt are expected to strengthen
their current market position, leading to a rise in 3.0 50
achievable room rates going forward.
2.4 40
Participants (in million)
1.8 30
Events
Economy 1.2 20
0.6 10
Frankfurt’s economy benefits from a number of 0.0 0
international firms located in the city, including five 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
DAX-30 corporations. The city also accommodates the Participants Events
European Central Bank, the German Federal Bank and Sources: Frankfurt Trade Fair, Jones Lang LaSalle Hotels & Hospitality
Germany‘s main stock exchange, attracting a
consistently high flow of business travellers. Occupying a joint area of around 578,000 sq. m. of
exhibition space, Frankfurt’s trade fair and congress
Major employers are next to Frankfurt Airport,
centre are the second largest in Germany and rank
Germany’s single largest place of work, the Deutsche
among the world’s largest in terms of space.
Bahn AG, Deutsche Post AG and Continental AG.
The city is a well-established and renowned trade fair
Frankfurt has several large-scale infrastructural destination, hosting some 35 events that attract
developments that support the city’s standing as a between 1.6 and 2.0 million participants every year,
global business hub. Among the most renowned are the with odd-numbered years historically performing
newly-built mixed use districts of Europaviertel and stronger.
Gateway Gardens, which is next to Frankfurt Airport, as
The most prominent international events are the
well as the new development of the European Central
Frankfurt Motor Show (IAA) and the Frankfurt Book Fair
Bank in the city district of Ostend.
(held bi-annually).
In 2012, the trade fair attracted more than 1.6 million
participants, a rise of 15.9% compared to 2010.
Performance in 2013 is expected to exceeding the 2
million mark.
COPYRIGHT © JONES LANG LASALLE IP, INC. 2013. All Rights Reserved
Hotel Intelligence: Frankfurt 3
Airport Hotel supply
Frankfurt: Airport passenger volume 2002 – YTD June 2013 Frankfurt: Hotel supply 2002 – June 2013
60 300 50
50 250
40
Passengers (in million)
40
Establishments
Beds (in '000s)
200
30
30 150
20
20 100
10 10
50
0 0 0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD YTD 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Jun 13
Jun Jun
Total passenger volume 12 13 Establishments Beds
Sources: Arbeitsgemeinschaft Deutscher Verkehrsflughäfen (ADV), Jones Sources: Statistical Office of Hesse, Jones Lang LaSalle Hotels & Hospitality
Lang LaSalle Hotels & Hospitality
Frankfurt Airport is Europe‘s third busiest airport after As at June 2013, the Frankfurt accommodation market
London Heathrow and Paris Charles de Gaulle, and comprised 272 establishments with some 41,270 beds.
Germany’s most important transportation hub.
Frankfurt’s accommodation supply showed a strong
In 2012, the airport recorded a new all-time high in increase in the past decade (2002-2012), leading to a
passenger volume, exceeding the 57-million mark for CAGR of 3.9% in establishments and 4.5% in number
the first time (+1.8% year-on-year). of beds.
Between 2002 and 2012, the airport showed a A large proportion of new supply was completed at
continuous increase in passenger volume with a CAGR Europaviertel and the airport and was mainly in the mid-
of 1.7%. market and budget segments.
The airport is soon expected to reach full capacity. To Frankfurt’s hotel supply pipeline is expected to slow
accommodate this growing demand, the extension of down going forward, which will allow existing hotels to
Terminal 1 (A-Plus) was completed in 2012 and the strengthen their market position and capitalise on
construction of a third terminal, that will be able to positive tourist demand trends.
accommodate up to 25 million passengers a year, is
scheduled to begin in 2015. In addition, a mixed-use Following several years of strong supply growth,
development, Gateway Gardens, is to be located just Frankfurt now has the highest share of 5-star hotels in
adjacent to the airport. Germany, contributing 20.0% of total bed supply in the
city. Notably, has resulted in increased pressure on
The extension plans are expected to support Frankfurt’s achievable room rates in this segment, despite a
standing as one of the most important transport hubs in significant proportion of less price-sensitive international
Europe as well as the most important hub for the corporate guests staying in Frankfurt.
German flag carrier, Deutsche Lufthansa AG.
COPYRIGHT © JONES LANG LASALLE IP, INC. 2013. All Rights Reserved4 Hotel Intelligence: Frankfurt
Hotel demand Top feeder markets
Frankfurt: Hotel demand 2002 – YTD June 2013 Frankfurt: Nationality mix by overnights 2012
8 5
USA
7 14.4% United Kingdom
4
China incl. Hong Kong
Overnights (in million)
6
Arrivals (in million)
34.4% Arabic Gulfstates
3 8.2%
5 Spain & Portugal
Japan
4 5.6%
2 Italy
2 4.8% Benelux
1 France
1 4.8%
Switzerland
4.7%
3.3% Scandinavia
0 0 4.7%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD YTD 3.4% 4.6% South Korea
Jun Jun 3.6%
3.6% Others
12 13
Overnights Arrivals
Sources: Statistical Office of Hesse, Jones Lang LaSalle Hotels & Hospitality Sources: Statistical Office of Hesse, Jones Lang LaSalle Hotels & Hospitality
2012 represented a record year for hotel demand in Owing to its position as an international business hub
Frankfurt, with the city recording 4.3 million arrivals and and important trade fair destination, Frankfurt is the city
7.0 million overnights in all accommodation with the second highest share of international travellers
establishments, an increase of 10.6% and 10.6%, in Germany after Munich (45.4% of overnights in 2012).
respectively, compared to 2011.
Largely driven by international business travellers, The most important international source markets are the
Frankfurt’s hotel demand was significantly affected by USA (14.4% of all international overnights), the UK
the global financial crisis in 2009. However, the city has (8.2%), China and Hong Kong (5.6%), and the
since demonstrated a remarkable recovery thereafter, UAE (4.8%).
with a CAGR of 10.1% and 9.8% in arrivals and
Notably, due to Frankfurt’s standing as a global
overnights between 2009 and 2012, respectively.
business destination, the proportion of international
The city showed a promising trend, with an increase of guests visiting the city has not fluctuated in the last
3.0% in arrivals and 3.4% in overnights as at YTD June decade and is expected to remain stable going forward.
2013 compared to the same period last year.
COPYRIGHT © JONES LANG LASALLE IP, INC. 2013. All Rights ReservedHotel Intelligence: Frankfurt 5
Trading performance Hotel market outlook
Frankfurt: Hotel trading performance 2002 – YTD June 2013 The city’s density of key global companies, especially
160 100%
major banks and financial services institutions, strongly
140 90% support Frankfurt’s global standing as a financial
80%
120
70%
powerhouse, and are a guarantor for continuous, higher
ARR / RevPAR in EUR
100 60% yielding hotel demand to the city.
Occupancy
80 50%
40%
60
30% Due to its significance as an international transportation
40
20
20% hub, Frankfurt Airport will remain an important demand
10%
0 0% generator for the city’s hotel market. In particular, on-
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD YTD
Jun Jun going investments in airport facilities will enable an
2012 2013
increase in passenger volumes and sustain the airport’s
ARR (EUR) RevPAR (EUR) Occupancy (%)
reputation as a leading transport hub.
Sources: STR Global, Jones Lang LaSalle Hotels & Hospitality
Large infrastructure developments, such as the
Frankfurt’s hotel market has historically been seasonal,
Europaviertel, the on-going extension of the airport and
with peak demand periods being defined by the trade
the construction of the new European Central Bank
fair cycle and business travel to the city. Notably,
complex, highlight Frankfurt’s economic importance and
Frankfurt has struggled to establish itself as a leisure
can be expected to drive hotel demand in the future.
destination, with only limited demand increases at
weekends and during vacation periods, thus limiting The city’s stable visitation levels in combination with a
annually achievable occupancy levels. subdued development pipeline result in a promising
outlook for the Frankfurt hotel market.
Together with the strong increase in supply as well as
the seasonal fluctuations, Frankfurt’s performance has
grown only marginally, with average room rate showing
a CAGR of 0.2% (2002 – 2012), reaching EUR 135.30
in 2012.
Occupancy has remained very stable throughout the
past decade, with a marginal increase of 0.4% on
average per annum (2002 – 2012) leading to occupancy
levels of 64.8% in 2012. This in turn resulted in RevPAR
of EUR 87.60 last year.
YTD figures for June 2013 have shown a positive
development, with a year-on-year increase of 0.4% in
RevPAR supported by strong trade fair demand in 2013.
COPYRIGHT © JONES LANG LASALLE IP, INC. 2013. All Rights Reserved6 Hotel Intelligence: Frankfurt Appendix 1: Frankfurt hotel developments Frankfurt hotel developments (as at August 2013) Hotel Location Rooms Grade Due date Recently opened Meininger Hotel Frankfurt/Main Airport Bessie-Coleman-Strasse 168 3 Q1-12 Dormero Hotel Frankfurt Messe Lissabonner Strasse 2 148 4 Q1-12 B&B Hotel Frankfurt-West Wilhelm-Fay-Strasse 110 2 Q3-12 United Hostel Kaiserstrasse 52 120 1 Q3-12 Goldman 25hours (Extension) Hanauer Landstrasse 129 48 4 Q4-12 A&O Hostel Galluswarte Mainzer Landstrasse 226-230 311 2 Q2-13 The Qube Frankfurt Katharinenkreisel 177 4 Q2-13 Total rooms recently opened 1,082 New developments 2013 – Under construction Motel One Europaviertel Europaviertel 401 2 Q4-13 Wyndham Grand Collection Wilhelm-Leuschner-Strasse 32-34 293 tba Q4-13 Total Rooms 2013 694 New developments 2014 – Under construction Element Hotel Quartier Mondo, Gateway Gardens 133 3 Q2-14 Fleming's Deluxe Hotel (Extension) Eschenheimer Tor 2 97 5 Q3-14 Toyoko Inn Wilhelm-Leuschner-Strasse 138 3 Q2-14 Citadines Apart Hotel Europaviertel 165 4 2014 New Developments 2014 – Proposed Moxy Hotel Frankfurt Oberforsthaus tba 2 Q2-14 Hotel project Seegewann Rödelheim 58 tba 2014 B&B Hotel Mainzer Landstrasse 124 tba 4 2014 Hotel project Schöne Aussicht Schöne Aussicht 13-15 54 3 2014 Total rooms 2014 645+ New developments 2015 – proposed Apartment hotel project Schumannstrasse 2 Schumannstrasse 2 10 tba Q1-15 Innside Hotel Frankfurt Hanauer Landstrasse 162 4 Q4-15 Sofitel Frankfurt Opera Opernplatz 150 5 2015 Holiday Inn Frankfurt Mainzer Landstrasse 27-31 249 4 tba Total rooms 2015 – Proposed 571 Total rooms proposed/under construction 2013 – 2015 1,910+ Source: Jones Lang LaSalle Hotels & Hospitality COPYRIGHT © JONES LANG LASALLE IP, INC. 2013. All Rights Reserved
Hotel Intelligence: Frankfurt 7
Appendix 2: Frankfurt infrastructure developments
Frankfurt Infrastructure Developments (as at August 2013)
Under Construction
Dom-Römer-Areal The Dom-Römer-Areal is located in the historic city centre of Frankfurt on an area of some 7,000 sq. m. With
a total of 30 parcels, including new constructions as well as the re-construction of eight historic buildings, the
Dom-Römer-Areal will create an area defined by residential, retail and restaurant use in Frankfurt's city
centre.
European Central The construction of the new European Central Bank (ECB) headquarters started in 2010. For a total
Bank investment of approx. EUR 1.2 billion, two 185 metres high-rise buildings will be built on the site of the former
Grossmarkthalle (wholesale market hall) in the city district Ostend. The complex extends over an area of
15.5 hectares and is expected to include a building for the new European System of Financial Supervision.
The development is scheduled for completion in autumn 2014.
Europaviertel The new quarter "Europaviertel" will be built on a 90 hectare site. The main elements are a 60 metre wide
(European boulevard with office, retail and residential buildings as well as shopping, leisure and hotel facilities, including
Quarter) the 4-star 288-room Mövenpick Hotel Frankfurt City (opened 2006), the 3-star Meininger City Hotel with
some 164 rooms (opened in 2010) and the 3-star 148-room Dormero hotel (opened in 2012). By the end of
2013, another hotel, the 2-star 401-room Motel One Frankfurt-Messe, will be inaugurated. The key project is
the "Skyline Plaza" which is built on an area of about 47,000 sq. m. in the former freight yard. The area
consists of a retail area (approx. 38,000 sq. m.), restaurants (approx. 4,500 sq. m.), spa area (approx. 8,500
sq. m., tenant MeridianSpa GmbH) and a roof garden (approx. 11,500 sq. m.). The Skyline Plaza also
contains the 'Kap Europa', a convention center for up to 2,400 people, including a large congress hall on
approx. 1,200 sq. m. Skyline Plaza was just opened at the end of August 2013, the opening of the Kap
Europa convention center is scheduled for 2014. Located within the Europaviertel is the 'Tower 185', a high-
rise building comprising 100,000 sq. m. of office space. Occupying some 71,000 sq. m., the major tenant is
PriceWaterhouseCoopers. The completion of the entire Europaviertel is scheduled for 2019.
Gateway Gardens Located to the northeast of Frankfurt Airport, Gateway Gardens is being developed as a public-private
partnership (PPP) project, on a plot size of 35 hectares consisting of 20 construction areas grouped into 6
quarters. By 2020, the area will include space for offices and services, hotels, cenferences, trade shows and
exhibitions as well as shops, gastronomic outlets, educational and research institues. The area will be
connected directly to the railway network (station 'Gateway Gardens' and served by suburban lines S8 and
S9) with connections to Frankfurt's main transportation hubs. The station is anticipated to start operation from
2018. Some of the already realized projects are the 3-star 209-room Park Inn Hotel (opening 2010) and the
2-star 168-rooms Meininger Hotel Gateway Gardens (opening 2012). The Element Frankfurt Airport Hotel is
scheduled to open in 2014. The completion of the entire Gateway Gardens is scheduled for 2021.
Mönchhof Site The Mönchhof Site is located to the northwest of Frankfurt Airport and comprises a total area of 110 hectares
and 725,000 sq. m. of net building land. The Mönchhof utilization concept focuses on logistics, offices, and
small lots for service and trading companies. Since its launch in 2007, Mönchhof has taken off quickly and
full occupancy of all developments sites is expected to be end by 2018.
Proposed/Approved
Metro extension U5 The extension of the metro U5 will connect the Europaviertel with the local underground network. The
to Europaviertel opening was originally scheduled for 2016/2017, however, current conflicts with local authorities may lead
to a delayed construction start in 2017.
Frankfurt Airport The construction of a new passenger terminal (Terminal 3) is expected to start in 2015, increasing the
annual passenger capacity by 25 million. In 2020, the total passenger volume is expected to reach some
88 million.
Source: Jones Lang LaSalle Hotels & Hospitality
COPYRIGHT © JONES LANG LASALLE IP, INC. 2013. All Rights ReservedHotel Intelligence: Frankfurt Jones Lang LaSalle’s Hotels & Hospitality Group serves as the hospitality industry’s global leader in real estate services for luxury, upscale, select service and budget hotels; timeshare and fractional ownership properties; convention centers; mixed-use developments and other hospitality properties. The firm’s more than 265 dedicated hotel and hospitality experts partner with investors and owner/operators around the globe to support and shape investment strategies that deliver maximum value throughout the entire lifecycle of an asset. In the last five years, the team completed more transactions than any other hotels and hospitality real estate advisor in the world totaling nearly US$25 billion, while also completing approximately 4,000 advisory and valuation assignments. The group’s hotels and hospitality specialists pro-vide independent and expert advice to clients, backed by industry-leading research. For more news, videos and research from Jones Lang LaSalle’s Hotels & Hospitality Group, please visit: www.jll.com/hospitality This report is confidential to the recipient of the report. No reference to the report or any part of it may be published in any document, statement or circular or in any communication with third parties without the prior written consent of Jones Lang LaSalle Hotels & Hospitality, including specifically in relation to the form and context in which it will appear. We stress that forecasting is a problematical exercise which at best should be regarded as an indicative assessment of possibilities rather than absolute certainties. The process of making forward projections involves assumptions in respect of a considerable number of variables which are acutely sensitive to changing conditions, variations in any one of which may significantly affect the outcome and we draw your attention to this factor. Jones Lang LaSalle Hotels & Hospitality makes no representation, warranty, assurance or guarantee with respect to any material with which this report may be issued and this report should not be taken as an endorsement of or recommendation on any participation by any intending investor or any other party in any transaction whatsoever. This report has been produced solely as a general guide and does not constitute advice. Users should not rely on this report and must make their own enquiries to verify and satisfy themselves of all aspects of information set out in the report. We have used and relied upon information from sources generally regarded as authoritative and reputable, but the information obtained from these sources may not have been independently verified by Jones Lang LaSalle Hotels & Hospitality. Whilst the material contained in the report has been prepared in good faith and with due care, no representation or warranty is made in relation to the accuracy, currency, completeness, suitability or otherwise of the whole or any part of the report. Jones Lang LaSalle Hotels & Hospitality, its officers, employees, subcontractors and agents shall not be liable (to the extent permitted by law) to any person for any loss, liability, damage or expense (‘liability’) arising directly or indirectly from or connected in any way with any use of or reliance on this report. If any liability is established, notwithstanding this exclusion, it shall not exceed $1,000. COPYRIGHT © JONES LANG LASALLE IP, INC. 2013. All Rights Reserved
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