Dialogue with analysts

What determines whether you will lease out a hotel or operate it yourself?

We always focus on the individual hotel’s unique situation and opportunities to create maximum value. When we make new acquisitions we allow the model that is in place to guide us, which in recent years has often meant operating the hotel ourselves. That’s because we’ve identified the greatest opportunities within this particular niche. Our aim is always to sign long-term, revenue-based and attractive leases. When this is not a possibility, we opt to operate the hotel ourselves. When carrying out major renovations or repositioning we often prefer to operate the hotel ourselves during the process and then lease it out once the project is completed. Two clear examples from 2024 are Scandic Go Sankt Eriksgatan 20 and Citybox Brussels.

Has the hotel market now fully recovered after the pandemic?

Most segments and markets have not only recovered but have also exceeded the 2019 levels. There are segments though that haven’t yet fully recovered, such as large group travel and international travel, particularly from regions such as Asia. We predict continued positive development in this area and expect a gradual recovery in the years ahead.

What growth opportunities are there in 2025? Which markets do you think have the most potential?

For 2025 we expect to see RevPAR growth in the hotel market driven by higher occupancy as well as increased average room rates. The acquisitions and investments we’ve made in the existing portfolio will also make a positive contribution. Helsinki in Finland and Germany are two examples of markets where the recovery has taken longer, even if things are moving in the right direction.

What do you look for when making acquisitions?

One of our biggest strengths is our flexibility and profound expertise, which enable us to make different types of acquisitions. Whether the intention is for us to operate a hotel ourselves, implement substantial renovations or reposition a hotel, we have the capacity to adapt to the situation at hand. We see particular value in more complex projects, because this is where we can benefit from our business model and our hotel expertise. Also, we’re not limited to a specific market or country; we allow the opportunities to guide us, which puts us in a strong and advantageous position.

What progress has been made in sustainability in 2024?

We have continued the process of sustainability-linking our bank loans based on our SBTi targets. During the year we increased the share of sustainability-linked loans from 6 to 45 percent, and we are aiming to maintain this good development pace. When we acquired three aparthotels in central London in August we took an important step by securing our first green loan. The loan was made possible thanks to the high energy rating of the properties and it has a significantly lower credit margin than the average for our loan portfolio. Altogether, our progress in sustainability is now contributing even more to our Group’s positive financial position.

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