Our figure of the month 08/2020: Abrupt end of the boom in the accommodation sector due to Corona
Large cities particularly hard hit, holiday regions profit from preferred German holidays
The accommodation industry in Germany is one of the sectors most affected by the corona pandemic. The ten-year dynamic growth phase is thus coming to an abrupt end. In 2019, the industry as a whole set new records for overnight stays, with a total of around 500 million overnight stays and a 3.7% increase within one year and a 17% increase within the last five years (2014–2019). Over a fifth of overnight stays in 2019 were accounted for by guests from abroad.
The reasons for the decline are, on the one hand, the approximately eight-week closure of all establishments for tourism from mid-March to mid-May and, on the other hand, the high hygiene and safety requirements following the reopening of hotels, restaurants, guesthouses, holiday apartments and -houses and campsites – which is scheduled differently for each federal state. Until a vaccine is available, the regionally varying but everywhere limited occupancy rate of 50 to 80% in the hotel industry is likely to persist. With a sales share of approx. 90%, the hotel industry dominates total sales in the accommodation sector.
On the other hand, the consumer climate in Germany, which is important for the industry, has collapsed due to the pandemic. Combined with increased job insecurity and health concerns, this has considerably restricted consumers' desire to travel. Due to the cancellation of almost all trade fairs, congresses and business meetings until well into autumn 2020 and the financially strained situation of almost all companies, the number of business trips has also fallen drastically. Before Corona, about one quarter of overnight stays were accounted for by business travellers.
As can be seen in the chart, the total number of overnight stays in Germany from January to May 2020 has almost halved to -49% compared to the same period last year. In view of the fact that entry and exit restrictions continue to apply worldwide in both the tourism and business travel sectors, the share of foreign travellers (-56%) is much more affected than domestic demand.
On the positive side, the bottom of the trough is likely to have been passed after a drop in overnight stays of almost 90% in April (-89% overall, -93% foreign guests). In May 2020, the decline was still strong at -75% compared with May 2019, but there are clear signs of recovery with establishments reopening from the second half of May onwards. No figures are yet available from official statistics for the summer. In view of current surveys and reports, demand is very high, especially in the holiday regions around the North and Baltic Seas, but also in the southern German regions. Nevertheless, it will probably not be possible to make up for the lost sales from the cancelled, non-recoverable Easter holiday and spring season by the end of the year. As a result, overnight stays and turnover are expected to decline in the higher, double-digit range in 2020.
The federal states are affected to varying degrees. The big cities, which have benefited from booming city tourism and a steadily growing number of guests from abroad in recent years, are particularly hard hit. The downturn in overnight stays in the city-states of Berlin and Hamburg was accordingly among the highest at -55% and -52% overall and -60% each for foreign guests. Occupancy rates in the major cities remained extremely low in June and July as well, at less than a quarter in Berlin, for example, which is likely to be due primarily to a lack of foreign tourists and the continuing very weak business travel market. As the prospects in these demand segments are also very subdued for the second half of 2020, hoteliers in the major cities will remain the hardest hit by the corona pandemic.
The federal states with the most popular holiday regions in Germany also suffered a sharp decline in overnight stays in spring. Mecklenburg-Western Pomerania was particularly hard hit with -54%, Lower Saxony (-51%) and Schleswig-Holstein (-50%) in the north, but also the southern German states of Bavaria and Baden-Württemberg (-49% each) with their tourist regions in the mountains and on the lakes were affected disproportionately, especially as the lockdown for the hotel industry lasted about two weeks longer here than in the rest of Germany. However, as already mentioned, these tourism-intensive federal states benefit in the summer months from the boom in German tourism in view of the ongoing pandemic.
Other figures can be found here.