Intense summer heat produces minimal relief for accommodation providers
The German accommodation industry, encompassing a wide range of facilities offering paid overnight stays, is currently facing significant challenges during the peak travel season of 2025.
According to a recent survey, nearly 58% of accommodation providers felt held back by weak demand, a marked increase from just under 40% a year ago. This trend is reflected in the industry's business climate index, which improved for the fifth consecutive month in June but remains pessimistic, with a reading of -15.3.
One of the key issues facing the industry is a labor shortage. While specific job cuts in German hotels were not detailed, global hospitality trends indicate that large hotel chains are reducing staff and relying more on AI and lower-cost overseas labor to cut expenses. This trend is further exacerbated by rising labor costs and increasing adoption of AI, which reshapes staffing needs but also creates workforce uncertainty.
Industry expert Caroline Vogel states that many sectors benefit from stable demand despite general consumer restraint, but the German accommodation industry is still struggling. Facing a lack of customers, a larger share of companies plans to cut jobs in the next three months, adding to the industry's woes.
The outlook for the summer season provides little cause for optimism. The start of 2025 had a somewhat bumpy impact on the industry, and its effects are still felt. To navigate this challenging landscape, accommodation providers are increasingly relying on data intelligence and benchmarking tools like STR and CoStar to optimize operations strategically and respond to market volatility.
Despite these challenges, the definition of the German accommodation industry remains broad, including a variety of establishments that offer overnight stays, such as youth hostels, campgrounds, vacation homes, and apartments. This diversity, while offering potential opportunities, also adds complexity to the industry's recovery efforts.
Sources: [1] Hotel Management, "Hyatt to cut thousands of jobs as part of cost-cutting measures," 2025. [2] Reuters, "Dow to close facilities, cut jobs in Germany," 2025. [3] Los Angeles Times, "Industry coalition seeks to overturn minimum wage increase in Los Angeles," 2025. [4] McKinsey & Company, "The Impact of AI on the Hospitality Sector," 2025. [5] Hotel News Now, "Accommodation providers turn to data intelligence to optimize operations," 2025.
Other sectors are thriving despite general economic restraint, but the finance and lifestyle sectors, including travel and business, are adversely affected due to the ongoing challenges faced by the German accommodation industry. The labor shortage within the industry is causing a ripple effect, leading to job cuts and the increased use of AI and overseas labor.
