UpGrade: Market information from Pandox, one of Europe's leading hotel property companies.

1. 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 t
6 8 10
Report from Follow our social London
this year’s projects in Kenya in waiting
p. Berlin Conference p. and India p. mode

2. JUST A WORD
Active ownership – a very
engaging 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 rooms
ticipants from most parts of the world and with Who then has the responsibility for managing started to be handed back in April, and the entire
representatives 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 investment
Active asset management which is part of the Company’s DNA. It is also in in Scandic Copenhagen for SEK 150 million, which
One 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, and
the significance of active asset management. In the investment. But this approach does not cut much that was completed now in Q2. The hotel has the
hotel world, asset management implies that some- ice with brand managers, who believe that a pas- ambition to be one of the best meeting hotels in
one has the task of managing and developing the sive owner is a good owner, according to represen- Scandinavia for an international and Scandinavian
hotel 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 will
mated 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 on
sued, how investments should be carried out, and blogs and other social media, that the question is Handball success
how 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 qualified
sic 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 qualified
care of and been a prioritised task for the senior 2012 started relatively stable compared with last during the Easter weekend. After a dramatic match
management 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 to
changed 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 Nissen
ment. On the other hand, there are companies that work with revenue management.
have moved to management agreements, often Pandox continues to develop well in these
with 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 have
sents 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

3. News
Hotel world
JANUARY FEBRUARY MARCH APRIL
Roomkey.com is formed – a new inno- JW Marriott Marquis constructs the Omena Hotels open their first Swedish
vative 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 ten
of 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 expansion
the 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 very
hotel reservations. Roomkey hopes that to be completed in 2014, and will than central locations and low prices. To
hotels’ own reservations will recover The Carlyle Group makes acquisition contain more than 1,600 rooms. solve this equation, staff-intensive areas
market shares from players such as for close to SEK 3 billion. The Ameri- such as the reception have been
hotels.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 of
Balder purchases the five-star hotel Nacka Strand outside Stockholm from Pandox sells Ibis Hägersten in
Marriott Renaissance in central Malmö Vasakronan for SEK 2.95 billion. The southern Stockholm. The business
for SEK 400 million, representing a direct area contains the Hotel J and Restau- and conference hotel is located by the
return of about 6 percent, according to rant J, as well as a large number of E4/E20 and has 190 guest rooms, ten
the 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 its
restaurant. The lease with Marriott is for ence facilities. The acquisition cooperation with Midstar and Event
just over 17 years. The vendor is the embraces a total of 17 properties. Holding. The purchase price amounts
Norwegian company Kristiania, who to SEK 112 million.
have sold after having acquired the hotel
property only in February last year from Pandox sells the hotel property Elite
the crisis-hit Faktor Eiendom, also from Stora Hotellet in Linköping. The hotel
Norway. Balder now owns ten hotel has 92 rooms, restaurant, as well as
properties 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 northern
Carlson and Rezidor form the Carlson N
­ orway’s tallest buildings with 16 floors. New Thon Hotel in Brussels. Thon
Rezidor Hotel Group. Carlson, a global The hotel has 148 rooms, a restaurant Hotel EU is a 4-star hotel with 405
travel and hotel company, and the on the ground floor and the Sky Bar with rooms located in the EU part of the city
Rezidor 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 EU
announce that they have formed the is the fifth Thon Hotel in Brussels, which
Carlson Rezidor Hotel Group for joint makes the group one of the largest
investments 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 from
Petter Stordalen’s new hotel with 500 Midroc’s planned establishment of the the beginning of the last century with
rooms in the old post house in World Trade Center Lund, where Midroc just twelve rooms. The target group is
Drottningtorget in Gothenburg was is developing a new area with offices, wealthy travellers who wish to have the
inaugurated with a large and spectacu- an office hotel and a hotel. The new best, but are tired of large impersonal
lar 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

4. Focus on the market
Uncertainty leads to
different patterns in
the hotel market
DIFFERENT TRENDS IN THE WAKE OF UNSTEADY GLOBAL ECONOMY
The first quarter 2012 started relatively stable and the beginning of 2012. However, 2012 started with good growth. On the other hand, Oslo and
compared with last year, driven primarily by with a slight increase in the rate of growth for the Stockholm had relatively weak Q1 reports while
prices 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 a
meetings in the first quarter, and subsequently increase in the rate of growth. Boston, Chicago, growing opportunistic customer pattern particularly
lower occupancy. Considerable uncertainty still Los Angeles, San Francisco and Miami have all within the meeting and event segment, which
prevails 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 fewer
half-year is expected to be weaker, with Uneven picture in Europe guests from the PIIGS countries and France, as well
improvements 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 sustainable
Signs of strength in the US, solutions to the problems in the debt-ridden euro- Stockholm and Gothenburg
but 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 prices
strength in the country’s economic trends. Stock which has led to reduced risk aversion in the finan- and volumes in January-February, although better
markets have risen during the year so far in tandem cial markets, and less concern that the Greek crisis in March. These relatively weak developments are
with the publication of a number of positive macro- will spread to the rest of southern Europe. primarily due to a high proportion of new capacity
economic indicators. Unemployment has fallen European developments in the hotel market are in 2011 (Scandic Grand Central, Scandic Victoria
slightly, the Purchasing Manager Index shows cau- more uneven than in the United States. Consider- Tower) that dampened the market. Additional
tious optimism, and industrial sales have increased. able differences prevail between countries and capacity continues both this and next year with the
However, there are several worrying indicators that regions, and there are strong fluctuations from one opening of Clarion Arlanda and the expansion of
make 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, and
100 percent, gasoline prices are at record levels, have the strongest trends while southern and west- few really large events are booked compared with
and the proportion of properties where the mort- ern Europe have declined slightly. 2010 and to a certain degree 2011. The number of
gage 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 rolling
country’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. The
still 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 and
United States had strong and even RevPAR- demand is good. There are however certain black that there is reason to believe that rates, which
growth 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 last
increase of 8 percent – divided equally between year. It is however worth noting that last year
price 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 the
the 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 available
4 market information from Pando x

5. The market is also feeling lower economic activity. erable potential in consumption, unemployment SCANDINAVIAN OVERVIEW
RevPAR 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 foundations
months. 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 30
Additional capacity in Oslo a weak fourth quarter in 2011. Developments are 700
The Norwegian economy is developing positively driven primarily by stable prices and that occu- 25
600
with strong domestic demand and increased pancy has started to rise after low levels at the end
20
employment. The Norwegian krona is however still of last year. Only limited new hotel capacity is 500
weak 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, 300
marily to the market being compared with strong RevPAR was +3 percent on a rolling 12-month 10
200
last-year figures. The skiing world championships basis and +/–0 percent for rolling 3 months.
5
held in January–February 2011 meant that large 100
parts of Oslo were fully booked. A significant pro- Helsinki – good outlook for 2012 0 0
portion 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
20
market last year, including the opening of Scandic with an anticipated increase in exports in the second
RevPAR, SEK
Vulkan 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 is
QH 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 a
as 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 16
on a rolling 12-month basis, and –10 for rolling 3 Several events imply continued good trends in 14
600
months. Analysts believe however that the underly- 2012 for Helsinki, including the ice-hockey world
12
ing demand and market are still stable. championships, global capital for design, as well as 500
an increasing number of tourists from Russia, the 10
400
Towards brighter times in Copenhagen United States and Japan. 8
300
RevPAR
The Danish economy is showing several signs of 6
going 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 Pandox
market information from Pandox 5

6. Market overview Q1/2012
Pandox market barometer
MARCH 2012 The market barometer shows the situation of selected cities economic climate, how well-developed the hotel market is, as well as how
in 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
Helsingborg
Lund, after a strong 2011 with good spring pared with last year. The positive development As in Stockholm, January-February were weaker
months, 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-year
has had stable developments in the last 12 growth rate. and additional capacity in the first quarter 2012
months, but the short trend shows a weakening Stockholm experienced uneven developments that dampened the market, which is also feeling
and 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 have
continues 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 trends
was 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 than
over 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, due
trend that is increasing downwards. The first quar- Uppsala is currently developing weakly. Both primarily to prices. Trends in Luleå and Sundsvall
ter 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 and
partly 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 market
The year’s hotel conference in Berlin
The 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 increasingly
The 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 (which
than 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 hotel
present. 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

7. 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
Berlin
London saw continued stable hotel developments equally by prices and occupancy. In Copenhagen, now overtaken London. Several other eastern
in the beginning of the year, and landed at +3 per- developments are driven mainly by stable prices, European cities are performing strongly, including
cent in the first quarter, driven primarily by rising although occupancy has started to rise from low Moscow, Tallinn and Budapest. The financial city
average 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, with
year, 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 both
quarter and closed with +3 percent growth, driven increased additional capacity. in price and volume while Amsterdam, which was
by 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 both
March, 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 have
The significance of the increasing middle-class in growth regions. It was easy for members of the ownership is required to maintain profitability, the
China and India was emphasised: together, these audience to believe that they were competing with positions have changed and the owners’ demands
countries 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 up
reduced 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 profitable
India. 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 from
drawn-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 brand
present, 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 brand
present their forthcoming hotel projects in different that more and more owners understand that active name is limited.
market information from Pandox 7

8. ThEMe social projects
… Pandox Youth Handball
Movement Follow our projects and development at www.pandox.se/foretagsansvar
Last autumn, Pandox established the Pandox mitment and good cooperation, we are nonethe- young people (spread roughly equally between girls
Youth Handball Movement project together with less pleased when we look back over the project’s and boys), who train regularly 2–3 times each week
Partille 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 a
young people having meaningful and comprehen- have strived to obtain and set up as targets in the league where children and young people can play
sive leisure time through sport and handball train- project plan: against each other in different age groups and
ing. Based on this foundation, the objective is to – The number of members is growing and we degrees of difficulty. A league did not exist before
also contribute later with education regarding dis- have an organised administrative staff and strong and we believe that it can be a success factor for
ease 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 been
cessed. 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 app
8 market information from Pando x

9. Five questions
camps for trainers and coaches of young people were held for two weeks in
February. The participants learned about handball theory, how to handle inju-
ries, bandage feet and fingers, pump balls, as well as discussing good
sportsmanship. But perhaps the most appreciated was nonetheless to try
out 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 Eriksson
teams and more than 1,100 players taking part, which was a record for all the
years the tournament has been held.
Hotel manager of the Hilton
The participants had very different levels, but all made progress in a short ­Stockholm Slussen
time, according to head coach Lisette Norén from IK Sävehof. Many of the
participants had to walk a long way to take part in the training, up to one hour
in each direction. The training camps drew a lot of attention in Nyeri, and
there are considerable expectations and hopes for recurrent camps. The
camps 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 in
conjunction 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 attitudes
among 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-
1
ects are also being formulated, including starting to award grants in the Stockholm received considerable new capacity in 2011
autumn 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 believe
training camps and tournament were in progress, and to see the Kenyan joy that predictability is lower now than previously. How do you
and 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 way
and solidarity, and we have experienced the Kenyan young people as being
as before. Things move along however, and the year will be fine for
incredibly open and optimistic regarding their situation and future. This has
Stockholm, although I believe that the market will be slightly poorer
strengthened 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 many
enables people to choose a cheaper alternative of a product or completely
skilful employees. Simultaneously, there would be economies of scale
decline 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
5
coffee and instead send a small amount to charity And finally, how come you have your own bees
with 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 wanted
interest, 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

10. 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 team
show 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 from
New York has more than doubled since 2005,
summer months – despite the European vacation the Olympics and believes that the Olympic weeks
within an increase from 6 million in 2005 to
period, less business travel, and that tourists to a combined with the Diamond Jubilee and Farnborough
almost 13 million in 2011. Among Nordic tourists,
certain degree prefer sea and sand instead of cit- will lead to a buoyant summer with a particularly
Swedes 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 of
economy. Last year, tourists spent USD 32 billion
pic Games from 27 July to 12 August and the Para- large leisure events deterring business from London
and 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 also
The 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 still
with the latest. The concept is based on new,
below the forecasted level and that expectations are
often rather odd and different hotels that “pop
High expectations and a lot happening unrealistic. One underlines in particular the prevailing
up” in the market for a short time, only to disap-
London’s hotels have considerable expectations economic climate, that room occupancy figures come
pear 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 have
trend 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 other
Waterloo. 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 soften
and will remain for the rest of the year. Another
– have been noted, especially during the inauguration their demands, can also be interpreted as meaning that
example 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 the
hundred 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 will
airport
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 we
airport 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, report
equivalent 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 19
million passengers. The new airport will open up
a new opportunity for marketing Berlin both as a
tourist and a conference city. Forecasts up to
2020 show a 40-percent increase in the number
of overnight stays – and apart from all of the well-
known tourist attractions, visitors are also
attracted by good value for money in Berlin.
(Sources: Vagabond, dn.se, svd.se)
10 market information from Pando x

11. CITY in CENTRE
Wonderful
Copenhagen Scandic Copenhagen
Photo montage
Copenhagen is very much an international hotel cycle to the sanctuary of Christiana with its Pusher Copenhagen
city, and close to 60 percent of all hotel guests Street and the renowned, liberal and permissive
come from another country. Demand for the lifestyle. Then finish off with a cold beer at a pave- HOTEL AND TOURISM DATA
hotel 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 guests
destination in Scandinavia, proximity to the and cycle paths.
Kastrup International Airport, and considerable There is also a very broad choice of restaurants
business travel. in Copenhagen with good quality, including Noma
There was significant capacity addition in 2011 that has been voted several times as the world’s
with several large new hotels, including the Bella Sky best restaurant. Nightlife offers all imaginable kinds
Comwell Hotel with a unique award-winning design of clubs, and for those who want to rest their feet
and 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 that
expected 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 rooms
Tivoli, 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, Scandic
ferent 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 million
with 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 or
The major Shark project continues Scandic Upplands Väsby – first of the highway hotels
The 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 concept
ing and development of 38 existing Scandic hotels in and to invest in new concepts for the city-centre
the 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 and
Continental and Hilton Strand in Helsinki, and the trends. This also implies that the history of Scandic
KNA hotel in Oslo. The framework of the project was and each respective highway hotel be integrated in
adopted 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 social
investment, identifying purchasing synergies, and meeting places be created, and that the rooms be
getting really started. given new complete furnishings and design.
market information from Pandox 11

12. 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 Hyatt
Hyatt Regency Montreal has received an award for
its excellent hospitality. It is the 26th year that
industry and commerce in the region receives
awards 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 has
public 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 Standard
Good 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 and
Just 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 able
poor families the chance to have a more pleasant
to fully benefit from his knowledge,” says Aldert
Christmas 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 of
many families with children that need help, and Corporate Dogs at Pandox. I sometimes go to the
the objective of the project was to highlight the office to guard my position. I start the day by
BOOK TUESDAY, 27 NOVEMBER for
problem. “We could not help everyone, but we greeting everyone together with my master, and
helped several families who will no doubt remem- then I go out with Thérèse who is the Corporate PANDOX’ HOTEL MARKET DAY
ber 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