Munich hotel gross operating profit (GOP) declined 1.1% to €68.7 per available room (PAR) in the year ending August 2026, even as revenue rose 2.1% to €196.1 PAR, according to Cushman & Wakefield data shared with Eurotables Report. Operating expenses climbed 3.9% to €127.4 PAR, compressing GOP margin by 1.1 percentage points to 35.0%.

What is driving the profit squeeze?

Costs outpaced revenue at nearly twice the speed. Departmental expenses rose 4.0% to €80.7 PAR, while undistributed expenses lifted 3.8% to €46.7 PAR, lifting their share of revenue from 23.4% to 23.8%.

Payroll emerged as the heaviest single line of cost growth, advancing €3.2 PAR (+5.0%) to €67.3 PAR. Food & Beverage payroll added €1.0 PAR, Sales & Marketing €0.7 PAR (+13.1%), and Administration & General €0.6 PAR (+7.4%). Rooms labour costs held nearly flat at +0.5%, while IT was the only department to cut labour (-9.1%).

Germany's 8.4% statutory minimum wage increase, implemented in January 2026, alongside broader wage inflation and ongoing staffing pressure, account for most of the increase. Cost of Sales rose 4.4% to €18.1 PAR. Other Expenses climbed 4.1% to €32.2 PAR. Utility costs held at €7.7 PAR (+0.4%), as lower electricity (-8.9%) offset higher water and sewer (+15.2%).

Why did RevPAR soften?

RevPAR fell 0.4% to €146.7. Occupancy edged up 0.9 percentage points to 74.7%, but average daily rate (ADR) declined 1.5% to €196.3, dragging the rooms line down 0.4% (-€0.6 PAR).

The fall reverses a strong comparable period. The prior 12 months benefited from Bauma, the construction equipment trade fair, and the UEFA Champions League Final held in Munich, both of which lifted pricing power.

Food & Beverage offset the rooms weakness, growing €4.4 PAR (+11.5%). Onsite restaurants, bars and events now carry Munich's top-line growth. Miscellaneous Income fell 9.3% (-€0.3 PAR).

How tight is the supply pipeline?

Four new hotels opened in the 12 months to August 2026, adding 467 rooms. The repositioning of the former Roomers property as The Dean returned another 281 rooms. Total additions reached 748 rooms, lifting opening-date-adjusted supply by 0.6% year-on-year.

ibis Styles (358 rooms, airport catchment) and The Dean together account for 85.4% of identified supply additions. The Midscale ibis Styles complements the Terminal 1 Pier expansion completed in April 2026, raising passenger capacity by up to six million passengers per year at Munich Airport.

The next 12 to 18 months bring further additions:

• AMANO hotel, 277 rooms, Ludwigsvorstadt-Isarvorstadt district
• Three additional projects, 523 rooms across Munich and surrounding markets
• Combined pipeline impact: +0.7% opening-date-adjusted supply growth

What happens next?

Operators enter the FY 2027 budget cycle with payrolls still working through the 8.4% January 2026 minimum wage step. Cost-of-sales trajectories through Q1 2027 and the delivery of the 277-room AMANO property will be the next data points investors track, alongside Terminal 1 Pier throughput as a leading indicator for airport catchment pricing power.