Dusseldorf Since last summer, the Düsseldorf hotel investor Jörg Lindner has it in black and white: The information from his real estate and operating company 12.18. Hospitality management resorts are the most expensive in Germany. In the middle of the Corona year 2020, the specialist journal AGHZ calculated, the average overnight rates in Lindner’s empire rose from 147 to 182 euros.
The stay in Lindner’s hotel “Stadt Hamburg” on Sylt alone, which played a central role in the resignation of Federal President Christian Wulff ten years ago because he allegedly had four nights sponsored, became 25 euros more expensive during the pandemic. An overnight stay costs just under 300 euros.
Those who stayed in the “7 Pines” holiday complex on Ibiza paid an average of 550 euros per night in 2021. In 2019 you could have stayed there for 450 euros. At Fleesensee Castle on the Müritz, where 12.18. organized the operation, prices have gone up by a quarter since 2019.
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The boom in demand for high-quality holiday resorts sparked during the pandemic has excited the hotel industry in general – and the Düsseldorf developer 12.18. in particular. “Corona has demonstrated the crisis resilience of tourism properties,” says its managing partner Jörg Linder.
He made it clear to the Handelsblatt that it differs significantly from the city hotel industry, which to this day lacks business travellers, conference and trade fair visitors. In fact, even the lifestyle chain “25hours” had to accept a price drop from 139 to 106 euros per night in the pandemic year 2020 – the price reductions for other city hotel chains were even higher.
The 63-year-old, who, like each of his four brothers, holds a 20 percent stake in the Düsseldorf hotel chain Lindner as a part-time job, turned this fact into hard cash a few weeks ago: three holiday resorts – a hotel castle in Roxburghe, Scotland, acquired in 2018, another also in 2018 acquired resort on Sardinia and a luxury holiday complex on Ibiza bought by Rewe in 2015 – sold 12.18. to a Luxembourg fund from Engel & Völkers Asset Management – with Lindner’s company remaining in office as operator. The proceeds: 280 million euros.
Dorint also relies on luxury holidays
The business with the luxury resorts is currently not only attractive for Lindner: The hotel chain Dorint, despite the Corona-related business slump, is currently investing heavily in the top class of the holiday hotel industry. Before Christmas, the Cologne company took over the operation of the Kitzbühel luxury resort “Grand Tirolia”, which a company owned by the Russian oligarch Yelena Baturina had massively run down in previous years.
“Since the beginning of the corona crisis, European domestic tourism has developed much more strongly than before,” said Dorint Managing Director Jörg T. Böckeler, explaining the commitment in the Alps. The five-star superior facility including golf course is now to be expanded from 81 to 175 rooms, and further opportunities are being sought in Austria and Switzerland.
280 million euros in revenue from hotel sales
Successes in the tourism business have partially compensated for the sluggish bookings from business travelers, confirmed Dorint supervisory board chairman Dirk Iserlohe to the Handelsblatt in autumn. Dorint locations on Rügen, Usedom or the Sylt “Söl’Ring Hof” experienced an unexpected rush. “Even houses like in Arnsberg in the Sauerland, in Bitburg or Dresden, which up until now have mainly been used by business customers, are full,” he marvels.
The financially troubled travel group Tui is therefore hoping to be able to turn the increased willingness to pay for high-priced holiday hotels into liquidity and additional income. Together with Hansainvest, the Hanoverians launched a 500 million euro fund in Luxembourg a few days ago, which will continue to acquire hotels operated by Tui. A spokesman reports that a large German pension fund has already made a “significant” capital commitment.
The fund is designed for growth and is primarily planning investments in new hotel complexes, according to Tui. These are to be purchased or newly developed. “In isolated cases”, according to the travel group, the fund should also acquire hotel facilities from the current portfolio of the Tui Group.
Tui charges a fee for investment advice
In any case, the objects are to be operated under the group’s own hotel brands such as “Tui Blue” or “Robinson”. In addition, Tui receives ongoing remuneration for the operation of the hotel facilities and also for the investment advice of the fund.
Lindner has also been maintaining a similar model for a short time. After the corona death of his 52-year-old partner Kai Richter, the pension fund Zahnärztekammer Berlin (VZB) recently took a 50 percent stake.
Together with the asset manager Engel & Völkers Asset Management, the Düsseldorf hotel developer initiated a EUR 500 million investment fund that is to take over part of its hotel properties.
The first three systems sold should only be the beginning, with the initial investments coming from the VZB coffers. Further institutional investors in Germany and abroad are now to be approached. Lindner explains the unusual left-pocket-right-pocket deal that the solution helps the dental supply company to spread the risk. Like other institutional investors, the VZB invests its funds in direct and indirect real estate investments in order to spread the risk.
Expansion on top plots
Around 20 more luxury resorts want 12.18. Acquire Hospitality Management to rebuild and modernize for resale. “We have hotel properties in the pipeline in Germany, in the Alps, in the Benelux countries and on the Mediterranean,” says Lindner of further expansion.
It should always be about “non-reproducible” locations, he explains, i.e. resorts on top properties that would no longer be approved at this point today. “We are not sealing any additional areas, but we are ensuring better energy efficiency,” promises the entrepreneur.
For financiers of his company – usually also pension funds and pension schemes – this also has a significant advantage. “Unlike a new hotel building,” says Lindner, “a conversion usually only takes three to twelve months.” Investors therefore do not have to wait years for repayments. At the same time, the 12.18 managing director promises a return of between 4.5 and ten percent.
The Berlin consulting company MRP Consult certifies that the hotel developers have stable prospects. “While business-oriented city hotels, airport and congress hotels were particularly badly affected by Covid-19,” explains Managing Partner Martin Schaffer in retrospect, “leisure and holiday hotels were able to maintain their performance of previous years and in some cases even surpass it.”
At the same time, the resort and holiday hotel industry – especially in comparison to inner-city hotel chains – is dominated by owner-managed businesses, and the investor landscape is “less pronounced”.
Jörg Lindner hopes that this will result in a high willingness to sell. “Many don’t have the money to continue operating successfully,” he says.
More: Thanks to the rush of tourists: the Dorint hotel chain is back to pre-crisis levels.