Investing in a hotel in Germany

Why invest in a hotel in Germany?

With more than 2.600.388 overnight stays in December 2019, Berlin becomes one of the most loved destinations. The city is attractive because of its lifestyle with flew markets, techno clubs and gastronomy. Here happen politics, economy and art. But its not only Berlin itself. Better known for sending tourists to our beaches, Germany also has a strong tourism industry that continues to attract holidaymakers from all over Europe. Germany is also a land of conventions and conferences where many professionals meet to discuss the latest trends in the sector. All these factors encourage investment in a hotel in Germany.

The rate of return is particularly attractive in this segment even on B properties. As there is so little supply of exceptional properties, many investors are turning to mid- and low-range hotels, which offer similarly attractive returns with lower risk.

What are the criteria to consider?

This segment has an excellent reputation for its return on investment, but supply is still limited. As with any type of property, location will determine the value of a hotel investment in Germany. The city centre remains highly sought-after. However, especially in B properties, less attractive locations such as the vicinity of a railway station, airport or convention centre can also be a good investment. The client is looking for comfort and prestige for luxury hotels, but is also looking for practicality for medium and low-range hotels. A good location therefore turns out to be different notions depending on the hotel segment.

In order to make the right choice, it is necessary to be interested in the dynamics of tourist and business traffic. For example, the creation of a large convention centre or amusement park in the vicinity can greatly increase the value of a hotel.

Also pay attention to the types of investments possible in hotels in Germany. There are several ways to invest your capital. You can decide to only acquire the walls and leave the operations to an occupant, but it is also possible to take a share in the capital of the hotel operator itself. The rate of return is higher but the risks are obviously higher. There is also a whole range of hybrid contracts between these two options in order to achieve a more balanced compromise.

Finally, beware of the old one for exceptional hotels: it is sometimes difficult to acquire additional stars in buildings that do not allow the creation/maintenance of the high-end services required to obtain the precious sesame due to a lack of space or because of the obsolescence of certain equipment.

The advantages of our agency for your search

• We carefully study your project and your objectives
• You benefit from the close proximity of our many local partners and their knowledge of the field
• We accompany you at every stage of the research process
• We advise you in the management and tax optimisation of your investment