Expansion despite rapid decline in sales.
(Photo: Jan Huebner)
Dusseldorf Germany’s largest accommodation provider, the Munich budget hotel chain Motel One, is suffering from the corona crisis much more than the competition. This emerges from the figures presented by Co-CEO Daniel Müller on Tuesday. The 43-year-old took over the management of the company from his 68-year-old father last year.
According to company information, sales in 2021 fell by 58 percent compared to the pre-Corona year 2019. Although the chain has since increased the number of its stores from 74 to 80, it only managed to collect revenues of 238 million euros last year.
Motel One is thus losing market share. The German accommodation industry is more stable compared to the chain: the overall minus for the year was 44.9 percent, as determined by the Dehoga hotel association. Including gastronomy, there has even been a noticeably lower decline of 40.3 percent in Germany since 2019 compared to Motel One.
From the point of view of hotel industry experts, there is an understandable reason for the weakness of the German market leader. “Motel One operates its hotels mostly in cities that international business travelers avoided during the pandemic,” reports Roland Schwecke, head of the consulting firm Dicon, which specializes in budget hotels. The boom in vacationers, who increasingly traveled in their own country in 2020 and 2021, largely bypassed the market leader. “Competitor B&B has done better recently,” reports Schwecke, “because it owns more houses in rural areas.”
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In the second year of Corona, the situation for Motel One hardly improved. The chain, founded in 2000 by Munich hotelier Dieter Müller, achieved an average room occupancy of just 30 percent in 2021, just two percentage points higher than the previous year. According to the company, it only earns money from a quota of 50 to 60 percent.
Thanks to state aid of 97 million euros alone – after four million euros the year before – Motel One was in the black before taxes in 2021. A net loss of 7.6 million euros remained. The minus to be absorbed in the previous year had amounted to 77.3 million euros.
Motel One remains on course for expansion
The hotel chain, in which the family of SAP founder Dietmar Hopp also has a stake, continues to expand. After new openings last year in Cologne, Hamburg, Stuttgart, Nuremberg and Copenhagen, a further ten locations are to be added in 2022. They have already opened in Manchester and Aachen, and the start is imminent in Graz, Dublin and Ulm.
In summer, Motel One also ventures out of Europe for the first time. A 28-storey building has just been moved into in the Downtown Financial District of New York. Daniel Müller reports that 325 rooms will be available in the future. As can be seen from the current contracts, an end to the expansion is not yet in sight. 27 other hotel projects have now been secured, making it likely to be 107 houses in total. for now.
“Many projects had been planned for a long time and could not be stopped,” says Moritz Dietl, Managing Director of Hotelberatung Treugast. He fears that there will still be problems at trade fair locations in particular in the near future: “Motel One has to have staying power here, if only to avoid losing further market share.”
Financially strong opponents have long been preparing for a counterattack. The British hostel group Whitbread has just taken out two bonds for a total of 625 million euros on the capital market in order to promote the expansion of the group’s own hotel brand “Premier Inn”. The chain, which advertises guests in the same segment as Motel One, already operates 23 hotels across Germany after the group collected 1.13 billion euros through a capital increase two years ago. There should be 69 houses in this country in the medium term – a clear declaration of war.
And the outlook for Motel One remains tense. “We expect another loss in the first quarter of 2022,” says CEO Müller, “but then with a noticeable recovery from May.” STR Global.
In addition, Motel One is currently unable to foresee what effects the Ukraine war will have on the hotel group. At least there is one consolation for Müller: “The price increases in recent months have been accepted by our guests.”
More: The guests are running away from the hotels because of Corona – why the industry is threatened with a split