Experiential Luxury in Germany

2021 DEVELOPMENTS

Experiential luxury claws back some sales after a dismal 2020

With sales coming mostly from luxury hotels, 2020 was a very difficult year for experiential luxury, due to the huge drop in inbound travellers to Germany. As vaccination programmes got underway, there was a degree of return of inbound tourists, as well as business trips resuming to a certain extent for a few months in 2021, which allowed experiential luxury to record strong current value growth from the rock-bottom situation of 2020.

Travco with its Steigenberger hotel chain maintains its lead

Steigenberger is the most prominent luxury hotel chain in Germany, and while its sales experienced a huge decline in 2020, alongside those of many of its competitors, due to the huge drop in inbound tourists, particularly from outside the Schengen area, it remained at the top of the otherwise fragmented competition in experiential luxury. The gap from its closest rival, domestic brand Althoff Collection, narrowed in 2020; however, its third-biggest rival, Swiss luxury hotel chain Kempinski, suffered even bigger sales losses.

Double-blow for the lone flag-bearer of luxury foodservice, Armani

There is only one outlet within luxury foodservice in Germany, Emporio Armani Café, whose sales suffered from many factors during the first year of the pandemic. The huge drop in the number of inbound travellers, coupled with the compulsory closure of foodservice outlets for many months in 2020, resulted in its sales seeing a strong decline.

PROSPECTS AND OPPORTUNITIES

Recovery to pre-pandemic level expected to take time

On the one hand, a number of luxury goods categories were relatively pandemic-proof, as the main clientele was not as hard-hit financially during the pandemic. On the other hand, the consumers of experiential luxury in Germany are largely inbound travellers, and the strong travel restrictions in 2020, followed by still relatively strict travel requirements in 2021, meant that these consumers were unable to access the experiential luxury offering.

Spend per person likely to increase, at least in the short to mid-term

The pandemic has led many consumers, including those in experiential luxury, to reassess their priorities. On the whole, there is a resulting willingness to spend more on experiences, given the precarious times.

Dynamic future for Steigenberger hotels

The leading brand in experiential luxury in Germany, the Steigenberger hotel chain, suffered greatly during the pandemic. As the hotels industry – including luxury hotels – goes through a recovery phase in the next few years, a number of changes have been announced for Steigenberger, with a new leadership team, including a new CEO for the German operations, appointed in March 2022.