Berlin Hotel Market Spotlight YE Mar 2025

OVERVIEW

• The sample of branded full-service hotels in Berlin recorded a healthy increase in profit during the 12 months ending March 2025. Despite a 9.6% growth in expenses, the GOP per available room (PAR) increased by 4.1%, driven by a 7.9% revenue increase. In Q1 2025, the growth of GOP PAR continued but at a slower pace (+0.3% compared to Q1 2024).
• The key revenue driver was the Rooms department, with RevPAR increasing by 7.3%, underpinned by a 4.5% growth of occupancy and a 2.6% rise in ADR during YE March 2025. In Q1 2025, RevPAR increased by 4.3%, due to a 5.0% increase in occupancy and despite a 0.7% drop in ADR.
• Occupancy rates were boosted especially during the winter season, with the most substantial YoY increases in January 2025 (+15.3%), December (+14.8%) and November 2024 (11.9%).
• The performance growth was supported by the declining supply (-0.1%), as there were several hotel closures during the last 12 months (-1,592 rooms), surpassing the hotel openings (+602 rooms).
• The primary driver of expense growth was Payroll (+€6.5 PAR), followed by Other Expenses (+€5.1 PAR).
• Overall, while the nominal GOP PAR increased, the GOP margin declined from 30.7% to 29.6%, due to expenses outpacing revenue growth. As a result, only 15.9% of revenue growth flowed through to the bottom line.

SUPPLY

• Over the last 12 months, the Berlin hotel market saw several new hotel openings but also closures, resulting in an overall 0.1% decrease in total supply (-63 rooms, weighted by opening/closing date).
• There were 4 notable openings and re-openings (602 rooms) in Berlin during YE Mar 2025. Some hotels also underwent brand conversions, such as Radisson Collection (former Radisson Blue) and Roomers Berlin (Previously Autograph Collection). Most of the new hotels opened in the city center and within the Upper Upscale class (73.1% of new supply)
• The room additions in Berlin were offset by five hotel closures, of which two were repurposed into other types of assets, such as the Sheraton Grand Esplanade’s conversion into a mixed-use building or the City Hotel Berlin East being converted into refugee accommodation.
• The most significant supply decline was recorded in Berlin Centre West (-668 rooms), followed by Berlin Outer Boroughs (-311 rooms net). Due to two hotel openings and two closures, Berlin Centre East recorded only a marginal supply decline (-11 rooms net)
• There has been a shift between hotel classes, as most additions were Upper Upscale hotels (+440 rooms), while most rooms closed within the Upscale class (+530 rooms)
  

  

COST OF SALES

• Total Cost of Sales (COS) increased by 3.8% (+€0.7 PAR), driven by F&B (+€0.4 PAR) and Rooms (+€0.3 PAR) departments.

PAYROLL COSTS

• Total payroll costs registered a significant growth compared to last year (+12.6%), rising from €51.3 to €57.8 PAR. This growth partly reflects the increased occupancy and 3.8% increase in the minimum wage implemented in January 2024.
• The largest labor costs increase was in the F&B department (+€3.1 PAR, a 14.1% increase), followed by the Rooms department (+€1.9 PAR, a 11.7% increase).

UTILITIES COSTS

• The Utilities costs decreased by €0.9 PAR, from €8.7 (PAR) in YE Mar 2024 to €7.8 (PAR) in YE Mar 2025 (-10.7%).

OTHER EXPENSES

• Other Expenses recorded a YoY growth of 12.7%, increasing from €39.8 to €44.9 PAR. This was driven by a +€2.0 PAR rise in Other Expenses within the Rooms department (notably a +€1.2 PAR increase in contract services) and by +€0.6 PAR rise in S&M Other Expenses.

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2023, the firm reported revenue of $9.5 billion across its core services of property, facilities and project management, leasing, capital markets, and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity, and Inclusion (DEI), sustainability and more. For additional information, visit www.cushmanwakefield.com.

Christine Mayer
Head Of Hospitality Valuation, Germany
Cushman & Wakefield