Munich hotels grew total operating revenue 2.1% in YE August 2026, but gross operating profit fell 1.1% to €68.7 per available room as expenses climbed 3.9% — nearly double the pace of revenue growth. GOP margin contracted 1.1 percentage points to 35.0%.

The figures come from Cushman & Wakefield's Munich Market Spotlight for the 12 months ending August 2026. RevPAR slipped 0.4% to €146.7, as a 1.5% decline in ADR to €196.3 offset a 0.9-point occupancy gain to 74.7%.

Why is profit falling while revenue rises?

Total operating revenue rose €4.0 PAR to €196.1 PAR. Total operating expenses rose faster, up €4.8 PAR (+3.9%) to €127.4 PAR. Payroll was the biggest cost driver, with Germany's 8.4% statutory minimum wage increase implemented in January 2026 compounding broader wage inflation and staffing pressures.

The departmental breakdown shows the squeeze at every line:

• Payroll: +€3.2 PAR (+5.0%) to €67.3 PAR, led by F&B (+€1.0 PAR, +5.0%), Sales & Marketing (+€0.7 PAR, +13.1%) and A&G (+€0.6 PAR, +7.4%). Rooms payroll was broadly stable (+0.5%); I&T was the only decliner (-9.1%).
• Cost of Sales: €18.1 PAR (+4.4%), driven by F&B costs (+5.1%) and Rooms-related expenses (+3.3%).
• Other Expenses: €32.2 PAR (+4.1%), led by Rooms (+9.3%) and F&B (+4.8%), partly offset by cuts in OOD (-20.8%), I&T (-15.9%) and POM (-14.3%).
• Utilities: broadly stable at €7.7 PAR (+0.4%), as electricity fell 8.9% while water/sewer rose 15.2%.

Departmental expenses rose 4.0% to €80.7 PAR; undistributed expenses rose 3.8% to €46.7 PAR, increasing their share of revenue from 23.4% to 23.8%.

Where did revenue growth actually come from?

F&B carried the market. Revenue in the department rose €4.4 PAR (+11.5%), more than offsetting declines in Rooms revenue (-€0.6 PAR, -0.4%) and Miscellaneous Income (-€0.3 PAR, -9.3%). Other operated departments added €0.4 PAR (+8.3%). Notably, F&B revenue growth stayed ahead of the increase in F&B departmental expenses, which rose 5.0% — meaning the food and beverage engine, not rooms, protected operators' top line this period.

How much new supply entered the market?

Supply growth stayed limited at 0.6% on an opening-date-adjusted basis. Four new hotels opened in the 12 months ending August 2026, adding 467 rooms. The repositioning of the former Roomers as The Dean returned another 281 rooms, bringing total additions to 748 rooms.

Additions were highly concentrated: ibis Styles (358 rooms) and The Dean (281 rooms) accounted for 85.4% of identified supply. ibis Styles strengthened midscale inventory in the airport catchment, complementing the Terminal 1 Pier expansion completed in April 2026, which added capacity for up to six million passengers per year.

What's next for Munich?

The report attributes the soft trading performance to normalization against elevated H1 2025 comparables, when Munich benefited from Bauma and the UEFA Champions League Final. Underlying fundamentals remain healthy: occupancy grew, supply growth was minimal and demand continued to expand.

The near-term pipeline adds modest pressure. The 277-room AMANO in Ludwigsvorstadt-Isarvorstadt is the most significant imminent opening, with three further projects totaling 523 rooms targeted across Munich and the surrounding market over the following 12 to 18 months. That pipeline equates to a further 0.7% opening-date-adjusted supply increase — a manageable burden, provided payroll inflation and ADR softness do not continue to erode the 35.0% GOP margin.