Pandox UpGrade - Nr 1 2012 (Eng)

Up Grade # 1 2012 M a r k e t I N F O R M AT I O N F R O M PA N D O X – O N E O F E U R O P E ’ S L EA D I N G H O TE L P R O P ERT Y C O M PA N I E S Uneven picture in the world’s hotel markets trends | •POPULAR new york • NEW P O P - U P H O TE L S • Wo n d e r f ul c op e n ha g e n S po t ligh t6 8 10 Report from Follow our social London this year’s projects in Kenya in waitingp. Berlin Conference p. and India p. mode

JUST A WORDActive ownership – a veryengaging question! The hotel industry’s major tially implies that companies will leave their role as more than SEK 2 billion over the next three years in meeting place, the Inter- operator and gradually become brand and distri- upgrading existing hotels. The largest project is the national Hotel Investment bution companies. Roughly like a large EuroBonus development of 38 Scandic hotels for a total of Forum (IHIF), and equiva- company. These are the principal reasons why SEK 1.6 billion, of which Pandox will stand for two- lent to MIPIM, is tradition- asset management is becoming more important, thirds. Another major investment is the develop- ally held in the first week and perhaps be totally decisive with a partner that ment of The Hotel, Brussels, which is being reposi-of March. The meeting drew close to 2,000 par- can actuate value-development. tioned and totally refurbished. The first roomsticipants from most parts of the world and with Who then has the responsibility for managing started to be handed back in April, and the entirerepresentatives from all large companies. and developing the hotel properly? From Pandox’ product development will be completed by the end aspect, we have always hailed active ownership, of the year. Another large project is the investmentActive asset management which is part of the Company’s DNA. It is also in in Scandic Copenhagen for SEK 150 million, whichOne of the questions that attracted attention was fact quite evident because we stand for most of the we are sharing in equal parts with Scandic, andthe significance of active asset management. In the investment. But this approach does not cut much that was completed now in Q2. The hotel has thehotel world, asset management implies that some- ice with brand managers, who believe that a pas- ambition to be one of the best meeting hotels inone has the task of managing and developing the sive owner is a good owner, according to represen- Scandinavia for an international and Scandinavianhotel operations – a complex and often underesti- tatives in one of the debates where I took part. For- public. Go and have a look. We believe that you willmated task. One must understand a hotel’s local tunately, the audience did not agree with this view- like what you see!position, how product development should be pur- point. I have also seen, through comments onsued, how investments should be carried out, and blogs and other social media, that the question is Handball successhow operations should be managed. All with the frequently discussed and that most people are For those who may have missed the announce-objective of optimising cash flow and thereby sceptical to allowing hotel companies hold the ini- ment: Swedish handball will be going to the Olym-securing the value of the hotel property. tiative with regard to profitability and value-devel- pic Games – both the women’s and men’s squads!! The principal part of asset management is clas- opment. The debate will no doubt continue. The women’s squad became directly qualifiedsic hotelier work, along with a certain talent for through their second place in the European Cham-strategic thinking! Historically, such has been taken Relatively stable start to 2012 pionships one year ago, while the men qualifiedcare of and been a prioritised task for the senior 2012 started relatively stable compared with last during the Easter weekend. After a dramatic matchmanagement of hotel companies, where operative year, which was better than expected. RevPAR is with a rock ’n’ roll atmosphere in the stands, Swe-expertise has been a hallmark. This pattern has being primarily driven by prices, while volumes are den beat Macedonia by 27–23. So now it’s time tochanged in recent years. On the one hand, hotel declining in many markets. One of the reasons for pack the bags for our colleague Staffan & Co!companies often with northern Europe as their lower occupancy is fewer large meetings, which is Fantastic!!base, work with a business concept that uses a normal reaction in view of the economic uncer-rental lease agreements. This automatically puts tainty that prevailed during the autumn. Many peo-focus on the operative aspect and creates good ple are waiting or postponing their conferences.operational productivity. In general, one can say But despite this situation, the sector has suc- Very best regards,that these companies are good at asset manage- ceeded in raising prices, thanks to all those who Anders Nissenment. On the other hand, there are companies that work with revenue management.have moved to management agreements, often Pandox continues to develop well in thesewith North America as their base. These compa- somewhat uncertain surroundings. Revenues,nies are controlled by brand managers, where the cash flow and profitability are in line with last year.priority is to implement standards and measures to Pandox’ major challenge lies in planning and carry-establish and embody the brand name. This repre- ing out the considerable investments that we havesents a shift in strategy and expertise that essen- adopted. All in all, we estimate that we will invest Pandox Upgrade. Address: Pandox AB Graphic design and production: Cover photo: Scandic Copenhagen. Market information from Pandox – P.O. Box 15 Hallvarsson & Halvarsson Upgrade can be ordered from Pandox published approximately three SE-101 20 Stockholm, Sweden Photos: Ulf Blomberg, Peter Hoelstad, or read at www.pandox.se times a year. Tel.: +46 (0) 8 506 205 50 Getty Images, Shutterstock, Editors: Anders Nissen, Fax: +46 (0) 8 506 205 70 iStockphoto et al. Marika Hilldoff, E-mail: info@pandox.se Printing: TMG Sthlm, May 2012. Annelie Sundström Aguilar Visiting address: May be reprinted only with the Vasagatan 11, 9th floor, Stockholm p ermission of Pandox.2 market information from Pando x

News Hotel worldJANUARY FEBRUARY MARCH APRILRoomkey.com is formed – a new inno- JW Marriott Marquis constructs the Omena Hotels open their first Swedishvative search engine for hotels and hotel world’s highest hotel building in hotel in Stockholm. The Finnish com-reservations. The founders are a group Dubai, composed of two towers of pany Omena Hotels currently has tenof leading hotel companies and the 355 metres in height and thereby only hotels in Finland and one in Denmark.objective is to offer travellers direct 26 metres short of the Empire State The opening of the new hotel in Stock-access to a broad network of hotels over Building in New York. The first part of holm is the first in a planned expansionthe whole world with flexibility, precision the building will open already at the end in Sweden. The hotel chain has a busi-and quality assurance when making of the year. The whole hotel is expected ness concept based on offering veryhotel reservations. Roomkey hopes that to be completed in 2014, and will than central locations and low prices. Tohotels’ own reservations will recover The Carlyle Group makes acquisition contain more than 1,600 rooms. solve this equation, staff-intensive areasmarket shares from players such as for close to SEK 3 billion. The Ameri- such as the reception have beenhotels.com, expedia.com etc. can Carlyle Group is one of the world’s removed in the concept. largest fund managers, and now acquires the entire commercial area ofBalder purchases the five-star hotel Nacka Strand outside Stockholm from Pandox sells Ibis Hägersten inMarriott Renaissance in central Malmö Vasakronan for SEK 2.95 billion. The southern Stockholm. The businessfor SEK 400 million, representing a direct area contains the Hotel J and Restau- and conference hotel is located by thereturn of about 6 percent, according to rant J, as well as a large number of E4/E20 and has 190 guest rooms, tenthe purchaser. Apart from the hotel, the workplaces, homes, schools, restau- conference rooms, restaurant and bar.property also contains the TGI Friday’s rants, as well as exhibition and confer- The purchaser is Sveafastigheter via itsrestaurant. The lease with Marriott is for ence facilities. The acquisition cooperation with Midstar and Eventjust over 17 years. The vendor is the embraces a total of 17 properties. Holding. The purchase price amountsNorwegian company Kristiania, who to SEK 112 million.have sold after having acquired the hotelproperty only in February last year from Pandox sells the hotel property Elitethe crisis-hit Faktor Eiendom, also from Stora Hotellet in Linköping. The hotelNorway. Balder now owns ten hotel has 92 rooms, restaurant, as well asproperties further to the acquisition. conference and banquet facilities. The purchaser is the Mikael Åhman family, and possession took place on 15 February 2012. New landmark in Narvik – Rica Hotel Narvik. The hotel is one of northernCarlson and Rezidor form the Carlson N orway’s tallest buildings with 16 floors. New Thon Hotel in Brussels. ThonRezidor Hotel Group. Carlson, a global The hotel has 148 rooms, a restaurant Hotel EU is a 4-star hotel with 405travel and hotel company, and the on the ground floor and the Sky Bar with rooms located in the EU part of the cityRezidor Hotel Group, one of the world’s panoramic view from the terrace on the with walking distance to all major Euro-fastest growing hotel companies, top floor. pean institutions. The Thon Hotel EUannounce that they have formed the is the fifth Thon Hotel in Brussels, whichCarlson Rezidor Hotel Group for joint makes the group one of the largestinvestments and partially joint marketing. New exclusive 12-room hotel opens players in the city. in Stockholm. The new hotel, Ett Hem, Start of building of the Park Inn by opens at Balders Hage in Lärkstan.Clarion Post opens in Gothenburg. Radisson Lund. The hotel is part of Ett Hem is a well-furnished home fromPetter Stordalen’s new hotel with 500 Midroc’s planned establishment of the the beginning of the last century withrooms in the old post house in World Trade Center Lund, where Midroc just twelve rooms. The target group isDrottningtorget in Gothenburg was is developing a new area with offices, wealthy travellers who wish to have theinaugurated with a large and spectacu- an office hotel and a hotel. The new best, but are tired of large impersonallar party. The new hotel has implied ten-storey hotel will contain 9,300 m2, luxury hotels.investments of around SEK 1.4 billion 192 double rooms, conference facilities,for the owner, Home Properties. a restaurant for 150 persons, as well as a bar/lounge area and fitness centre. The hotel will be operated by the Winn Hotel Group and will open in the beginning of 2014.market information from Pandox 3

Focus on the market Uncertainty leads to different patterns in the hotel market DIFFERENT TRENDS IN THE WAKE OF UNSTEADY GLOBAL ECONOMYThe first quarter 2012 started relatively stable and the beginning of 2012. However, 2012 started with good growth. On the other hand, Oslo andcompared with last year, driven primarily by with a slight increase in the rate of growth for the Stockholm had relatively weak Q1 reports whileprices while volumes are declining in many city compared with the average for the country, Copenhagen was in line with last year.markets. The uncertain global economic situa- which is more stable. Several other large American In general, trends are moving towards increas-tion in the autumn was reflected in fewer large cities are also showing positive trends and an ingly shorter lead-times. Many markets are seeing ameetings in the first quarter, and subsequently increase in the rate of growth. Boston, Chicago, growing opportunistic customer pattern particularlylower occupancy. Considerable uncertainty still Los Angeles, San Francisco and Miami have all within the meeting and event segment, whichprevails regarding the global economy – both reported double-digit growth in the first quarter. means difficulties in planning manpower and fore-upwards and downwards. In general, the first casting occupancy. The first quarter had fewerhalf-year is expected to be weaker, with Uneven picture in Europe guests from the PIIGS countries and France, as wellimprovements in the autumn. The financial markets in Europe are still fragile. A lot as slightly lower demand from the finance sector. of work remains before long-term and sustainableSigns of strength in the US, solutions to the problems in the debt-ridden euro- Stockholm and Gothenburgbut a long way to go countries are in place. Very large amounts have Stockholm experienced uneven trends last year.The United States continues to show signs of however been injected into the banking system, 2012 started cautiously with slightly lower pricesstrength in the country’s economic trends. Stock which has led to reduced risk aversion in the finan- and volumes in January-February, although bettermarkets have risen during the year so far in tandem cial markets, and less concern that the Greek crisis in March. These relatively weak developments arewith the publication of a number of positive macro- will spread to the rest of southern Europe. primarily due to a high proportion of new capacityeconomic indicators. Unemployment has fallen European developments in the hotel market are in 2011 (Scandic Grand Central, Scandic Victoriaslightly, the Purchasing Manager Index shows cau- more uneven than in the United States. Consider- Tower) that dampened the market. Additionaltious optimism, and industrial sales have increased. able differences prevail between countries and capacity continues both this and next year with theHowever, there are several worrying indicators that regions, and there are strong fluctuations from one opening of Clarion Arlanda and the expansion ofmake optimists waver, and that show that the way month or even weeks to another. The first quarter Quality Hotel Globe.back will still be long – the housing market is still shows, not completely unexpectedly, that growth The Stockholm year is deemed to be an inter-weak, the country’s public debt constantly exceeds markets in eastern Europe and the Baltic States mediary year regarding fairs and conferences, and100 percent, gasoline prices are at record levels, have the strongest trends while southern and west- few really large events are booked compared withand the proportion of properties where the mort- ern Europe have declined slightly. 2010 and to a certain degree 2011. The number ofgage exceeds the market value is increasing again. business visitors continues however to be strong,Labour market indicators have also been poorer Stable in London and 2011 was a record year with a total of 10.6 mil-recently. London saw continued stable trends in the begin- lion commercial room nights. At the end of March, The American hotel market basically follows the ning of the year, and the first quarter had growth of RevPAR for Stockholm was +1 percent on a rollingcountry’s economic situation, and has seen and is 3 percent. In view of that 2011 was a record year, 12-months basis and +/–0 for rolling 3 months. Thestill seeing good trends. In the full-year 2011, the this is a good sign and shows that underlying short trend shows that there is less demand andUnited States had strong and even RevPAR- demand is good. There are however certain black that there is reason to believe that rates, whichgrowth where each quarter reported an improve- clouds regarding the British economy. In general, a have been at stable high levels for some time,ment of around 8 percent compared with the previ- slow recovery is anticipated further to bringing the could start to decline.ous year. The positive trend continued in the first budget back into balance, and that unemployment The Gothenburg market also developed rela-quarter 2012, which also closed with a RevPAR is very high. tively weakly in the first quarter compared with lastincrease of 8 percent – divided equally between year. It is however worth noting that last yearprice and occupancy. Difficult to forecast in the Nordic Region Gothenburg had a record strong first half-year, and New York has developed essentially in line with Nordic countries saw different trends in RevPAR in that new capacity came to the city through thethe country’s average, both for the full-year 2011 the first quarter. The Helsinki market was stable opening of Clarion Post with 500 rooms in January. Explanations: RevPAR = Income per room available4 market information from Pando x

The market is also feeling lower economic activity. erable potential in consumption, unemployment SCANDINAVIAN OVERVIEWRevPAR in the municipality of Gothenburg at the has peaked, and housing prices are back to pre-end of March was +/–0 percent on a rolling crisis levels. Greater Stockholm (total approx. 280 hotels)12-month basis and –2 percent for rolling 3 The hotel market also shows good foundationsmonths. The short trend thereby shows a decline. for continued development. The beginning of 2012 SEK Thousands/day was stable and the market has recovered well after 800 30Additional capacity in Oslo a weak fourth quarter in 2011. Developments are 700The Norwegian economy is developing positively driven primarily by stable prices and that occu- 25 600with strong domestic demand and increased pancy has started to rise after low levels at the end 20employment. The Norwegian krona is however still of last year. Only limited new hotel capacity is 500weak further to fewer exports. expected in 2012, which could strengthen even 400 15 RevPAR The hotel year started relatively weakly, due pri- more a continuation of good trends. In March, 300marily to the market being compared with strong RevPAR was +3 percent on a rolling 12-month 10 200last-year figures. The skiing world championships basis and +/–0 percent for rolling 3 months. 5held in January–February 2011 meant that large 100parts of Oslo were fully booked. A significant pro- Helsinki – good outlook for 2012 0 0portion of new capacity was also added to the The outlook for the Finnish economy has improved 05 09 02 03 04 06 07 08 10 11 20 20 20 20 20 20 20 20 20 20market last year, including the opening of Scandic with an anticipated increase in exports in the second RevPAR, SEKVulkan in central Oslo with 149 rooms. Additional half-year. The Helsinki hotel market had a strong end Source: MIS Available room nights, thousands/day Pandox (SCB)capacity will continue in 2012 with the new hotels to 2011 and a good start for 2012. The market isQH Hotel Arena, Comfort Grand Central and Scan- coming however from low levels, with last year see-dic Fornebu, which are expected to dampen the ing an unusually weak conference year. At the end of Copenhagen (total approx. 80 hotels)market. However, additional capacity will be limited March, RevPAR was close to +4 percent on both aas of 2013 and onwards. rolling 12-month and 3-month basis. Growth is DKK Thousands/day At the end of March, RevPAR was –5 percent driven in equal parts by prices and occupancy. 700 16on a rolling 12-month basis, and –10 for rolling 3 Several events imply continued good trends in 14 600months. Analysts believe however that the underly- 2012 for Helsinki, including the ice-hockey world 12ing demand and market are still stable. championships, global capital for design, as well as 500 an increasing number of tourists from Russia, the 10 400Towards brighter times in Copenhagen United States and Japan. 8 300 RevPARThe Danish economy is showing several signs of 6going towards brighter times. There exists consid- 200 4 100 2 0 0 05 09 02 03 04 06 07 08 10 11 20 20 20 20 20 20 20 20 20 20 RevPAR, DKK Source: Available room nights, thousands/day STR Global Oslo (total approx. 60 hotels) NOK Thousands/day 800 12 700 10 600 8 500 400 6 300 RevPAR 4 200 2 100 0 0 05 09 02 03 04 06 07 08 10 11 20 20 20 20 20 20 20 20 20 20 RevPAR, NOK Source: Available room nights, thousands/day MIS Pandox Helsinki (total approx. 50 hotels) EUR Thousands/day 80 9 70 8 60 7 6 50 5 40 RevPAR 4 30 3 20 2 10 1 Scandic Malmen, Stockholm 0 0 05 09 02 03 04 06 07 08 10 11 20 20 20 20 20 20 20 20 20 20 RevPAR, EUR Source: STR Global, Available room nights, thousands/day MIS Pandoxmarket information from Pandox 5

Market overview Q1/2012 Pandox market barometerMARCH 2012 The market barometer shows the situation of selected cities economic climate, how well-developed the hotel market is, as well as howin the economic cycle. The appraisal is based on an analysis of each city. Con- developed and liquid the hotel property market is. Note that the hotel econo-sideration is given to macro-developments, trends within the hotel industry, the mic cycle is the same in pattern, but different in time.SWEDEN PEAK downturn Luleå, Umeå Uppsala, Lund, Stockholm, Jönköping growth Karlstad, Sundsvall abating downturn Gothenburg, Malmö level-off HelsingborgLund, after a strong 2011 with good spring pared with last year. The positive development As in Stockholm, January-February were weakermonths, started to decline in the first quarter 2012. continued during the whole of 2011 and RevPAR months while March showed stronger trends. Rev-The short trend is downward and RevPAR is –5 was close to 12 percent on a rolling 12-month PAR was –2 percent on a rolling 3-months basis,percent on a rolling 3-month basis. Helsingborg basis. The short trend shows however a weakening although this is compared with a strong last-yearhas had stable developments in the last 12 growth rate. and additional capacity in the first quarter 2012months, but the short trend shows a weakening Stockholm experienced uneven developments that dampened the market, which is also feelingand decreasing growth rate, with declining last year. 2012 started cautiously with slightly lower lower economic activity. The short trend is a decre-revenues. prices and volumes in January–February, but with asing downturn. Malmö developed negatively in 2011. The trend growth and better trends in March. These relatively The hotel markets in northern Sweden havecontinues although volumes have now started to weak developments are primarily due to a high pro- developed well in general. Luleå, Umeå, Kiruna,rise and the growth rate for the first quarter 2012 portion of new capacity in 2011. RevPAR for Östersund and Sundsvall all have positive trendswas in line with last year’s levels. Stockholm is 1 percent up on a rolling 12-month both in the long and short-term. Umeå is currently Jönköping has seen volatile developments basis, although back to last year’s levels for rolling developing strongest with a RevPAR of more thanover the last 12 months, and is now in a negative 3 months. The short trend shows a slight decline. +16 percent for both rolling 12 and 3 months, duetrend that is increasing downwards. The first quar- Uppsala is currently developing weakly. Both primarily to prices. Trends in Luleå and Sundsvallter of the year fell by more 11 percent, which was long and short trends show a downturn driven pri- are also being driven by prices, while Kiruna andpartly due to several one-off events last year. Karl- marily by falling prices. Östersund are driven by occupancy.stad developed at a higher pace, and the first Gothenburg was uneven in 2011 with a record-quarter saw primarily occupancy doing well com- strong first quarter and a weaker second half-year.the market on the marketThe year’s hotel conference in BerlinThe International Hotel Investment Forum, IHIF, is the hotel indus- The tourist industry increasingly significant for the global economy.try’s equivalent to the MIPIM property fair and the major annual The first day of the conference saw an interesting talk by David Scowsill, Presi-meeting place for our sector traditionally held in the first week of dent & CEO of the World Travel and Tourism Council (WTTC). Fascinating statis-March. This year was the 15th time the forum has been arranged. tics were presented, showing that the tourist industry is becoming increasinglyThe meeting attracted 1,700 participants with representatives from significant for the global economy, including:all large companies from 57 countries. There were more participants • The tourist industry represents 9% of the world’s overall GDP growth (whichthan last year, but still below the pre-finance-crisis record years. can be compared with the finance sector’s 11% and the car industry’s 8%)As in previous years, there were very few Scandinavian hotel owners • That the forecast for 2022 shows that 1 of 10 jobs will be within the hotelpresent. But Pandox of course was well-represented and took part and hospitality sector.in several debates. Here is our report… Interesting!6 market information from Pando x

KEY TO THE DIFFERENT PARTS OF THE HOTEL ECONOMIC CYCLE: ROWTH Occupancy rises relatively quickly and prices start to increase. G BATING DOWNTURN Volumes become more stable – continued pressure A High potential and low risk. on prices. Certain potential and high risk. EAK Occupancy rises/levels off and prices increase quickly. P EVEL-OFF Occupancy rises with unchanged prices. L Good potential and low risk that gradually rises to high risk. High potential with declining risk. OWNTURN Occupancy and prices fall further to lower demand or over-capacity. D Low potential and high risk.International PEAK downturn London, Paris, Zürich, Oslo Warsaw growth Helsinki, Copenhagen, Barcelona, Moscow abating downturn – level-off BerlinLondon saw continued stable hotel developments equally by prices and occupancy. In Copenhagen, now overtaken London. Several other easternin the beginning of the year, and landed at +3 per- developments are driven mainly by stable prices, European cities are performing strongly, includingcent in the first quarter, driven primarily by rising although occupancy has started to rise from low Moscow, Tallinn and Budapest. The financial cityaverage rates. In view of that 2011 was a record levels. RevPAR for the quarter closed at +/–0 com- of Zürich has declined most for the moment, withyear, this is a good sign and shows that the under- pared with the same period last year. Oslo declined a decrease of 10 percent for the quarter.lying demand is good. Berlin also showed a good in the quarter further to strong last-year figures and Barcelona shows continued good growth bothquarter and closed with +3 percent growth, driven increased additional capacity. in price and volume while Amsterdam, which wasby occupancy while prices continued to decline. The strongest trends in Europe are currently in strong for a long time, declined slightly due to decli- Helsinki’s hotel market had a strong end to Warsaw with +10 percent after the first quarter, ning volumes.2011 and a good start to 2012. At the end of followed closely by Paris with +9 percent. In bothMarch, RevPAR was up by close to +4 percent for cities, the growth is driven only by average rates,both rolling 12 and 3 months. Growth is driven and prices within the luxury segment in Paris haveThe significance of the increasing middle-class in growth regions. It was easy for members of the ownership is required to maintain profitability, theChina and India was emphasised: together, these audience to believe that they were competing with positions have changed and the owners’ demandscountries are expected to represent 1/3 of GDP- each other, with the winner being the one with the towards the brands have become greater – partic-growth for the global tourist industry in 2022. To most new rooms in the pipeline… ularly when the owners make considerable invest-close, the WTCC sharply criticised the world’s gov- ments in the hotel properties.ernments for maintaining expensive visa require- The debate continues: brands vs. owners The debate also touched profitability aspects.ments for tourists, which leads to considerably The second day of the conference saw a debate The major brands indeed contribute to pushing upreduced tourist revenues. regarding the hotel property owner’s role versus the average rates, but in view of the charges and other Other speakers also emphasised the impor- brands’ role/operator’s role. It was quite clear that service costs associated with franchise or manage-tance of the continued development of China and the relationship has been and, from time to time still ment contracts, the question is how profitableIndia. The general opinion seems to be that a lower is, associated with certain tension and different these contracts are for the owners? From the own-rate of growth in these countries would have con- viewpoints. er’s side, there is a desire to see more joint invest-siderably more serious consequences than a In general, it has previously been easier for the ments, greater shared risk and less influence fromdrawn-out debt crisis in Europe. major brand names to fully obtain their demands the brands. The brands maintain that owners All of the major brand names were naturally regarding the design of rooms, price-setting, hotel should carefully read what each respective brandpresent, and they were all given the opportunity to concept, etc, vis-à-vis the property owner. Now stands for in view of that flexibility within a brandpresent their forthcoming hotel projects in different that more and more owners understand that active name is limited.market information from Pandox 7

ThEMe social projects… Pandox Youth HandballMovement Follow our projects and development at www.pandox.se/foretagsansvarLast autumn, Pandox established the Pandox mitment and good cooperation, we are nonethe- young people (spread roughly equally between girlsYouth Handball Movement project together with less pleased when we look back over the project’s and boys), who train regularly 2–3 times each weekPartille Cup and the Kenyan handball association first half-year. We can already observe several posi- – compared with the 200–400 who trained more– Mount Kenya Sports Group (MSG). tive effects and good results. We are particularly irregularly previously. The overall goal is to contribute to children and happy that we have succeeded with most that we – MSG has successfully established ayoung people having meaningful and comprehen- have strived to obtain and set up as targets in the league where children and young people can playsive leisure time through sport and handball train- project plan: against each other in different age groups anding. Based on this foundation, the objective is to – The number of members is growing and we degrees of difficulty. A league did not exist beforealso contribute later with education regarding dis- have an organised administrative staff and strong and we believe that it can be a success factor forease as well as social and attitude issues. local project management with resources to handle greater interest for the sport, broader spread, and The project is still basically in the start-up phase, membership applications, as well as long-term not least to strengthen MSG as an organisation.with many activities being formulated and pro- planning for further expansion. The number of – The Pandox Training Course has beencessed. Thanks to many enthusiasts, strong com- members is currently already over 600 children and implemented with good results. Two training Pandox Training Course. Warming-up before the match in true Pandox spirit.Freeset – Supporting freedom on the go! As we have previously mentioned in UpGrade, Pandox supports A lot has also happened within Freeset during the year. Focus the fair-trade company Freeset in Calcutta by purchasing own- is now on getting more donors and to be able to open more designed products, handbags and cloth bags, etc. Among Pan- centres in northern Calcutta. According to Freeset, the cost of dox’ own-operated hotels, the Hotel Berlin, Berlin has pur- being able to offer prostituted women freedom through chased 5,000 cloth bags and the Hotel Bloom! is next in line. employment is about USD 475. This amount includes requisite Pandox has also mediated contacts between Freeset and education regarding sewing, reading and writing, as well as other companies that have shown interest in the products, medical and child care. It may not seem to be a very large including Congrex, an international management company that amount of money to help someone to long-term freedom, but offers services for meetings, events and conferences. Congrex in order to find more donors Freeset has entered a cooperation has purchased bags and arranged lectures about Freeset and agreement with an organisation called Forgo with the objective social commitment for their customers. We at Pandox think of enabling small donations. Through Forgo, it will be easier for that it is fun to be able to help other companies to initiate social normal people to give small amounts of money to charity in cooperation. conjunction with their daily shopping. Fargo’s SmartPhone app8 market information from Pando x

Five questionscamps for trainers and coaches of young people were held for two weeks inFebruary. The participants learned about handball theory, how to handle inju-ries, bandage feet and fingers, pump balls, as well as discussing goodsportsmanship. But perhaps the most appreciated was nonetheless to tryout new practical exercises, defence and attack, in the handball court. A Par-tille Cup Kenya Trophy tournament was also held during this period with 80 to Peter Erikssonteams and more than 1,100 players taking part, which was a record for all theyears the tournament has been held. Hotel manager of the Hilton The participants had very different levels, but all made progress in a short Stockholm Slussentime, according to head coach Lisette Norén from IK Sävehof. Many of theparticipants had to walk a long way to take part in the training, up to one hourin each direction. The training camps drew a lot of attention in Nyeri, andthere are considerable expectations and hopes for recurrent camps. Thecamps were concluded with the distribution of diplomas and Pandox-sweat-ers, and all participants were very grateful to have been able to take part. – Part of the support is used to give food to the poorest players inconjunction with the training sessions. – Social projects are growing in number. The hope is that the next train-ing camps for handball leaders will also include discussions about attitudesamong young people, healthy diet, drugs, hiv/aids as well as issues concern-ing social life. These items are in demand and interesting to study. Other proj- 1ects are also being formulated, including starting to award grants in the Stockholm received considerable new capacity in 2011autumn in order to give young people an opportunity for better education. and more hotels plan to open in 2012. Trends in the first It was fantastically inspiring for us at Pandox who visited Nyeri while the quarter were relatively weak, and many people believetraining camps and tournament were in progress, and to see the Kenyan joy that predictability is lower now than previously. How do youand self-evident presence. Young people who laugh, dance and sing feel about the Stockholm market for the coming year?together next to the handball court show that we in Sweden have a lot to Difficult to say, and I agree that predictability is lower now than previ-learn from our Kenyan friends. Sport is a considerable source for happiness ously. There are no direct weeks that are fully active in the same wayand solidarity, and we have experienced the Kenyan young people as being as before. Things move along however, and the year will be fine forincredibly open and optimistic regarding their situation and future. This has Stockholm, although I believe that the market will be slightly poorerstrengthened us in our belief that sport plays an important role for children’s than last year as a whole.development, and that we are on the right track within this project! 2 We indeed know that Hilton Slussen is a first-class international hotel with one of Stockholm’s absolutely most beautiful panoramic views. But what more is Partille Cup Kenya Trophy – the largest tournament unique about Hilton Slussen? in East and Central Africa We have a product that is extremely good from all aspects. For hard- Mt Kenya Handball Club, MSG, has taken part since 2003 in the ware, the architecture of the hotel is unique with three completely world’s largest tournament for young people – the Partille Cup in separate sections and many round forms originating from Slussen Gothenburg. More than 1,000 teams from 50 countries take part in and its design. We provide excellent service, which is clearly reflected the tournament. In 2008, MSG took the initiative to start an own local in the very positive feedback from our guests. We have also focused tournament in their hometown of Nyeri. The tournament has been on having Sweden’s best breakfast, which we are very proud of. arranged since 2009 with support from Partille Cup, and the number 3 of participants has steadily grown – in 2012 there were 80 teams with You have been hotel manager of the Hilton Slussen 1,120 participants. The dream is now to bring in more teams also from since 2008 and have 130 employees. How would you other parts of Africa and the world. During this year’s tournament, summarise your leadership with three words? MSG was responsible for a tent under the banderol “MSG – Friend of I allow a very large scope of action to all of my the Youth”. The tent was a much-appreciated feature and young peo- department heads and employees. My job is ple, trainers and parents could go there for guidance and advice from to try to make their job easier. And then we Delegation knowledgeable coaches concerning both healthcare and problems experienced by young people. must have a lot of humour and creativity – Creative which is very important for the hotel. I also want department heads in particular to be Trust organised. I like organised creativity. 4 Hilton Stockholm Slussen is the only hotel in Stockholm operated under the Hilton brand. What significance does this have for your operations? On the one hand it is easier to focus on just one hotel. However, I would like to see more Hilton brands in Stockholm because it would make it easier for our staff to pursue a career and for us to retain manyenables people to choose a cheaper alternative of a product or completely skilful employees. Simultaneously, there would be economies of scaledecline a purchase in favour of Forgo’s project. For example, one can that we do not currently have.choose a small cup of coffee instead of a big cup, or just skip having a 5coffee and instead send a small amount to charity And finally, how come you have your own beeswith a couple of simple clicks on the phone. Pandox at the hotel?is following the cooperation agreement with great When Pandox was planning to refurbish our roof, we wantedinterest, and hopes for good results for Freeset. to have a large meadow with flowers and grass on the roof, like a garden in the centre of Stockholm. I started to Google around on this subject, and found buildings that had bees on the roof. The idea was born and we have had our bees for one year now. But we are still waiting for our roof garden… Read more on www.forgo.it, www.freeset.org or scan the QR code.market information from Pandox 9

Trendspotting ... Olympics – countdown to the… New York – increasingly popular sporting event of the year!New statistics from New York’s tourist office Hotel room occupancy in London is normally stable Miles Auger, Associate Director of the valuation teamshow that the number of foreign tourists in around a high level of 80-85 percent during the of CBRE Hotels, also predicts a positive effect fromNew York has more than doubled since 2005, summer months – despite the European vacation the Olympics and believes that the Olympic weekswithin an increase from 6 million in 2005 to period, less business travel, and that tourists to a combined with the Diamond Jubilee and Farnboroughalmost 13 million in 2011. Among Nordic tourists, certain degree prefer sea and sand instead of cit- will lead to a buoyant summer with a particularlySwedes were the largest group. ies. The current question is how the most outstand- strong leisure segment while potentially having a Tourism is extremely significant for the city’s ing sporting event of the year – the Summer Olym- reduced corporate segment due to the number ofeconomy. Last year, tourists spent USD 32 billion pic Games from 27 July to 12 August and the Para- large leisure events deterring business from Londonand around 321,000 people in the city have a job lympics from 29 August to 9 September – will affect over what is otherwise a quieter corporate period.that is dependent on tourism. the hotel market. There is also some expectation that the timing of Ramadan may bring demand in late August to early An exciting time for London September. For the full-year, the rise in RevPAR is This will be the third time that London has hosted a forecasted to be 4–5 percent, due entirely to pricing, modern Olympic Games. Interest is at a record high, while 2013 is expected to see weaker trends. and most of the 6.6 million tickets have already been The hotel consultant Savills Hotels is also positive sold. London will also see the Queen’s Diamond Jubi- with regard to effects on the hotel industry in London. lee this summer with the particularly important cele- In one report, growth for the full-year 2012 is fore- bration of the Queen’s 85th birthday and 60 years on casted to be close to 4 percent. the throne, which prepares the way for a very exciting time for London and for visitors. …although some have doubts 2011 was a record year for British tourism with more Other analysts anticipate less tourism during the sum- than 30 million foreign visitors, who together spent mer. Higher prices, larger crowds and infrastructure GBP 18 billion. Tourist organisations are now fully problems are factors that could imply that less sport-… Pop-up hotel new trend engaged in marketing the Olympics and the iamond D interested tourists could flee the city. Sceptics alsoThe pop-up trend – for those who want to be first Jubilee with the hope of beating last year’s figures. believe that the number of hotel reservations is stillwith the latest. The concept is based on new, below the forecasted level and that expectations areoften rather odd and different hotels that “pop High expectations and a lot happening unrealistic. One underlines in particular the prevailingup” in the market for a short time, only to disap- London’s hotels have considerable expectations economic climate, that room occupancy figures comepear again just as fast. One example of the new regarding this summer, which can be seen in the high already from high levels, and that many hotels havetrend is the spectacular one-room hotel called “A prices. Room rates in central London and in east Lon- allocated rooms to the Olympic Committee at dis-Room for London” by the Thames close to don, close to the arenas, are more than GBP 400 on counted rates. Moreover, the fact that certain otherWaterloo. The hotel has been successfully average, which is more than double normal price lev- hotel operators that tried to apply restrictions for multi-launched as a retreat from the throng of the city, els. Even higher prices – up to five times normal rates night reservations have now already started to softenand will remain for the rest of the year. Another – have been noted, especially during the inauguration their demands, can also be interpreted as meaning thatexample is Design Hotels’ Papaya Playa project and closing ceremonies. expectations are too high.in Mexico, where the hotel operator has rented a Another dark cloud is what will happen in thehundred beach huts – with a lifetime of five Positive voices from the market… hotel market directly after the Olympics. One percep-months. According to Giorgio Manenti, Executive Vice President tion that is probably shared by many visitors is that of JLL Hotels in London, the Olympics are expected to London is an expensive destination this summer due… Delayed take-off for Berlin’s new huge have a very positive effect on the hotel market. High to the Olympics… and that the Olympic Games willairport reservation levels are being reported already now in continue for most of the summer.Only in spring 2013, after several delays, the new May for the central hotels, despite the high prices. Gior- However, the Games have not yet started and weairport in Berlin – Berlin Brandenburg Willy Brandt gio Manenti also believes that the Olympics will have know that the hotel industry is becoming increasingly– is expected to open about 20 km south-east of considerable significance for London in the long-term. unpredictable, and that late reservations are becom-the city centre. The airport is built on a surface The investments made in infrastructure have made ing more common. UpGrade will, quite simply, reportequivalent to 2,000 football fields and will initially London a more healthy and attractive city for tourists, the subsequent outcome!take 27 million passengers a year, but with residents and investors.expansion potential for a further 45 million pas-sengers. This can be compared with Arlanda’s 19million passengers. The new airport will open upa new opportunity for marketing Berlin both as atourist and a conference city. Forecasts up to2020 show a 40-percent increase in the numberof overnight stays – and apart from all of the well-known tourist attractions, visitors are alsoattracted by good value for money in Berlin.(Sources: Vagabond, dn.se, svd.se)10 market information from Pando x

CITY in CENTREWonderfulCopenhagen Scandic Copenhagen Photo montageCopenhagen is very much an international hotel cycle to the sanctuary of Christiana with its Pusher Copenhagencity, and close to 60 percent of all hotel guests Street and the renowned, liberal and permissivecome from another country. Demand for the lifestyle. Then finish off with a cold beer at a pave- HOTEL AND TOURISM DATAhotel industry is driven by the city’s strong posi- ment café in Nyhavn. There are many alternatives,tion as a conference city and leading cruise and the city is easily accessible with several parks Hotel guestsdestination in Scandinavia, proximity to the and cycle paths.Kastrup International Airport, and considerable There is also a very broad choice of restaurantsbusiness travel. in Copenhagen with good quality, including Noma There was significant capacity addition in 2011 that has been voted several times as the world’swith several large new hotels, including the Bella Sky best restaurant. Nightlife offers all imaginable kindsComwell Hotel with a unique award-winning design of clubs, and for those who want to rest their feetand more than 800 rooms, and the central and after a hard evening on the dance floor, an optimal Domestic, 43% Leisure travel, 54%trendy budget Generator Hostel hotel with 662 choice is to take a rickshaw cycle taxi to the hotel, International, 57% Business travel, 46%rooms. However, only limited new hotel capacity is or even further into the Copenhagen night thatexpected in 2012. most often goes over to the morning. Hotel Market size:Perfect for a weekend! Pandox projects Approx. 80 hotels,Apart from the best-known attractions such as A lot is also happening in Copenhagen for Pandox, About 15,000 roomsTivoli, the Louisiana Museum of Modern Art, the including the ongoing development of Scandic Largest brands: Christianborg Palace, Ströget, and the little Mer- Copenhagen. All rooms will be upgraded, and the Arp Hansen,maid, there is much more to discover – such as dif- lobby, reception, conference facilities and restau- Rezidor, Scandicferent architecture and the role as an acknowl- rant will have a totally new and modern design con- No. of guest nights:edged fashion city. Why not take a sightseeing tour cept. The goal is ambitious – to be one of the best Brands, 33% More than 3.7 millionwith the favourite Danish means of transport – a meeting hotels in Scandinavia for an international (+12% compared with Independent, 67%bicycle! Visit the Glyptoteket Museum at Radhus- and Scandinavian public! 2010)platsen, look at new trendy parts of Nørrebro orThe major Shark project continues Scandic Upplands Väsby – first of the highway hotelsThe joint hotel project between Pandox and Scandic, The project’s vision is to renew and develop the new with the new design concept.where SEK 1.6 billion is being invested in the upgrad- generation of highway hotels with a joint concepting and development of 38 existing Scandic hotels in and to invest in new concepts for the city-centrethe Nordic Region, is known as “Shark”. The project hotels. The new concepts are characterised by flexi-embraces most of Scandic’s highway hotels, as well bility and untraditional solutions that take into consid-as city-centre hotels such as Malmen in Stockholm, eration new family constellations, travel patterns andContinental and Hilton Strand in Helsinki, and the trends. This also implies that the history of ScandicKNA hotel in Oslo. The framework of the project was and each respective highway hotel be integrated inadopted in 2011, and full focus is now on planning the design element and layout, that the hotels’ infor-the large number of sub-projects included in the mal home-feeling be strengthened, that more socialinvestment, identifying purchasing synergies, and meeting places be created, and that the rooms begetting really started. given new complete furnishings and design.market information from Pandox 11

Pandox news News from the world of Pandox New technology at The Hotel Brussels Hotel manager Bernard Chênevert had the pleasure and honour of welcoming Michail Gorbatjov. The Hotel Brussels has signed an agreement with Open Ways that offers a SmartPhone app that guests can use as their room Prestigious visit to the InterContinental key. Part of the ongoing total refurbishment will be the installation Montreal of “Mobile Key”, via Open Ways, for all of the hotel’s 424 rooms. Mikhail Gorbachev, former president of the Soviet Union, took part in a conference with the board of the Montreal Chamber of Commerce. The VIP guest appropriately stayed in the presidential suite at the InterContinental Montreal, and welcomed other dignitaries including Brian Mulroney, former prime minister of Canada. Other celebrities who visited the hotel in the past half-year include Lady Gaga and Twitter-founder Bizz Stone – exciting! Jan Henningsen and Aldert Schaaphok at the Hotel BLOOM!Prestigious award for HyattHyatt Regency Montreal has received an award forits excellent hospitality. It is the 26th year thatindustry and commerce in the region receivesawards for their efforts to make Montreal a world-class destination. In the “larger than 200 rooms”category, Hyatt received the coveted Ulysses 2012 New rooms ready at the Hotel Berlin, Berlin New hotel manager at the Hotel BLOOM!award further to extensive refurbishment of the The extensive refurbishment of the Classic Wing is Jan Henningsen grew up in Germany but haspublic areas, restaurant, bar and wine-bar in 2011. now complete and a total of 200 new premium pursued his career in the United States. His latest rooms and 26 new conference suites are now position was as hotel manager of The Standard ready to welcome their guests. All of the rooms West Hollywood in Los Angeles and The StandardGood Christmas deed of kindness have an aspect linked with Berlin’s history. Five Los Angeles Downtown.at the Choice in Södertälje! floors are divided into different decades with design – “Jan has broad experience of managing andJust before Christmas 2011, the Quality Park in and furnishing characteristics of the period, where developing concept hotels in the United States,Södertälje started a charity project that offered each floor tells its own part of the city’s history. and we believe that the Hotel BLOOM! will be ablepoor families the chance to have a more pleasant to fully benefit from his knowledge,” says AldertChristmas with food and presents. Many people Schaaphok, Vice President Operations Pandox.find Christmas to be quite obvious, but there are I am Harry, Mr Harry. I am third in the series ofmany families with children that need help, and Corporate Dogs at Pandox. I sometimes go to thethe objective of the project was to highlight the office to guard my position. I start the day by BOOK TUESDAY, 27 NOVEMBER forproblem. “We could not help everyone, but we greeting everyone together with my master, andhelped several families who will no doubt remem- then I go out with Thérèse who is the Corporate PANDOX’ HOTEL MARKET DAYber Christmas 2011 for a long time,” reports those Dog walker. The latest walk was at lunchtime to AT 1PM, AT THE HILTON STOCKHOLM SLUSSEN.who took part in the project. Kungsträdgården when the cherry trees were in full bloom. I am liked at As usual, we will present domestic and international hotel market trends, as well the office because I as a current topic within our industry. contribute with both energy and calm. I also sometimes bark a little at my colleagues! Read more news about Pandox at www.pandox.se

Pandox UpGrade - Nr 1 2012 (Eng)

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