Berlin’s hotel market is one of Europe’s most dynamic hospitality ecosystems. It is shaped by shifting visitor flows and global events. The market is also influenced by new hotel openings and neighborhood-driven demand cycles. This Hotel Market Intelligence hub provides hoteliers, developers, and investors with a precise view. It offers tourism professionals an analytical perspective on how the market performs. It also indicates where the market is heading.

Key Highlights:

• 5.9 million visitors in H1 2025 (13.9 million overnight stays)
• Average occupancy: 52.8%, down from 53.8% prior year
• Net supply contracted 0.1% as closures exceeded openings
• Operating costs up 9.6%, limiting profit margins

The market benefits from temporary supply constraints and a robust events calendar. Yet, operators face significant margin pressure from cost inflation.

Market Overview

2025 Performance Snapshot

H1 2025 VISITOR METRICS
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Visitors:        5.9M  (↓ 1.8%)
Overnight Stays: 13.9M (↓ 2.9%)
Occupancy:       52.8% (↓ 1.0 pts)
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Q1 2025 HOTEL PERFORMANCE
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RevPAR:     +4.3%
Occupancy:  +5.0 pts
ADR:        -0.7%
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The divergence between Q1’s occupancy-driven growth and H1’s overall softness tells an important story. January through March benefited from exceptional winter season strength, with occupancy gains exceeding 15% in January alone. Nonetheless, spring and early summer months revealed weaker international demand.

What’s Behind the Slowdown?

Industry analysts point to three primary factors:

1. Airport Capacity Constraints — Berlin’s airports haven’t fully restored pre-pandemic service levels, limiting international accessibility
2. Weaker International Arrivals — European and North American source markets showing travel hesitation
3. Economic Uncertainty — Germany’s domestic economic conditions affecting leisure and business travel decisions

The Numbers That Matter

Year Ending March 2025: A Strong Foundation

The 12-month period ending March 2025 painted a more optimistic picture for full-service branded hotels:

ANNUAL PERFORMANCE (YE MARCH 2025)
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RevPAR Growth:        +7.3%
  ↳ Occupancy:        +4.5 pts
  ↳ ADR:              +2.6%

Operating Expenses:   +9.6%
Profit Flow-Through:  4.1%
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The Margin Squeeze Problem

Here’s the challenge operators face: for every €100 in extra revenue, only €4.10 flows to profit. The culprit? Soaring operating costs.

Labor expenses jumped after Germany’s January 2024 lowest wage increase. Energy costs stay elevated. General inflation affects everything from linens to food & beverage supplies.

Winter 2024/25: The Bright Spot

WINTER SEASON OCCUPANCY GROWTH
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January 2025:   +15.3% ████████████████
December 2024:  +14.8% ███████████████
November 2024:  +11.9% ████████████
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These double-digit gains show Berlin’s appeal during traditionally slower months. Holiday markets, New Year’s celebrations, and business travel drove exceptional performance.

Case Study: Holiday Season Success

The Christmas markets period (late November through December) showcased Berlin’s ability to attract both domestic and international leisure travelers. This occurred during off-peak months. Properties near Gendarmenmarkt and Alexanderplatz reported near-sellout conditions, with ADR premiums of 30-40% versus shoulder months.

Supply & Demand Balance

The Supply Contraction Story

Something unusual happened in the 12 months ending March 2025: Berlin’s hotel supply actually shrank.

NET SUPPLY CHANGE (12 MONTHS TO MARCH 2025)
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Rooms Closed:  1,592 rooms ████████
Rooms Opened:    602 rooms ███
Net Change:     -990 rooms (-0.1%)
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Major Closures:

Sheraton Grand Hotel Esplanade

• Location: Berlin Centre West
• Impact: Premium full-service rooms exited market
• Converted to: Mixed-use development
• Market effect: Reduced luxury supply near Potsdamer Platz

City Hotel Berlin East

• Converted to: Refugee accommodation
• Sector: Midscale
• Impact: Removed budget-friendly rooms from inventory

Geographic Impact:

• Berlin Centre West: -668 rooms
• Outer Boroughs: -311 rooms
• City Center: Relatively stable

Current Supply Landscape (June 2025)

BERLIN ACCOMMODATION INVENTORY
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Hotels/Inns/Guesthouses:   535 properties
  ↳ Beds:                   120,470

Other Establishments:       187 properties
  ↳ Beds:                   25,602

TOTAL CAPACITY:             146,072 beds
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Development Pipeline: What’s Coming

Approximately 4,800 rooms are in the pipeline (6.8% of existing supply):

PIPELINE BY SEGMENT
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Midscale/Upper-Midscale:  >50% ██████████
Economy:                  ~35% ███████
Upscale/Luxury:           ~15% ███
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2025 Key Openings

Property	Rooms	Opening	Segment	Strategic Position
prizeotel Berlin-City	278	Jan 2025	Midscale	Budget-conscious leisure
Hampton by Hilton Potsdam Babelsberg	168	May 2025	Midscale	Film studio proximity

The concentration in mid-scale and economy segments aligns perfectly with Berlin’s visitor profile. Unlike Munich or Frankfurt, Berlin attracts cost-conscious travelers—backpackers, cultural tourists, and budget-minded business visitors.

This strategic alignment suggests developers understand the market. But, it also means increased competition in the most price-sensitive segments.

2025 Demand Drivers

The Events Engine

Berlin’s performance lives and dies by its events calendar. The data from 2024 proves this conclusively.

InnoTrans September 2024

The International Trade Fair for Transport Technology demonstrated event power:

INNOTRANS PEAK PERFORMANCE (25 SEPT 2024)
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Occupancy:  95.3% ████████████████████
ADR:        €310.01
RevPAR:     €295.57

Monthly September 2024:
  Occupancy: 85.4% (+1.4% YoY)
  ADR: €177.49 (+18.4% YoY)
  RevPAR: €151.60 (+20.1% YoY)
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Occupancy stayed above 80% all but four days that month. This is the compression that allows hotels to push rate.

2025-26 Events Calendar

35th Anniversary: Fall of Berlin Wall

• Timing: November 2025
• Expected Impact: High
• Visitor Profile: International leisure, cultural tourists
• Hotel Implication: Multi-day stays, advance bookings

50th BMW Berlin Marathon

• Timing: September 2025
• Expected Impact: Very High
• Visitor Profile: International sports tourists + spectators
• Historical Performance: 88%+ occupancy, ADR premiums 25-35%

Berlinale Film Festival

• Annual Attendees: 20,000 trade visitors from 132 countries
• Cinema Tickets: 330,000+ sold
• Duration: 10+ days
• Hotel Impact: Citywide compression, particularly luxury segment

IFA Consumer Electronics Show

• Profile: Trade fair with international exhibitors and buyers
• Historical Impact: 80%+ occupancy during show dates

Source Market Composition

OVERNIGHT STAYS BY ORIGIN: This includes domestic stays and international stays.
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Domestic (Germany):    ~60% ████████████
International:         ~40% ████████
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TOP INTERNATIONAL MARKETS (2023)
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Great Britain:   1.3M overnight stays
Netherlands:     843K overnight stays
Spain:           643K overnight stays
Italy:           637K overnight stays
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The Domestic Foundation

Germany’s domestic travelers offer stability. They’re less affected by exchange rates, arrive via train or car, and visit year-round. This 60% base cushions against international volatility.

The International Opportunity

H1 2025’s weakness came from international softness. This shows both challenge and opportunity—there’s clear upside as air capacity recovers and these markets return to historical levels.

Poland shows particularly strong growth: +42% above 2019 levels. This emerging market offers significant expansion potential.

Economic Impact

TOURISM'S ECONOMIC FOOTPRINT
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Share of Berlin GDP:        ~4.6%
Jobs Supported:              224,800
Gross Value Added (2023):    €8.4B
Tourism Consumption (2023):  €15.1B
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This isn’t a minor industry—tourism is fundamental to Berlin’s economy. That creates political will to support the sector and keep competitiveness.

The Cost Crisis

Operating Expense Inflation

The single biggest challenge facing Berlin hoteliers in 2025:

EXPENSE VS REVENUE GROWTH
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Operating Expenses:   +9.6% ████████████████████
RevPAR Growth:        +7.3% ███████████████

Profit Flow-Through:   4.1% ██
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Cost Pressure Breakdown:

1. Labour Costs
   • January 2024 least wage increase
   • Tight labour market pushing wages higher
   • Payroll taxes and social contributions
2. Energy Expenses
   • Elevated from 2022-23 energy crisis
   • Seasonal heating costs in winter months
   • Limited ability to pass through to guests
3. Operating Supplies
   • Food & beverage entry costs
   • Linens and amenities
   • Cleaning and maintenance supplies

Midscale Hotel Cost Challenge

A 150-room midscale property in Berlin Mitte illustrates the problem:

• 2024 labour costs: €1.2M (+12% vs 2023)
• Total operating expenses: €3.8M (+10% vs 2023)
• Revenue: €4.5M (+6% vs 2023)
• EBITDA margin: 18% (down from 21% in 2023)

Management implemented productivity improvements including cross-training staff and optimizing scheduling, yet still faced margin compression.

Monthly Performance Expectations

2025 OCCUPANCY FORECAST
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Jan-Feb:  ████████████ 60%+ (winter strength)
Mar-Apr:  ████████     50%  (shoulder)
May-Jun:  █████████    55%  (spring recovery)
Jul-Aug:  ███████████  65%  (summer high)
Sep:      █████████████ 75%+ (BMW Marathon)
Oct:      ████████████ 70%  (autumn events)
Nov:      █████████████ 75%+ (Wall Anniversary)
Dec:      ███████████  65%  (Christmas markets)
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Critical Success Factors

What Will Decide Market Performance

1. International Demand Recovery The 42% international share is operating below potential. Recovery to 45%+ would significantly boost performance.

2. Cost Management Effectiveness Operators who can limit expense growth to <6% will see margin expansion. Those at 10%+ will struggle.

3. Events Execution Berlin Wall Anniversary and BMW Marathon 50th must deliver. Any disappointments would hurt H2 momentum.

4. Airport Capacity BER must continue adding routes and frequencies. This is beyond hotels’ control but critically important.

5. Economic Stability Germany’s broader economic health affects the 60% domestic base.

Berlin’s hotel market in 2025 defies simple characterization.

The good news: Supply constraints support pricing. Events calendar offers compression opportunities. Winter 2024/25 delivered double-digit occupancy gains. The domestic base provides stability.

The challenges: H1 2025 showed -1.8% visitor decline. Operating costs rose 9.6% while RevPAR grew just 7.3%. International demand remains soft. Airport constraints limit accessibility.

The reality: This is a market requiring operational excellence and strategic sophistication.

For operators:

Success demands aggressive cost management, sophisticated revenue enhancement during events, and service differentiation as competition intensifies.

For investors:

Opportunities exist, particularly in event-proximate assets with strong operators and solid cost structures. Still, underwriting must account for margin pressure and conservative international recovery assumptions.

For all stakeholders:

The second half of 2025 offers recovery momentum. The events calendar is strong. The supply picture is favorable. But success isn’t automatic—it must be earned through execution.

Berlin remains one of Europe’s most dynamic hotel markets. The fundamentals are sound. 224,800 jobs depend on tourism. The events engine drives predictable demand spikes. The capital city status ensures ongoing relevance.

The question isn’t whether Berlin’s hotel market will succeed. The question is:

Who will succeed within it?

Those who master revenue management, control costs, differentiate service, and position strategically will thrive. Those who work on autopilot will struggle.

2025 is the year that separates the sophisticated operators from the rest.