Market Information
Hotel property transactions
Types of actors
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Descriptions of the hotel market

Nordic market

There are some national differences in the Nordic hotel market. Among other things, there are differences in relation to the segments’ share of the total market and the proportion of foreign guests. The Danish market differs most from the other markets. Copenhagen’s share of the total market in Denmark is very large. This is due primarily to the short distances in Denmark and a significantly smaller need for overnight accommodation in connection with domestic business travel. In Norway, the domestic business segment is significantly larger, due among other things to geographical distances and settlement patterns. Both Norway and Finland have a larger proportion of holiday/leisure guests than, for example, Sweden.

Denmark and Norway have historically had a strong focus on the tourism industry. Denmark has Europe’s largest tourism market, Germany, as its neighbour. Moreover, the country, and above all Copenhagen, has been seen as the gateway to Scandinavia. Norway’s beautiful countryside has been the country’s greatest attracting factor as regards tourists from abroad. Both countries have nevertheless lost market share in recent times.

In Sweden, the state-owned tourist organisation has developed a new and trendy webpage and a social website, both of which enjoy a good number of visitors. This indicates a more professional attitude towards the tourism industry on the part of the authorities and, if this development continues, Sweden may begin to challenge its more active neighbours Norway and Denmark.

Finland’s closest neighbour, Russia, has become an important actor in the Finnish hotel market. The Russian market has exploded in recent years, and this is also being noticed in the Swedish and Norwegian markets.

As regards the conference market, the Nordic countries have approximately the same market shares: 12–14%. Sweden has the highest proportion of business travellers, due to a larger population, the fact that many Swedish companies serve international markets, and because many international companies have regional headquarters in the country. In addition, Sweden is the largest country in geographic terms, and domestic business travel is therefore also an important part of the business segment.

From a product perspective, the Nordic market does not have many luxury hotels. The Nordic hotel guest does not really demand luxury, but rather a simple, comfortable and well-functioning hotel product. For example, irons and ironing boards were normal in Scandinavia long before they became standard in the international market. The same applies to wireless networks, as the Nordic countries are leaders in the use of IT.

Europe and internationally

The tourism sector is one of the world’s largest industries. The World Travel and Tourism Council (WTTC) estimates that it accounted for 10.4% of GDP in 2007, and that it encompasses almost 240 million jobs. The macroeconomic downturn and the slowdown in the markets on which the most recent monthly travel activity indicators are based indicate that the proportion of GDP accounted for by the tourism industry will suffer a more pronounced fall than predicted thus far. Nevertheless, the WTTC expects growth of 1% in 2008, followed by a downturn in 2009, and then an upturn of 2% in 2010. The long-term expectations within the tourism industry are supported by the rapid development of new travel destinations, as well as a general global increase in personal incomes. 

Travel activity increases as economic activity increases. In recent years, prior to 2008, there was a dramatic increase in travel activity in rapidly growing economies like China and India. The boom in Europe and the US also led to increased travel activity. Business travel was further increased through an expansion of contacts as parts of the world became more closely linked, for example within the EU. Low-price companies are contributing to increased demand, as are older people who are still healthy and active. 

We are approaching a new development period in which airline and tour operators will undergo a major reorganisation due to the drop in economic activity. This may lead to a reduction in capacity and further falls in demand, and to increased prices. 

Demand for hotel rooms fluctuates in accordance with the demand for transportation. Even if the number of business trips is expected to fall globally, some growth may still be expected in individual parts of the market, as people are increasingly choosing to stay at hotels rather than with friends or family. 

Europe is the world’s largest hotel market, with over five million rooms. The growth in GDP within the EU has been highly positive in the last couple of years. The Nordic countries have experienced years of strong development, and Eastern Europe has been growing since 2000. The countries of Western Europe have experienced weaker growth, but this has improved recently.

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