A recent study conducted by CPP has revealed that Germany’s luxury market will grow by up to 20% in 2013, particularly the fashion, watches, jewellery sectors. As the the primary purpose of travelling to Germany is medical (treatments, surgeries etc), luxury retail and hospitality and indirect beneficiaries. Over 30% of the wealthy visitor to Germany come from the Middle East (UAE, Kuwait, Qatar, Oman and Bahrain).louis vuitton munchen

Governments in most of these countries subsidize costs for treatment abroad of its nationals, from flights to accommodation and the hospital bills. The most ”generous” is the government of U.A.E., its embassies making all necessary arrangements. According to our survey, the length of such a ”medical” trip for a Gulf patient is on average 10 days – in many cases, flight arrangements being business class and hotels five star. Each patient is allowed to be accompanied by a relative or friend and in the case of women, by two such close people.

In Europe, Germany ranks as first choice, given the quality of medical services, especially for cardiology, ophtamology and cancer. Munich ranks first, followed by Hamburg and Dusseldorf (Essen).

In luxury hotels in Munich, these medical travellers now make up to a third of all guests, hence, personalized services such as literature in Arabic and Arabic cuisine menus in restaurants and in-room dining. This explains the high occupancy at luxury hotels in Munich, Hamburg and Dusseldorf in off-season as well as the high rates, despite a steep decline in corporate travel. Travel to Germany by Gulf nationals has also been helped by direct flight connections – Emirates fly non-stop from Dubai to Munich, Berlin and Hamburg while Qatar Airways flies from Munich and Hamburg, non stop to Doha. Lufthansa is also flying direct to several Gulf destinations. Etihad flies non-stop from Abu Dhabi to Frankfurt and Munich, and through its partnership with Air Berlin, to over 20 cities in Germany.

Russians and nationals from Eastern European countries are also incresingly travelling to Germany for medical reasons, however, unlike Gulf nationals, their expenses are covered by either private insurance or personal income. There are direct flights between many cities in Germany to Moscow and Sankt Petersburg. There has also been an increase from CIS states such as Kazakhstan and Azerbaijan, most of them for medical reasons too.

As for Asian travellers, most of them from China and South Korea, arrive in Germany mostly for leisure and they favour mainly Berlin, Munich and Frankfurt. The lower prices of most luxury branded goods, in many cases 20% cheaper than in China, have been the major incentive for Chinese to travel to Germany. By comparison to Paris or London, flights between China and Germany are cheaper due to an oversupply. On average an return economy class flight ticket from Beijing to Frankfurt is 30 to 40% cheaper than an economy return from Paris to Beijing.

Asian travellers also prefer German luxury shopping destinations such as Munich, Berlin and Frankfurt given that luxury hotel rates are up to 30% cheaper than those in Paris or Milan.

Major luxury brands such as Prada and Vuitton have grasped on the potential of foreign travellers and have placed Germany at the top of their expansion plans in Europe. They are also tackling an important shortcoming of Munich or Berlin, which have smaller stores than in Paris, London or Milan (hence a reduced variety of their collections), by enlarging existing stores or opening new, larger store.

In Munich, Prada is enlarging its existing flagship store by 30% (adding a adjacent building), while Louis Vuitton is opening an impressive Louis Vuitton Maison store at the prestigious Palais an der Oper on Residenzstrasse, covering 600 sqm – both stores due to open this Summer.

Leading jewellery and watches retailer Bucherer is opening in Munich its second flagship store in Munich near the new Vuitton Maison this Summer. Max Mara is also scheduled to open its new flagship store in Munich on Theatinerstrass this summer. The new developments in Munich come after the recent openings, at the end of 2012, of several new stores: Tom Ford, Belstaff, Michael Kors and Saint Laurent.

In Germany, Prada operates 6 mono-brand stores and 2 shop in shops; Louis Vuitton operates 8 stores; Gucci 7 mono-brand stores and 4 corners; Cartier operates 5 mono-brand boutiques,  Ermenegildo Zegna 4 mono-brand stores and 4 corners; Burberry 4 mono-brand stores; Tiffany 4 mono-brand boutiques. Many of the luxury fashion and accessories brands blame the lack of infrastructure (few luxury department stores) and high leases for the slow retail development in Germany.

As for watches, most of the major luxury brands are represented through wholesale, the most important retailers being Wempe (15 stores in Germany) and Bucherer. Rolex (through local partners), Blancpain and Omega are among the brands with a large representation of mono-brand boutiques in Germany.

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