Welcome to another Expert Insights discussion. Today we are joined by our regular guests from berner+becker, one of our Expert Partners:
🔹 Veit Meier – Director of Operations
🔹 Till Benthien – Senior Revenue Manager and Head of Employee Development
In this discussion we reflect back on our conversation in April to see how the German Hotel Market has changed in the last 3 months.
We cover a number of topics, touching on different German regions, inbound travel, groups and events business, pricing and changing compsets.
Hope you enjoy it 🤞👍
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🎞 Video Chapters:
- Guest Welcome (1:07)
- German Hotel Region Update (1:49)
- International inbound travel (8:05)
- Group and events business (12:07)
- Group business pricing (22:34)
- Changing compset and segmentation (27:28)
- Wrapping up (41:20)
- Additional Videos and Subscription (43:37)
Here is some headlines from the discussion
When looking at the regions
Veit: “But one of the things I wanted to highlight is actually, if we’re looking at the middle band, in Germany, I think this is where we see a huge difference between whatever’s going on in the northern part of Germany, and also in the southern part of Germany, because the middle band of Germany, even though those are, let’s say, holiday regions and recreational regions as well, I think they are just stumbling into that summer period right now. They’re still waiting for pent up demand actually to come to come in. I think people have visited those regions, from a domestic standpoint, over the last year, because Germans were not allowed to travel anywhere else – booking hesitation is also still evident.
Till: “It’s definitely greater competition. In a recent study it showed people still prefer a type of holiday that is self-organised and about 79% answered, here in Germany, that they want to travel by car, another 12%, by train, so you can see that flying is not really an option. It could very well be that people have already seen these middle regions, it’s also a different type of holiday. It’s more like an active holiday, where you maybe go hiking or mountain biking, lots of outdoor activities. It’s a different mode of holiday, if you just want to relax, and you want to lie next to the beach. So there might be a desire to see something else – the sea and the beach – after being at home for such a long period of time.
When considering inbound international travel
Veit: “It’s interesting, and sad as I think about it, that international tourism, or international travel, historically has not been that much of an influencing factor for that middle region in Germany. I wouldn’t know if Americans would have found their way to the mountains or to the forest. But obviously, when it comes to a city demands, and already looking a little bit further ahead not only for the next two to three weeks, or let’s say that the next six weeks, but rather looking into September, October time, I think international travel from the US will certainly be an influencing factor for whatever’s happening in destinations like Munich, maybe also Frankfurt, and certainly also some of the biggest city destinations in Germany. So that’s certainly positive signs on the horizon to get that city demand actually back up.
When looking at group business
Veit: “What we’re seeing right now is even groups get requested quite short term and the size of the groups gets a lot smaller. Looking at Munich, previously we had a couple of big fairs happening in September, October, November – all those fairs are pretty much not happening. If any of them are happening, then it would be on a much smaller extent. So the same happens to the group business. There’s no need to place a group with 150 people, but it’s rather a group with 25 to 50 people coming in and being requested. For hotels, they need to be on their toes and still staying flexible because who knows what’s going to happen with the virus, moving into quarter four. And if something has to be cancelled again, obviously, as a hotel, you would be willing to directly offer alternative dates, and move those reservations rather than trying to charge your clients for not showing up.
Till: “As Veit said, what we see in general is that this group segment gets much more fragmented. You don’t have one big request, but you have maybe two or three smaller ones that add up to maybe the same size. But this also poses another challenge on the hotels with maybe their staff not even back. Hotels or restaurants are looking for qualified staff, because people have left the properties during the pandemic and maybe have found an alternative employment and are now really not really willing to come back. So you maybe have less staff. As these groups get much more fragmented, for a group of 100 people, it’s basically the same process you need to go through in terms of preparing the event and conducting it, then doing the same thing for five different groups, then you suddenly have five preparatory talks, you need to send out the contract five times you need to renegotiate the contract five times. So this is much more time consuming at a time where there’s maybe even less staff on property that can handle it.
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