Berlinale Move Online Exacerbating Berlin’s Economic Woes

Berlin has been wrought a shadow of its former bustling self by the ongoing pandemic, and while locals can still be seen on the streets, its once thriving nightlife, packed restaurants, crowded bars and 24-hour dance parties seem like a distant memory.

The Berlinale was one of the few major industry events that managed to take place last year before the COVID-19 crisis hit Europe in March. This year, it has followed other major A-list festivals online. The move is yet another blow to the city’s exhibition, hotel, restaurant, bar and club sectors, which have been devastated by the continuing situation.

“Our entire industry is in the worst crisis since World War II,” says Thomas Lengfelder, chief executive of the Berlin Hotel and Restaurant Assn. (DEHOGA Berlin). “Even today, there is still no telling where the pandemic will lead us. Unfortunately, political leaders are still not giving us any prospects.”

Berlin hotels have been particularly hard hit, with revenue per room in 2020 down nearly 64% compared to the previous year, according to Lengfelder. Between mid-March — at the start of the pandemic — and the end of December, that figure dropped to 77% compared with the same period in 2019; in January of this year it fell to 86%.

“The cancelation of the Berlinale is just another component of the catastrophe,” Lengfelder adds, noting that the hotels and restaurants around Potsdamer Platz have always been fully booked during the festival. Among those are main locations like the Grand Hyatt, the Ritz-Carlton, the Mandala and the Marriott.

“The Berlinale was part of the success story of Berlin and had a great impact that emanated out to the world, so the Berlinale was not only important for hotel and restaurant revenue, but also for promoting Berlin.

“In 2019 Berlin had around 34.5 million overnight stays, in 2020 it was only around 12 million,” he adds.

Restaurants have equally suffered. Berlin eateries saw annual revenue in 2020 fall 55% year on year, Lengfelder says.

At Ristorante Essenza, located at the main Berlinale site of Potsdamer Platz, the festival’s physical cancelation will result in a loss of around 10% of annual revenue, says Pasquale Sinaguglia, the establishment’s owner and head chef.

“Of course, we will miss the international guests and their event bookings,” he adds. “The Berlinale is a meeting place for the industry, where thousands of international guests come to Berlin every year, and Ristorante Essenza has been a meeting point for years to meet old friends and new contacts.”

Over the past year, Essenza has suffered a 68% loss in revenue compared with previous years, Sinaguglia notes.

Many restaurants in other parts of the city have remained opened during the lockdown offering takeaway, but with Potsdamer Platz largely deserted, businesses shuttered and offices in the area only 40% occupied due to increased home office work, Essenza has remained closed.

“Despite all the difficulties, we hope that things will start again soon in the gastronomy sector,” Sinaguglia adds.

The festival’s move online is also hurting local cinemas, which, along with theaters nationwide, saw revenue plummet 69% in 2020.

Berlinale and EFM films last year screened at some two dozen locations, including movie theaters, multiplexes and stage venues, most of them rented for the festival.

Christian Bräuer, chair of the AG Kino-Gilde independent cinema association and managing director of Berlin’s Yorck-Kino group, says the Berlinale plays an essential role in promoting arthouse films released later in the year, something that a virtual edition will have difficulty doing.

“When the Berlinale opens with films like ‘Hail, Caesar!’ or ‘The Grand Budapest Hotel,’ those are naturally the best films of the year for us.”

The Berlinale’s impact for cinemas goes far beyond the event itself, he adds. “Arthouse has a market share of more than 30% in Berlin — it’s more than just a niche and that also has to do with the Berlinale.”

The festival is “an inclusive event for the city that creates excitement to discover films,” says Bräuer. “The theatrical market in Berlin counts on that throughout the year. In Berlin, 80% of the population goes to the cinema; in the whole of Germany, it’s not even 40%.” The Berlinale is “a beacon” for film and for cinemas, Bräuer stresses.

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