Boom for budget hotel business in Germany

Germany attracts brand and franchise investors
Germany is an unexploited destination for investors and developers in the budget segment of the hospitality industry. Now companies are moving into the country to cash in on one of Europe’s strongest economies.
Among many agreements, easyHotel has signed a franchise deal for a site in Bernkastel-Kues, a health resort 20 minutes from Frankfurt-Hahn Airport that attracts 2.7 million guest-nights a year.
Foncière des Régions has signed a €125-million sale-and-leaseback deal on five properties with NH Hotels Group. The group has also strengthened its hotel exposure with secured acquisitions.
“As the budget hotels show the highest growth rates in the hotel industry in Germany and as international hotel companies are not willing to conclude lease contracts due to accounting reasons, there are quite a lot of new franchises entering the market,” said Ulrike Schüler, managing partner at accountancy PKF.
“Budget hotels are becoming increasingly attractive among investors’ investments. In recent years, hotel properties have undergone a positive change of image and are today recognised as an asset class in the category of specialised operator-run properties.”
She added that budget hotels “provide relief with advantages on the cost side such as area efficiency through smaller rooms, no full-service restaurant or function rooms, which can increase profitability”.
Hotel Management

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