According to the latest city review by Christie + Co, using data provided by STR Global, Stockholm hotels recorded a 3.1% increase in RevPAR during 2008 compared to the previous year, despite a slight decline in occupancy. After a strong start to 2008, the Swedish capital felt the effects of the economic downturn during the latter part of the year. Preliminary figures for the month of January suggest that the downturn has continued, with RevPAR down by 16.9% on the previous year.
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Stockholm is the home of many multinational companies and Sweden’s stock market. It is the most visited city in Scandinavia, thanks to transportation links and numerous city events. Stockholm also offers a unique range of galleries and museums, and each year it hosts the world-renowned Nobel Prize awards ceremony.
Trends in Hotel Market Performance
According to data provided by STR Global, Stockholm hoteliers achieved an overall RevPAR increase of 3.1% in 2008 compared to the previous year.
Nutek, the Swedish Agency for Economic and Regional Growth, reports that the demand mix for hotels in Stockholm can be divided into 60% Business, 7% Conference, 9% Group and 25% Leisure. Peak hotel demand is recorded between May and November. Nutek’s research also highlights that hotel demand is primarily generated by midweek business travellers, especially in May and June, and by special events and conferences during the autumn season.
A progressive slowdown in performance can be noticed during the second half of 2008, as a result of new hotel supply in the city and the economic downturn. However, ARR growth remained strong, up 4.6% compared to 2007, resulting in a positive year-end RevPAR performance. The year-on-year variation in March and April is attributable to Easter holidays. In May 2008, Sweden took the Chair of the Committee of Ministers of the Council of Europe for six months, and as such Stockholm hosted additional conferences and events, notably in May and June.
Preliminary data for the month of January show a significant decline both in occupancy and ARR, causing an overall RevPAR decline of 16.9% compared to January 2008.
STR Global Trend Report - Stockholm 2009 Jan. vs. 2008 Jan. (SEK)
Note: The above table is based on STR Global’s daily data sample set as available on the 4th February for 72 Stockholm hotels. The variance in occupancy (*) is expressed in percentage points.
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Trends in Hotel Supply
The most significant change in the city’s hotel supply in recent years has been the continued expansion of the mid-market and upscale segments. During 2007, the Best Western Time Hotel (144 rooms), the Hotel Norrtull (129 rooms), the Connect Hotel Stockholm (85 rooms), and the Hotel Haga Kristineberg (90 rooms) opened. Stockholm's largest hotel, the 558-room Clarion Hotel Sign, situated in the heart of the city, adjacent to the Central Station, was unveiled during 2008. Within the boutique/design segment, the privately owned and operated Lydmar Hotel (46 rooms) saw daylight last autumn, next to the famous Grand Hotel, whilst the Hotel Stureplan (101 rooms) opened in two stages during 2008. The former Hotel Arcada also re-opened during 2008, as the 91-room Elite Hotel Arcada.
The hotel projects listed below are set to enter the market over the next four years.
Proposed Hotel Development - Stockholm
Source: Christie + Co Research and Analysis
||Operator / Brand
||Planned Opening Date
|Lilla Radmannens Bakficka
|Stay At Stockholm Lindhagen
|Courtyard by Marriott Kungsholmen
|Park-Inn Hammar by Sjostad
||Rezidor Hotel Group
|Park-Inn Stockholm Waterfront
||Rezidor Hotel Group
|Stay At Frihamnen
In addition to the above projects, a further 3,200 rooms are in the pipeline, although some of the schemes included in this forecast are reportedly on hold.
Trends in Hotel Transactions
There were a number of transactions completed in the city through 2007 and 2008. In June 2007, Norgani entered into an agreement with Scandic Hotels AB to acquire two hotels – the Scandic Hasselbacken (112 rooms) and the Scandic Alvik (325 rooms, built in 2003) - €76.3 million. Scandic Hotels signed a 15-year rental agreement for both properties. In the last quarter of 2007, a consortium including Jarl Asset Management, Niam and CarVal Investors sold the Park-Inn Stockholm Waterfront Hotel for €130.4 million to a Norwegian insurance company Vital. The hotel, currently under development, will open in autumn 2010 with 418 rooms and conference facilities for up to 3,000 delegates. The Courtyard by Marriott development in Stockholm, due to open by the end of 2009, was sold in early 2008 by Faktor Eiendom to Invesco as part of a sale-and-lease-back deal which also included the Radisson Hotel in Hamburg, Germany.
The economic environment, coupled with the planned increases in hotel supply are likely to put continued pressure on hotel trading performance going forward, notably for upscale hotels and properties in secondary locations. However, the Stockholm hotel market still offers opportunities for new and under-represented products, such as hotels attached to conference centres, limited service hotels, hotels part of mixed-use schemes and aparthotels.
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Notes to Editors
Christie + Co use desk-based research and experienced local industry specialists to produce bi-monthly city reviews. Hotel trading data is provided by STR Global.
Founded in 1935, Christie + Co is the leading firm of surveyors, valuers, consultants and agents specialising in the hospitality, leisure, retail and care sectors. Currently employing close to 350 professional and specialist staff, it has 17 offices throughout the UK — with valuation, agency, investment and consultancy teams focused on its key sectors. Christie + Co’s international operations are based in Barcelona, Berlin, Frankfurt, Hamburg, Helsinki, Dusseldorf, London, Madrid, Marseilles, Munich, Paris and Rennes.
STR Global is the new company recently created by leading hospitality research companies Smith Travel Research (STR), Deloitte’s HotelBenchmark™ and The Bench. STR Global provides clients — including hotel operators, developers, financiers and analysts — access to hotel research with regular and custom reports covering over 36,200 hotels in 512 markets in 94 countries. STR Global provides a single source of global hotel performance data, offering concise, accurate and thorough industry research worldwide.
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