Hotel real estate market
Market sentiment and trends
In 2019, the number of overnight stays in the city of Hannover and the surrounding area reached a record level of 4.25 million. In subsequent years, Hannover was particularly hard hit by the pandemic restrictions as a trade fair location.
From 2020, this led to a drastic decline in the number of overnight stays, a slump in the provision of beds and further lows in room rates and revenue.
Stable recovery and positive prospects
A clear and sustained upward trend has been evident since 2022. The return of business travelers, trade fairs and events, the catching up of many private celebrations and the lifting of pandemic restrictions led to a noticeable increase in occupancy and bookings from mid-2022. This positive trend also continued in 2024: with around 4.03 million overnight stays, the four million mark was exceeded once again. While the city of Hanover recorded moderate growth, the surrounding area stagnated at a high level. There are signs of a stable, slightly positive trend for 2025, driven by several major concerts and leading trade fairs with high visitor numbers.
Average room rate recovers
The average room occupancy rate in Hanover was around 62.5% in 2024. The average room rate rose from 104.80 euros to 106 euros. As a result, the average revenue per available room (RevPAR) in Hannover also improved significantly in 2024 compared to 2023, rising by EUR 5.10 to EUR 66.
The major positive development: revenue per room (RevPar) tripled from the low of 2020 (just under €22) to 2024 (€66). All key performance indicators are almost back at the 2019 level, with room rates even slightly higher.
Bed supply is being expanded again
Supply capacity fell sharply during the coronavirus pandemic. However, in 2022, the number of hotel beds in the city of Hanover alone grew by around 1,230 compared to the previous year. In 2023, it rose by a further 210 and reached almost 10,600 beds in a total of 46 hotels in Hanover in 2024. In total, this is an increase of a good 1,600 beds compared to the lowest level during the pandemic in 2020.
In the Hannover Region, the number of beds on offer stagnated slightly, but is also around 590 beds above the 2020 low (around 5,800 beds in 2024).
Investment market picks up
While hotel transactions in Hannover were still at a low level in 2022 (EUR 37 million), the investment market came to a standstill in 2023 and the first half of 2024. However, more transactions in the hotel segment have been registered again since mid-2024. In 2024, the Accor Group sold four hotels in Hanover, Garbsen and Laatzen, some of which had already been reflagged under the new investors or operators (B&B Hotels, Aspire). In 2025, two further former Accor hotels were acquired by the Leonardo Group.
Market momentum, which had largely come to a standstill due to the coronavirus pandemic, is gradually picking up again. Market participants' expectations for prime yields in Hanover remain stable for the time being at 5.9% for 2025.
Outlook: Economic situation remains tense
After surviving the pandemic, the number of overnight stays is recovering - especially for tourist trips, a broader-based conference business with corresponding MICE events (Meetings, Incentives, Conventions and Exhibitions) and attractive major concerts. Nevertheless, the mood among the players is only cautiously optimistic. The major leading international trade fairs have not yet been able to return to their pre-2020 levels, the hotel industry is suffering from a shortage of skilled workers and rising operating costs, and geopolitical uncertainties are dampening some of the important demand from business travelers from abroad.
The market opportunities for new projects are therefore characterized by a high degree of uncertainty and require careful individual assessment. In addition, energy price increases, inflation, rising interest rates and the tense situation in the construction industry have led to delays in all ongoing projects.
However, the fundamental attractiveness of Hanover as a hotel location for the real estate industry is underlined by the projects completed, under construction and planned in the last five years. In the city of Hannover alone, ten new hotels with a total of around 1,600 rooms have opened since the beginning of 2020. International chains in particular are strengthening Hannover's position as a hotel location, bringing capital, marketing reach and modern infrastructure and realizing large hotels with generally more than 150 rooms (almost 300 beds). These are important in order to attract conferences and smaller congresses to the city or to provide appropriate bed capacity for large concerts.
Smaller hotels with regional roots are under strong competitive pressure from hotel chains. However, they can continue to be successful with intelligent strategies, regional identity, cooperation and clear positioning - especially if they offer unique concepts or personalized offers.