Hotel prices in the German capital of Berlin are the lowest compared with other hotels across Europe.

The city is expected to record 20 million hotel guests by the end of the year, while the number of hotel beds will soon exceed 112,000 in 700 locations.

The city, however, has a severe shortage of five-star hotels and expects more investment to be made in the luxury hotel market, according to DPA.

This year, the 563-room Hotel Scandic at the central Potsdamer Platz and the NH-Group’s 300-room hotel in the Friedrichschain district will open.

The Holiday Inn group will open a luxury hotel at Alexanderplatz while a branch of the Waldorf Astoria is to open close to the Zoologischer Garten in 2011.