TABLE OF CONTENTS. Norwegian Hotel Industry Overview Pg. 2

Transcription

1 Norwegian Hotel Industry Hotelia s mid-year report 2015

2 TABLE OF CONTENTS 1. Introduction 4 2. Hotel Industry Performance in the Major Cities.. 5 Norway Oslo Bergen Trondheim Gardermoen (Ullensaker) Stavanger Tromsø Kristiansand 3. Norwegian Hotel Industry in General Colliers International Mid-year Real Estate Report Highlights from 2015 & Norwegian Hotel Industry Overview Pg. 2

3 WHO ARE WE? Advisory services and business development for hotels, hotel property owners and the travel industry Behind Hotelia stands a team of experienced consultants with a long track record from hotel real estate and operations Services provided by Hotelia include feasibility studies, hotel market research reports, transactions, valuations, operator searches and general advisory services to hotel and travel industry clients We are specialized in the Nordic region, and base our advices on a wide experience and extensive network from this region

4 INTRODUCTION Hotelia releases a brief market report about the Norwegian hotel industry twice a year, and is drafted during the two months prior to publication. The majority of data are collected from Statistics Norway (SSB) and Statistikknett. Hotelia have supplied additional data as well. The main focus of this report is: Development in the Norwegian hotel industry up to, and including, mid-year 2015 for Norway and the seven largest cities (based on sold room nights) Updated overview of the largest hotel chains in Norway, based on number of rooms and hotels Important events and highlights in the Norwegian hotel industry and real estate market, as well as highlights from the Swedish market that is of interest for Norwegian investors A quote from Colliers International s mid-year report for the Norwegian real estate market, with link to the entire report Some reflections of the industry s outlook in the coming year The next report is scheduled in February Please do not hesitate to contact us for further information, comments or suggestions. Hotelia AS has conscientiously prepared this report based on our own analyses and the information made available to us or collected during the process of executing the assignment. Hotelia AS can therefore not guarantee for the accurateness or trueness of all the information and estimates carried out in this report. Norwegian Hotel Industry Overview Pg. 4

5 HOTEL PERFORMANCE IN THE MAJOR CITIES

6 Statistikk for Oslo NORWAY Guest segments development mid-year 2014 vs A slightly higher increase in demand than in room capacity, and a moderate growth in ADR contributes to a 1.8% growth in RevPAR this mid-year compared to first half-year There are primarily a strong growth in the leisure segment. The growth s main drivers are a combination of the currently depreciated NOK, improvements in selected countries economy that are important for the Norwegian tourist industry, and the popularity of northern lights (new winter market). USD: -21.9% EUR: -5.4% GBP: -15.6% -3.1 % 6.6 % 13.4 % Leisure Business Conference The business segment in total, including conference, decreased by 0.7% compared to first half-year Thus, the fall is so far relatively smaller compared to the fall in oil prices and the overall development in the Norwegian economy. In total, Norway has experienced an increase in both domestic and foreign travellers by 4.2% and 9.8% respectively compared to first half-year NOK Nom inel chg. Change % Leisure % Business % Conference % Room cap % Room nights % ADR % Occ% 51.4 % 51.6 % 0.1 % 0.3 % RevPAR % *First half-year 2014 vs. half-year Rolling 12 month RevPAR with %-change 4% 2% -2% % Development in key figures - Norway * ADR RevPAR Occ% Average Occ% Norwegian Hotel Industry Overview Pg. 6

7 NORWEGIAN HOTEL INDUSTRY OVERVIEW Oslo +9.1% Growth in RevPAR Astrup Fearnley Hotelia Pg. 7

8 Statistikk for Oslo OSLO Overall we see a weak trend change in RevPAR development. The demand side is at the moment slightly greater than the supply side. The strong development in June Is mainly dominated by the Nor-Shipping trade fair. This also affects the total figures for Oslo in the first half Oslo continues to grow business from the leisure market by 12.8 %. During the last ten years the number of guests from this segment has increased by 70 % Regardless of «Nor-Shipping», price development (ADR ) is positive so far There are no major projects coming into the market this year, and the pipeline of additional room capacity is low NOK Nom inel chg. Change % Leisure % Business % Conference % Room cap % Room nights % ADR % Occ% 66.2 % 66.9 % 0.7 % 1.1 % RevPAR % *First half-year 2014 vs. half-year Rolling 12 month RevPAR with %-change Development in key figures - Oslo * ADR RevPAR Occ% Average Occ% Yearly rolling 12 month RevPAR & room cap. RevPAR Room cap. 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 4% 2% -2% -4% Norwegian Hotel Industry Overview Pg. 8

9 NORWEGIAN HOTEL INDUSTRY OVERVIEW Bergen -12.9% Growth in RevPAR Bryggen Hotelia Pg. 9

10 Statistikk for Oslo BERGEN Bergen has experienced a major growth in room capacity and decline in business travellers. The leisure segment contributes heavily with a 14.4% increase in travellers. Nevertheless RevPAR is down by 12.9% (YOY). The five years positive trend in RevPAR has ended, mainly by the growth in room capacity (570 new rooms LY), and the decline in the oil industry provides less business travellers The leisure business is positively driven by low exchange rates for the NOK, and the increased capacity covers this new demand in high season Total demand has increased by 2.5%, and the leisure segment will most likely continue to grow in Bergen, as one of the most important international tourist city in Norway Average room rate (ADR) has declined and will most likely continue to fall due to more room capacity and less oil business. RevPAR is falling from a high level and Bergen is no longer number one in RevPAR in Norway There are no new hotels expected in the pipeline for the rest of 2015, but in 2017 approximately 850 new rooms are expected NOK Nom inel chg. Change % Leisure % Business % Conference % Room cap % Room nights % ADR % Occ% 69.8 % 63.0 % -6.8 % -9.7 % RevPAR % *First half-year 2014 vs. half-year Rolling 12 month RevPAR with %-change Development in key figures - Bergen * ADR RevPAR Occ% Average Occ% Yearly rolling 12 month RevPAR & room cap. RevPAR Room cap. 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 4% 2% -2% -4% Norwegian Hotel Industry Overview Pg. 10

11 Trondheim -10.2% Growth in RevPAR

12 Statistikk for Oslo TRONDHEIM Rolling 12 month RevPAR with %-change Trondheim continues to experience more demand from conference as well as the leisure segment. Additional room capacity continues to grow in Trondheim, including the shortfall in business travellers causes RevPAR to fall by 10.2%. The increase in room capacity started in 2010 and continues to grow by 11.5% in Increase in demand is not making up for the additional rooms. RevPAR trend since 2011 is falling heavily from 553,- in 2011 to 475,- in 2015 (-14.1%) There is no new projects expected into the market in 2015/ Development in key figures - Trondheim 4% 2% -2% -4% NOK Nom inel chg. Change % Leisure % Business % Conference % Room cap % Room nights % ADR % Occ% 60.6 % 55.8 % -4.8 % -7.9 % RevPAR % *First half-year 2014 vs. half-year * ADR RevPAR Occ% Average Occ% Yearly rolling 12 month RevPAR & room cap. RevPAR Room cap. 08/09 09/10 10/11 11/12 12/13 13/14 14/ Norwegian Hotel Industry Overview Pg. 12

13 Gardermoen +12.2% Growth in RevPAR New Terminal

14 Statistikk for Oslo GARDERMOEN (MUNICIPALITY: ULLENSAKER) Rolling 12 month RevPAR with %-change The majority of the huge expansion of new capacity, launched in , is now absorbed by the increased demand. This is driven by both ADR and occupancy rate. Gardermoen continues to grow their business and achieved the highest increase in RevPAR compared to the 7 largest hotel destinations in Norway We assume that the increase in the conference segment comes from the newly opened «The Cube» at Clarion Hotel in august Thon Hotels has also newly opened a new congress hall close to their operations at Gardermoen There are no additional room capacity expected in the coming 2-3 years at Gardermoen Development in key figures - Gardermoen 4% 2% -2% -4% NOK Nom inel chg. Change % Leisure % Business % Conference % Room cap % Room nights % ADR % Occ% 57.0 % 59.9 % 2.9 % 5.2 % RevPAR % *First half-year 2014 vs. half-year * ADR RevPAR Occ% Average Occ% Yearly rolling 12 month RevPAR & room cap. RevPAR Room cap. 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/ Norwegian Hotel Industry Overview Pg. 14 -

15 Stavanger -28.1% Growth in RevPAR Vågen

16 Statistikk for Oslo STAVANGER Stavanger, The Oil Capital, is facing the most dramatic downturn of all the Norwegian cities. RevPAR down by 28.1%. The business segment is heavily hit by the oil price and the restricted travel policy in the oil industry. The city of Stavanger sold only 1.8% fewer room nights than LY, but the 25% additional new room capacity made the shift and lowered the occupancy rate by 14% points Average rate down by 8.7%, mainly due to lack of business travellers and lower paying business from the leisure and conference segments Downturn in the oil sector and the effect of more room capacity in the Stavanger region was partly covered in Stavanger city by visitors who previously stayed in hotels in the neighbouring cities of Sandnes, Forus and Sola Conference segment picking up slowly, but far behind the volume that Oslo, Bergen and Trondheim managed to sell There are still several hotels planned in the pipeline for 2016, approximately 485 several projects are put on hold new rooms, yet NOK Nom inel chg. Change % Leisure % Business % Conference % Room cap % Room nights % ADR % Occ% 66.0 % 52.0 % % % RevPAR % *First half-year 2014 vs. half-year Rolling 12 month RevPAR with %-change Development in key figures - Stavanger * ADR RevPAR Occ% Average Occ% Yearly rolling 12 month RevPAR & room cap. RevPAR Room cap. 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 5% 3% 1% -1% -3% -5% Norwegian Hotel Industry Overview Pg. 16

17 Tromsø -10.5% Growth in RevPAR Tromsø Bridge

18 Statistikk for Oslo TROMSØ Rolling 12 month RevPAR with %-change Tromsø has for years had a strong market growth, but in recent years the substantial increase in capacity has provided a drop in RevPAR. The city is now back at a level close to the level in 2010 when the positive development started. Still a solid increase of the leisure segment. Tromsø has experienced a growth of 250 % in leisure segment since 2007 mainly caused by the popularity of northern lights Since 2007 the room capacity has doubled Compared to the massive increase in capacity over the years, the prices (ADR) are only showing a minor drop in the same period Development in key figures - Tromsø 3% 2% 1% -1% -2% -3% -4% 10 8 New hotels in the pipeline, approximately 250 rooms in 2015/2016, plus some projects that are not yet confirmed NOK Nom inel chg. Change % Leisure % Business % Conference % Room cap % Room nights % ADR % Occ% 68.6 % 63.2 % -5.4 % -7.8 % RevPAR % *First half-year 2014 vs. half-year * ADR RevPAR Occ% Average Occ% Yearly rolling 12 month RevPAR & room cap. RevPAR Room cap. 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/ Norwegian Hotel Industry Overview Pg. 18

19 Kristiansand -5.6% Growth in RevPAR Bølgen Hall of Culture

20 Statistikk for Oslo KRISTIANSAND Rolling 12 month RevPAR with %-change Stable room capacity and increase in leisure segment saving Kristiansand from major downturn. The overall RevPAR trend is positive so far driven by ADR and leisure segment in the summer season Shortfall in the business segment is coming from the oil sector, which Kristiansand is heavily dependent on outside of summer season, and Kristiansand will most likely experience continued shortfall in the autumn % 2% -2% -4% Occupancy rate and RevPAR are at the low end and might over time hurt the overall profitability Development in key figures - Gardermoen There are most likely no new projects planned in 2015/ NOK Nom inel chg. Change % Leisure % Business % Conference % Room cap % Room nights % ADR % Occ% 54.3 % 50.1 % -4.3 % -7.9 % RevPAR % *First half-year 2014 vs. half-year * ADR RevPAR Occ% Average Occ% Yearly rolling 12 month RevPAR & room cap. RevPAR Room cap. 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/ Norwegian Hotel Industry Overview Pg. 20 -

21 NORWEGIAN HOTEL INDUSTRY IN GENERAL Number of rooms 3,000 9,000 15,000 In contrast to the popularity of management agreements in international hotel firms, Scandinavian hotel property owners favours rental agreements often with one of the major brands Scandic, Thon and Choice (consisting of Quality, Clarion, Clarion Collection and Comfort) dominates the industry The hotels are mostly based in the mid-market, however the major brands diversify across all three markets 21 Hotels 5, Rooms 10 Hotels 2,940 Rooms 35 Hotels 6,430 Rooms 26 Hotels 1, Rooms 6 Hotels 1,350 Rooms 19 Hotels 2,650 Rooms 25 Hotels 2, Rooms 8 Hotels 780 Rooms 15,000 9,000 3,000 Number of rooms Figure updated September 2015 Norwegian Hotel Industry Overview Pg. 21

22 COLLIERS PROPERTY BROKERAGE The Norwegian Commercial Real Estate market will see an all time high year in terms of transaction revenue. As of mid August, the total volume is already close to NOK 65 bn with the office and retail sector being responsible for over 2 / 3rds of the total. The interest in the Norwegian Commercial Real Estate market is very strong as Norwegian investors are as present as ever and international investors are looking for low risk assets for their investments. We firmly expect this development to continue throughout 2015 and we expect the transaction volume at years end to be approximately NOK 90 bn at a minimum. We would not be surprised if we see transactions for more than NOK 100 bn in However, for this to happen, certain key transactions have to go well. Looking at the domestic picture in Norway, the oil price is indeed of a high concern. The unemployment rate has increased in recent months and salary growth is expected to be the lowest in 20 years. Norway is one of the few western countries with quite strong inflation numbers at present with a yearly rate close to 2.5 %. It is expected that the international and domestic appetite for Norwegian Commercial Real Estate will continue going forward. This is however, uncertain times with drastic changes in international financial markets currently happening each week. With record low interest levels and a very strong financial backbone, we are hopeful going forward, especially for the transaction market. The international macro economic climate remains very unstable. The oil price has as of August 24th seen levels as low as $ 43 per barrel and stock exchanges around the world in general, and China especially, is seeing significant declines. China has been extremely volatile for a prolonged period of time, however, we might begin to see that larger parts of the rest of the world is now increasingly following suit. Entire report available here. Source: Colliers International Norway Norwegian Hotel Industry Overview Pg. 22

23 SOME HIGHLIGHTS FROM LAST 12 MONTHS KLP Eiendom Acquired a Scandic hotel currently under construction in Copenhagen with 370 rooms Balder Acquired a Pandox Hotel portfolio in Sweden, with 2,430 rooms in total for 2,200 MSEK Merkantilbygg Acquired Park Inn by Radisson (208 rooms) Stavanger from KLP Eiendom Balder Acquired Courtyard by Mariot (280 rooms) in Stockholm from Invesco European Hotel Real Estate for 670 MSEK Oslo Pensjonsforsikring Acquired 58,000 m2 at Ullevål Stadion, including Thon Hotel Ullevaal Stadion (144 rooms) from DNB Næringseiendom DNB Scandinavian Property Fund Acquired Quality Expo (301 rooms) for 530 MNOK, which gave a yield on 5.2% Geir Hove with partners Acquired Scandic Stavanger City Hotel (226 rooms) from Øgreid Eiendom for 350 MNOK Other highlights Scandic have acquired the operations of three hotels located in Bergen from Bergen Hotel Group (630 rooms) Choice have launched a partner concept for its unbranded concept Pandox are undergoing large changes gone public on Stockholm Stock Exchange Two hotels in Oslo rebranded to HTL (owned by Scandic) Ligula Hospitality Group acquired Norse Hospitality from Svea Fastigheter / Midstar Accor Hotel Group canceled 13 contracts with Norse Hospitality the affected hotels have been rebranded to Good Morning Hotels Norwegian Hotel Industry Overview Pg. 23

24 OUTLOOK FOR THE REST OF 2015 AND 2016 The hotel industry is a cyclical business. Falling oil prices, rising unemployment and a general uncertainty contributes to a reduction in travel activity in the private sector. The decline is already apparent in the major cities of Bergen, Stavanger and Trondheim, as we can see in this report. We expect that these cities will probably be hit even harder in the autumn and winter. Oslo will probably be affected less by the decline, while hotels in the outskirt of the largest cities will be hit even harder. Foreign investors still considers real estate investments in Norway as attractive, low exchange rate and stability in the country is valuable The summer season 2015 will be historical good Further capacity growth in Stavanger and Bergen might cause a continued fall Low exchange rate will create further growth in the foreign leisure business The big chains will probably start and continue to clean up in their portfolios of hotels in their own operations. For landlords outside the main cities and region centers can cause that they have to find new tenants. This will probably strengthen the position of the multi brand companies. Norwegian Hotel Industry Overview Pg. 24

25 Hotelia monitors the hotel industry in Norway and the Nordics carefully in order to ensure that our clients are updated with relevant market information. In spite of the fact that there have been a record summer in Norwegian tourism industry, we see many challenges for the industry going forward. During this summer we in Hotelia have develop new and improved existing products and are ready for a new and exciting fall. Our team Anders Vatne, Geir Lundkvist, Commercial Estate Lawyer Chistoffer Aasebø and market analyst Christian Hagen are ready to assist you. Anders Vatne Partner [email protected] Geir Lundkvist Partner [email protected] Please do not hesitate to contact us by phone For more information, please visit our website

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