NHC QUARTERLY NORDIC HOTEL REPORT First Quarter Copenhagen Stockholm Oslo Performance data supplied by STR Global for the Copenhagen hotel market Performance data supplied by Benchmarking Alliance for the Stockholm and Oslo hotel market All amounts are in Danish Kroner (DKK) for the Copenhagen hotel market, in Swedish Kroner (SEK) for the Swedish hotel market and in Norwegian Kroner (NOK) for the Norwegian hotel market Nordic Hotel Consulting, Denmark Office: Kildehøjvej 27, Birkerød, Denmark www.nordichotelconsulting.com
Highlights The first quarter of 2012 was rather arduous for the Copenhagen and Oslo hotel markets as declines in RevPAR were monitored, with January being the most challenging month for Copenhagen and March, for Oslo. The Stockholm hotel market flourished during Q1 as a growth of 1.8% in RevPAR was recorded. Copenhagen saw the number of hotel projects rise with extensions being planned in the city. The hotel developments in Stockholm also saw their numbers increase. Hotel developments taking place in Oslo remained identical as the last quarter. Hotel Market Analysis The following section offers an overview of the hotel market performances of the three Scandinavian capitals. Copenhagen Stable ADR with fluctuating occupancy levels were recorded throughout the first three months of 2012 when compared to the first quarter of 2011, as shown with the graph below. Although the first quarter of 2012 saw an overall increase in ADR of 2.7%, it was offset by a decrease of 2.7% in occupancy, which resulted in an unaltered RevPAR from Q1 2011. ADR is the only key indicator that monitored increases, between 1.5% and 3.4%, during each month of the quarter, whereas occupancy and RevPAR followed a similar pattern and recorded decreases in both January and February, but upturns in March. The weakest month was February with steep decreases of 6% in occupancy and 4.6% in RevPAR. The February results were somewhat surprising as Copenhagen Fashion Week took place on February 1 st - 5 th 2012 and attracted approximately 40,000 visitors, of which 40% was international visitors. 2
The following table offers an overview of the hotel market performance in Copenhagen during Q1. Stockholm The trend for Stockholm for is translated by increased occupancy, ADR and RevPAR throughout the quarter, which is illustrated with the subsequent table. As an overall performance, the Stockholm hotel market performed rather well during the first quarter of 2012, mainly on account of the month of March, with increases in all key indicators, i.e. 0.3%, 1.5% and 1.8% in occupancy, ADR and RevPAR respectively. Both the months of January and February experienced declines in RevPAR, which is mostly translated by a weaker occupancy than Q1 2011, but even the ADR dropped in February. Nonetheless, in March, all indicators performed above the 2011 results with a solid 6.9% growth in RevPAR. The table below provides an overview of the hotel market performance in Stockholm during Q1.. 3
Oslo Although ADR levels remained about the same throughout the first quarter, occupancy did not follow the same curve as the other two Scandinavian capitals as the occupancy in March stalled at the same level as the occupancy in February, which is demonstrated with the following graph. The first quarter of 2012 proved to be rather challenging for Oslo as the following declines were recorded: 4.4% in occupancy, 4% in ADR and 8% in RevPAR as an overall performance. An explanation behind the drop in occupancy can be explained by the fact that the supply saw an increase in its capacity. Even though January showed positive results with growth in all key indicators resulting in a 3.8% increase in RevPAR, February and March experienced strong declines, especially during the latter month with a 19.3% dip in RevPAR. Those drops can be justified by the fact that Oslo hosted the FIS Nordic World Ski Championship in February 2011, which boosted occupancy and ADR. The 2012 first quarter s results reflect a more stabilized year and even the VM Snowboard that took place in early February was not able to match the results of the previous year. The table below proposes a snapshot of the hotel market performance in Oslo during Q1. 4
New Developments Copenhagen There are currently four projects under development in Copenhagen, which would result in a 1,154- room increase in capacity. The 450- room extension at Radisson Blu Scandinavia is nevertheless still pending as the permit for the extension is yet to be approved. The table below thus shows the entry of new supply. There are also rumoured hotel projects, including the following: Ø Innside Sol Melia, 177 rooms, possible opening year in 2013 Ø Hotel next to Copenhagen Airport, number of rooms and opening year to be determined The 470- room renovation taking place at Radisson Blu Scandinavia is still on- going. The project is inspired by spring and autumn designs, which will be completed by December 2012. Scandic Copenhagen is also undertaking major refurbishments, which will be completed in June 2012. Stockholm In the next three years, Stockholm will see its supply increasing by 2, 500 rooms, as there are currently eleven different hotel projects in the works. The table below showcases the expected new hotel developments in Stockholm. 5
Adding to the listed development projects are numerous smaller additions and new- builds. There are also rumoured projects, which are part of large property developments, and will include the following hotels: Ø Hågelbyparken in Botkyrka, number of rooms and opening year to be determined Ø Huddinge Resort, number of rooms and opening year to be determined Other hotel projects discussed for 2015 forward are still in the pipeline or planning process. All together, the Stockholm hotel market has quite a large pipeline of non- confirmed projects, which can be expected with the strong growth of travel and tourism in the region. Oslo In the next two years, Oslo will see an increase in its hotel capacity by 798 rooms spread over five hotel properties. The Comfort Hotel Grand Central has a plan opening for April 2012. In addition to a 57- room extension, The Thief will also expand its conference facilities. 6
About NHC Nordic Hotel Consulting is the leading hotel consultancy in the Nordics and has offices in Copenhagen, Århus, Oslo and Stockholm. In order to satisfy an increasing demand, an investment advisory division was created in 2012 and in 2011, the NHC Asset Management division was also established. The NHC Group thus encompasses Consulting, Investment Advisory and Asset Management. NHC has since 2004 carried out a range of assignments including feasibility studies, appraisals, operator search, contract negotiations, investment- and transaction advisory and more in the Nordics and Europe. For additional information on NHC, please refer to our website: www.nordichotelconsulting.com. Copyright This report is the property of NHC and may not be reproduced in parts or whole prior to the written consent of NHC. Disclaimer NHC does not guarantee the accuracy of the data presented in this report and cannot be held liable here for any analysis, opinions or decisions derived from reading this report as it is solely at the responsibility of the reader to draw up conclusions. NHC cannot be held liable for any outcome of analysis, opinions and decisions formed based on the information presented in this report. Contact Karine Bourget Hotel & Leisure Consultant Nordic Hotel Consulting Mobile: +45 28 56 52 96 kb@nordichotelconsulting.com www.nordichotelconsulting.com NHC Offices Denmark Kildehøjvej 27 3460 Birkerød Denmark +45 45 82 11 70 Norway Skolevejen 2 N 1400 Ski Norway +47 908 83 686 Sweden Sveavägen 17, 14 th floor S 111-57 Stockholm Sweden +46 733 502 444 www.nordichotelconsulting.com It is now possible to subscribe to our newsletter via our website. 7