The summer of 2023 has seen stellar hotel trading across the Nordics, with hotel room rates (Average Daily Rates, or ADR) in record territory in several markets. In our new hotel market report we look at the drivers of hotel performance and also discover some interesting facts about the hotel market structure in the region’s capital cities. Did you know that 82 percent of the hotel rooms in Oslo are controlled by the four largest hotel operators?
Many more hotels have been marketed for sale in 2023 than we have seen in the pandemic years and in 2022. While this is an interesting development, we experience that many transactions remain difficult to complete. Reasons vary, but a wide gulf regarding property values remains a key factor. The availability and pricing of debt financing also plays a key role, favouring all-equity buyers.
Hotel operators may have reason to cheer when they read their turnover reports, and many have reported record sales and profitability for 2022 and the first half of the current year. For some, however, costs have increased faster than room rates and profitability is under pressure. We see mounting pressure on hotels and restaurant operators and a slowdown in consumer spending, which most expect after this red-hot summer, will push some weaker operators into distress.
The second publication of this brand-new research series covers the period from May through August 2023 with relevant comparisons to the same period in 2022 and 2019.