berlin skyline with office and hotel buildings

Rising Covid-19 infection rates and chaos caused by incoherently applied accommodation bans in several German states could cause an acceleration of restructuring activity in the German hotel market, according to an expert.

Last week, Chancellor Angela Merkel and the minister presidents of the German states had decided against a lifting of the accommodation ban that had been applied in most of the German states. It had been imposed by the state governments and prohibited accommodation providers from accepting travelers from coronavirus risk areas, unless they were able to present a negative Covid-19 test result that was no older than 48 hours. In most states, courts have now temporarily suspended the ban on accommodation.

Nevertheless, according to, a German national online news service, the regulation has already triggered a flood of cancellations at hotels. Experts had already expected a wave of bankruptcies in the hotel industry, which could now worsen due to the new measures taken to combat a second wave of the Covid-19 pandemic.

The five-star-hotel Sofitel Berlin Kurfürstendamm entered a preliminary insolvency proceeding in October. By the end of September, the forthcoming shutdown of the renowned Grandhotel Hessischer Hof in Frankfurt and Anna Hotel und Restaurant in München were announced. In all three cases, the hotel operators said that their financial difficulties had been caused by the Covid-19 crisis.

Jörn Fingerhuth, expert in hotels at Pinsent Masons, the law firm behind Out-Law, said that this can be seen as the beginning of a restructuring wave in the hotel operator market. He said it was partly caused and accelerated by losses in revenue due to the pandemic. The sector is facing many insolvencies and takeovers, Fingerhuth said: “For operators that are flexible and have built their businesses on solid financial grounds, there will be plenty of opportunities to enlarge their portfolio. On the other hand, many operators will be facing insolvency.”

Read rest of the article at Pinsent Mason