Because these tourists are mostly younger and don't or won't invest into luxury hotel experiences. They want to visit/experience the city, the "modern" buzz, nightlife, culture etc which doesn't incl. "high capital expenditure per night" in luxury hotels. They might look for boutique properties with interesting design/architecture/lifestyle offerings, but without the "high" cost. Das Stue sticks out a bit, it's high-end design-driven and beautiful and we saw plenty of young people there, especially in their bar, could be they haven't stayed but experienced "the buzz" instead of something different.

Overall, Berlin, Frankfurt etc same as with Germany as a whole aren't known to be very expensive in terms of hotels, but might offer a high standard, this depends however on the establishment itself IMHO.

I believe however that Berlin/Munich/Hamburg/Dusseldorf/Stuttgart etc could take "high-end" luxury as evidenced with Hotel de Rome, Mandarin Oriental, Fairmont Hotel Vier Jahreszeiten, Capella Breidenbacher Hof or the Althoff am Schlossgarten, these are all "high-end" properties in each respective city mentioned.

Plus, in regards of the tech scene, these are equally younger people who don't invest in high-end luxury, at least not for now while they're young and they might be even "against traditional luxury" only to experience something different, they might see this as something of a difference against their competitors aka "Look different, Feel different, It's different" etc. This is possible and why not.

Rosewood looks out in Germany for opportunities. [See Above]

Cheers & Safe Travels. ^