As the tourist inflow into West Berlin continues to register a steady increase, the hospitality industry is involved in an intense battle between registered hotels and unregulated apartments.
With the German capital having become the third most-visited city in Europe, the hotel industry is unhappy about the intense competition from unregulated apartments. West Berlin has for a long time been a favourite haunt of budget-savvy tourist groups. Cheap accommodation and services are much sought after and the industry has responded to cater to this segment. Unregulated vacation apartments are not subject to the expensive safety and standards regulations that hotels have to follow, so they can charge less.
According to available figures, about five million visitors to Berlin last year chose to stay in unregulated, privately rented vacation apartments in preference to registered hotels. The irony is that even though demand for regulated hotels has increased due to the increasing tourist numbers, hotel owners are not able to exploit the demand because of the intense competition from budget services. While small variations in prices often lead to loss of business for registered hotels, investment in the development of vacation-apartments has been increasing. Even though the city passed a law in 2012 to stem the tide, there have been no significant changes since.
For the average traveller, this is good news, because even though the number of hotels has increased in the region, average room prices have stagnated. An average hotel room in Berlin costs €87.13, a decrease of 4.03 percent from the average price in 2007. Compared to other parts of Europe, hotel rates in Berlin are low.
The hotel industry is now trying to hit back at the apartment owners, by providing services that only those owners had been offering to date. Realising that group activities were a strength of low-cost services, hotels have introduced community kitchens, group travel and social activities that aim to pool costs and help visitors to socialise.