Airport arrivals across the capitals grew by more than 3% pa, whilst overnight stays in Copenhagen, Stockholm and Oslo increased by almost 5% annually. Although guests to the region remain mainly domestic or from the Nordic region, international arrivals have grown at a faster rate than domestic travel. This growth has been assisted by the fact Helsinki-Vantaa airport has the shortest direct flight connections between Europe and Asia. However, the region is still dominated by domestic operators with Scandic and Nordic Choice. Less that 10% of the supply across the Scandinavian capitals is operated under one of Europe’s main brands, making the market particularly attractive to international brands and operators.
Whilst there is a lot of appetite from international hotel operators to penetrate the region, different preferences in operating structure have historically impeded them from entering the market. Many local property companies and hotel operators seek lease structures whilst most international brands favour asset-light strategies such as franchise or management contracts. The solution, which is successfully practiced in other regions with a preference for leases such as Germany, appears to be a third-party aligned with an international management or franchise agreement.
Kimmo Virtanen, Director – Scandinavia, Russia and the Baltic States at Christie & Co adds, “We have seen growing interest over the past few years from international investors and brands looking at entering the Nordic region. There is also appetite for both internationally-branded lifestyle and economy products which will help maintain the steady increase of international tourists who look for known brands when travelling.”
Anna Eck, Senior Consultant at Christie & Co who co-authored the report comments, “As with entering any new market there are always challenges to overcome and although many international brands are wary of entering into different styles of operating contracts we are certain that the opportunities outweigh these challenges. Copenhagen, Stockholm and Oslo have all seen an increase in international demand over the past decade, compressing the share of domestic demand and we expect this trend to remain strong for the region going forward.”