Despite a global industry downturn, Stockholm’s hotel market has experienced only a moderate occupancy decline for the year through October, according to STR Global, the leading provider of market data to the world’s hotel industry.
“Compared with the previous year, the overall decline of 4.5 percent has not been as bad as expected”, said Elizabeth Randall, managing director of STR Global. “The summer months of 2009 actually saw occupancy rise in Stockholm compared with the previous year”. (See chart 1.)
Björn Arnek of Sveriges Hotell & Restaurang företagare, the Swedish Hotel & Restaurant Association explained, “The weakness of the Swedish Kroner has seen an increase in leisure demand compensating for the reduction in corporate business. The twin effect of the depreciation of the Swedish Kroner has been to attract foreign tourists and also persuade Swedes to holiday at home thereby following a general recessionary trend for ‘stay-cations’”.
Nevertheless Stockholm’s hoteliers are feeling the pinch with demand for hotel accommodation declining in line with the 4 percent to 5 percent, per-annum contraction of the Swedish economy coupled with an oversupply of guestrooms. The Comprehensive Hotel Pipeline Report from STR Global shows a further 1,364 guestrooms under construction, in final planning or in planning stages. The current holding of the EU Presidency by Sweden would be expected to add some 50,000 to 80,000 extra roomnights to the country as a whole. However with promotion of the event in the capital subdued, the effect of this rotating position has not made a significant impact on the capital’s hotel trade. As data from STR Global shows, compared to her Scandinavian neighbors, Stockholm has merely an average year-on-year RevPAR performance in local currency terms for the year to 31 October 2009, as seen in chart 2.
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