German Hotel Revenue Managers look to cash in on Euro 2024
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Match days are driving big hotel room price increases in host cities across Germany, but many fans are waiting to see how their team progresses before pressing the button to book.
While German football fans are hoping that die Mannschaft, or men’s national team, will be resurgent given their home advantage in this year’s Euros, the German hospitality industry is similarly optimistic of a strong performance for its hotels and short-term rental accommodation.
The country is hosting the football tournament at 10 venues around the country through 51 games across 22 match days from 14th June to 14th July, which should generate plenty of additional demand in these host cities for accommodation given that this tournament has the highest potential attendances of any Euros thus far.
Our deep dive into the data reveals that there is plenty of positive potential across these cities, with hotels making the most of the demand and pushing up pricing on match days. Short-Term Rentals (STRs), on the other hand, lag behind, despite better on-the-books performance.
Hotels have set high rates above those of STRs even though the booking curve is somewhat unspectacular thus far, banking on future demand indicators coming true.
These trends are being driven by the tournament structure, location and ticket sales, which will lead to a late run on accommodation markets and peak demand occurring shortly before the tournament is held.
Thus, hoteliers and STR managers would be wise to hold the line when it comes to pricing and prepare for the surge, especially in the knockout phases, where comparatively few bookings have yet to emerge.
Snapshot summary for accommodation providers:
Hotels in the 10 host cities are on average pricing a standard room 57% above the rates seen in the six months from March to August 2024 excluding the Euros.
STRs are seeing a smaller bump of 16%, despite having higher on-the-books reservations during the tournament.
Peak prices in many cities thus far are for the group stages, where the line-ups are known and the tickets have been released. Price peaks directly correlate to match days in host cities.
Due to the way ticketing is structured, bookings will be made later than for comparable major sporting tournaments. Accommodation providers should be aggressively pricing for cities hosting games in the knockout stages even if the booking curve is underwhelming thus far.
Euro 2024 is this year’s biggest demand and pricing driver for host city hotels
Hoteliers in the 10 host cities are alive to the potential demand generated by the Euro 2024 football tournament and are setting rates substantially above the average.
They are wise to do so, as although many tickets will be snapped up by local fans in football-mad Germany, there is a huge number of overall seats and many tickets have been allocated to international fans from all the participating nations in what is a convenient, highly accessible, central location.
According to Statista the total potential attendance, if stadiums reach capacity, is 2.7 million. This would make it comfortably the largest tournament yet, exceeding the 2.4 million for France 2016, the last comparable tournament.
There seems little reason to expect anything but a sellout either, as governing body UEFA have reported that the application phase for tickets generated an oversubscription to the tune of more than 20 million applications chasing these coveted seats.
Hotels are posting higher prices accordingly. Across the 10 host cities, a basic mean average for a standard hotel room over the next six months shows that rates have increased from €147 outside the tournament to €231. This represents an increase of 57%.
Naturally, the highest prices to be found for a standard hotel room are in Berlin for the final at €583, but other extremely high prices relative to the norm can be found in Dortmund and Cologne during the group stages.
On 15th June rates hit €552 in Dortmund for Italy vs Albania, €528 on 19th June in Cologne for Scotland vs Switzerland, and €504 on 22nd June in Dortmund for Türkiye vs Portugal.
Dortmund is the overall star performer of host cities, with hotel room rates up 124% during the tournament
German short-term rental pricing lagging behind hotel counterparts
STR pricing is not nearly so aggressive, rising by a much more genteel 16% during the tournament compared to the surrounding six months from the time of writing in March.
Even in star performer Dortmund, average pricing for an STR is only up 20% during the Euros, peaking at a nightly rate of €119 on June 19th.
Hotel and short-term rental occupancy indicators tell another story
Despite the potential demand inbound to the German market and the positive pricing movement for hotels in particular, on-the-books occupancy is far from spectacular thus far for such a major event.
Looking at cities where suitable occupancy data is available from hotels in our commercial platform (Berlin, Dusseldorf, Frankfurt, Hamburg and Munich), we can see that there is some elevation in the booking curve for hotels during the group stage of the tournament, but limited impact in the knockout stages thus far, despite all of these cities hosting at least one match.
When it comes to STRs, an average across these same locations shows STRs are outperforming hotels throughout the tournament, with occupancy rates typically running around 10-percentage-points higher than for hotels.
Berlin and Dortmund in the spotlight - a closer look at the dynamics at play
So, how come hotels are so much more optimistic despite lower bookings thus far; what are they expecting as the tournament progresses, and what is the true demand potential?
To understand, let’s take a closer look at two of the top-performing markets – Berlin and Dortmund.
These two cities are experiencing the biggest increases in standard hotel room rates, with the highest peak rates thus far and biggest average increases between the tournament start and end compared to the surrounding months.
When we break it down and look at the pricing for these cities during the tournament, we can see just how strong a driver the Euros are.
Throughout the period 14th June to 14th July, each spike in pricing is a game date in both cities, pushing prices on those days to 3 times their typical level outside the tournament in the case of Dortmund and a little over 2.5 times standard rates in Berlin.
Alongside Munich, these cities are hosting the highest number of games at six, and these three locations also have the largest stadiums by capacity, at around 70,000 spectators in each case.
Dortmund is also a supply-constrained city, sitting outside the major tourist draws in the country and not even in the top 10 markets for hotel rooms.
However, turning once more to occupancy, Berlin is not hugely above typical norms, even for the final, which is thus far the highest priced point across all of the host cities. Occupancy on this final day sits at 25% at the time of writing, compared to 12% for the following Sunday. While elevated, it is hardly spectacular for Europe’s premier football tournament.
So, why are hotel prices up, and up so much compared to STRs?
The answer may lie in the information advantage many hotels enjoy.
Hotels, particularly global chain properties, typically have Revenue Management departments with advanced technology at their disposal, that possess forecasting capabilities based on predictive analytics. This could be what is advising hoteliers that full demand will emerge soon and to continue to be firm on pricing.
Looking at our own demand level indicator, using Market Insight data, the spikes are immediately obvious and correlate closely to the patterns in hotel pricing thus far.
For example, demand indicators are currently lower at this stage for the semi-final match in Dortmund on 10th July compared to the preceding group matches, and so prices are slightly lower, showing that hotels can measure and are responding to interest on key dates.
This measure compiles occupancy rates, unavailable hotels and flight and hotel searches made across GDS, metasearch and Online Travel Agency (OTA) platforms.
This gives a strong composite indication of the demand pipeline and underlines that there is interest far above typical norms during the tournament, even if fans have not yet committed to making a booking in the majority of cases thus far.
Expect a late booking surge and increased STR and hotel room prices as Euro 2024 draws closer
Compared to say, the Olympics, Super Bowl, or even the FIFA World Cup, this is quite a different booking curve.
For these events, typically there is a high proportion of bookings made far out from the key dates and a major positive disruption to the booking curve.
This tournament has its own dynamics though, which is why accommodation providers can be confident and should be prepared to maximise their inventory close to the match days.
As noted earlier, registrations and sales have been extremely strong and forward demand indicators show substantial interest. Demand will emerge later due to the ticket allocation and release system, alongside the location of the tournament at the heart of the continent.
Initial tickets for the group stages have been released by various national football federations in a lottery format for almost all matches. However, resale only begins in early May and knockout stage tickets then follow the same pattern subsequently.
This means many fans have yet to finalise plans or acquire tickets in many cases and especially so for those all-important playoffs, hence why we see lower bookings for the knockout stage currently.
Then there is location, which allows for more flexibility for fans and a smaller incentive to book extremely early. Most attendees from qualifying countries will be within a day’s drive from at least one stadium, which is quite different to comparable events where global audiences often need to fly into the host country.
These factors mean a much later booking pattern than for some of the other major sporting tournaments in the world.
We are likely to see a frenzy of last-minute bookings as plans finalise and tickets find their final owners, with the second half of May likely to be the peak booking period.
STRs could potentially be more aggressive in their pricing strategies. Even now, they are not increasing their prices and are, in fact, cutting rates to the tune of -6.7% between 5th February and 11th March 2024 in host cities.
Hotels should continue to be optimistic and hold the course. STR bookings often indicate emerging demand in the conventional accommodation sector and so the stronger booking curve in alternative accommodation should mean more bookings to come for hotels.
It appears hotels are holding back inventory, with the share of unavailable hotels in Leipzig hitting 87% on 21st June when the Netherlands play France for example.
In light of ticket sales and travel patterns, this seems like a reasonable strategy, but revenue and marketing managers will need to be attuned to when peak demand will emerge to maximise this.
Hoteliers should be highly targeted in their marketing as we can see that demand generation is tied directly to the match days and searches to the fanbases.
Our free-to-use Global Market Insight tool shows that the top locations where searches are being made from are linked to the upcoming matches.
For example: a large number of searches for flights and hotels are being made in the Ruhr Valley by Turkish visitors, where Türkiye is due to play two of their three group games; Italians and Spaniards are making a high proportion of flight searches in Essen in preparation for their game against each other on 20th June; the top flight search market for Cologne is Great Britain, as both Scotland and England will play there in the group stages.
Final thoughts
When it comes to events in your market, wherever you are based, the key is to keep a close eye on demand data and await the real-time changes.
To access these insights in full, check out Market Insight, which gives you real-time predictive demand insights so you can pinpoint peak moments of demand around local events and enact a pricing and promotional strategy that matches the market, captures more bookings and maximizes your room revenue.