Basically there was a bigger club scene in Hamburg than most other European cities, and so relatively small bands could make a good living there - or at least a much better living than they could anywhere else.
Paul McCartney briefly touched on this in a letter home to his Dad and brother, where, amongst describing the difficult living situations of the Beatles at the time and making it pretty clear he doesn't want to be there any more, he bemoans the fact that they might have to stay there indefinitely because the money is so much better than at home.
Here it is transcribed below:
Dear dad and Mike,
Well, it’s not going too badly but one disadvantage is that we never get up in time to buy things like writing paper etc!! (as you can see) We can play pretty long hours but if we ever feel like going out we can do so, because the majority of places stay open till about 7 or 8 in the morning.
I bought a cheap watch at a weekly market they have here. It’s quite good + keeps good time (costs about 22p).
Because we get up so late in the day, we don’t have much time to write. That’s why I’m writing now at 10.30 before I go to sleep.
For Mike: Tony Sheridan who was on Oh Boy! + the Empire is in Hamburg + we’re quite good friends. He played with us the other night for a guest spot. The club’s big but the microphone at the place where Sheridan used to play (The Top Ten) is fabulous + ours is pretty useless.
I’m getting pretty homesick + even more so now because recently we’ve heard that we may be kept on! + may be in Germany for years! We really can’t refuse if they give us the chance because the money is much better than at home.
Everything’s mad here. People never sleep. The food’s nutty and just like English food gone wrong. Potatoes with salad cream/creme, cold tomatoes, lettuce + that grand luxury dish - ‘pottes frites’ or something, i. e. chips. Sausages are miles long and are made with fish + meat. Ugh! Ah well, we can buy cornflakes, beefsteak, liver, mashed potatoes, onions etc at the local cafe now, so we’re eating well. We can get a glass of milk for 13 Pfennigs, i.e. 2 1/2d so that’s cheap enough. Anyway I’d rather be home.
Don’t be frightened to write. I won’t be annoyed if you do.
Love + Aufwiedersehen!
Paul