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Taking Stock of Hotel Investment & Development in German-Speaking Markets Since 2015, the Austrian budget brand Harry’s Home has been present in Munich. Inventor and hotelier Harald Ultsch targets rate-conscious travelers and long-term guests with the lean and colorful concept and larger rooms. Concerning expansion, he wants to be present in the entire German-speaking market (in 2018 to Zurich/Wallisellen). As a new kid in the block, in 2016 MQ Real Estate in Berlin presented a prototype for his “My Quarter” (MQ) Hotels to be constructed of lightweight modules assembled on the roofs of parking garages or other commercial real estate. PREMIER INN CHALLENGES MOTEL ONE & ACCORHOTELS Despite all the new brands and enthusiasm for newcomers, insiders are eagerly observing the looming competition between the large budget providers: the pioneer and market leader AccorHotels, its powerful and fast expanding competitor Motel One and the solvent newcomer Premier Inn from Great Britain. The first German Premier Inn pre- sented itself as “premium economy” product in Frankfurt in 2016. The 201- room property is located near Messe Frankfurt and with its larger rooms (around 20 square meters), it has sig- nificantly more space than the normal economy standards (about 17 square meters on average). The team around Mark Anderson, Man- aging Director Premier Inn International at the parent company Whitbread, is speeding up now. “Our goal is to have about eight hotels in operation by 2020, and to create a portfolio of top-locations in important German cities in addition,” said Anderson. From the second half of 2018, the next Premier Inn hotels will follow in Hamburg, Munich and Leipzig, every three months. Openings for Essen and Freiburg have been planned for 2019; the premises were already purchased by Whitbread in Decem- ber. This way, the pipeline already boasts more than 1,100 rooms, including the 201 rooms in Frankfurt. “We bought the above-mentioned premises directly; however, we are currently also considering a few lease projects. This flexibility allows us to realize the best deals,” said Anderson. In Munich, at Premier Inn’s next location, the British company snatched away a top project at an A location from under Motel One’s nose. However, Motel One was able to snatch away many projects from AccorHotels in the last few years. The carousel keeps turning, but Motel One has the most consis- tent concept concerning location. For some years now, Motel One’s Mueller has only relied on abso- lute premium locations and mega volumes. This year, therefore, the entire industry is waiting for the imminent opening of the two new flag- ships in Berlin: the Motel One Berlin-Upper West with 582 rooms directly located at Gedaechtniskirche (Kaiser Wilhelm Memorial Church) and directly opposite the Waldorf-Astoria, as well as the Motel One Berlin-Al- exanderplatz, which will then be the largest hotel of the group with its 700 rooms. In addition, the Motel One Muenchen-Parkstadt Schwabing (the eighth hotel in Munich) and the Motel One Freiburg will open in 2017. Regarding the German-speaking market, the budget design hotel group opened three hotels in 2016: The 190- room Muenchen-Olympia Gate, the 141-room Stuttgart-Bad Cannstatt and 143-room and 143-room Basel. This year, Motel One will open eight new hotels with about 3,300 rooms. However, Motel One is not only oper- ator, but also owner and deal-maker. Due to the real estate boom Motel One as an owner sold several properties in the last four years and reduced its proprietorship from 40 to 25 percent. In 2015, the group caused a sensation for the first time, when it sold the initial generation of its budget hotels (nine properties) to the Louvre Group and Foncière des Murs. Mueller, known as a sensible calculator, knows how to use the prevailing market environ- ment. “We were able to refinance a portfolio of four of our hotel properties with a volume of 165 million euros via sale and leaseback at extremely good conditions,” he said. “However, concerning expansion, we are still very cautious and we only realize projects with a very high location quality, no matter if owned or via lease agreements.” While Motel One is still primarily an 7 HOSPITALITY INSIDE | IHIFPDF Image | Burgenstock Taking Stock of Hotel Investment
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