STR Global reports demand growth in Nordic markets
The Nordic countries of Denmark, Finland, Iceland, Norway and Sweden all showed increases in demand in year-to-September results, according to STR Global, the leading provider of market data to the world's hotel industry. Likewise, the year-on-year change in demand (rooms sold year-to-September) in each of the country's capital cities also was positive, as seen in the chart below.
The 20.4-percent increase in demand recorded by Reykjavik for year-to-September is a reflection of the low base year of 2010, partly due to the disruption to the hotel industry caused by the Eyjafjallajökull volcano. For the same period in 2011, the city recorded the lowest actual average daily rate (ADR) of €87.24 amongst the selected cities. Additionally, Oslo and Copenhagen saw significant increases in demand of 9.6 percent and 10 percent, respectively. Stockholm, meanwhile, reported the lowest growth in demand (+2.2 percent), although it had the highest absolute demand overall.
Growth in demand needs to be viewed relative to changes in supply, however. In Stockholm, for example, supply growth (+3.6 percent) exceeded demand growth and the result was a slight fall in occupancy (-1.4 percent). Nevertheless the city still recorded the highest ADR of €127.68 (see table below). Oslo and Copenhagen both reported supply increases (5.8 percent and 4.8 percent, respectively) well above the average for the region of 2.1 percent. However, the knock-on effects of these increases in supply were not felt in changes in occupancy as demand growth significantly exceeded that of supply.
The STR Global Pipeline Report reflects the strength of the current performance of the Swedish hotel market with over 850 rooms under development in Stockholm and a further 1,400 in the rest of Sweden. Oslo reported over 900 rooms, and a further 2,300 rooms were under development in the rest of Norway. In Finland, hotel development was limited to 442 rooms in Helsinki. Also noteworthy is the fact that no major hotel companies reported any pipeline projects for Iceland.
"The strong economic performances in Finland and Sweden and overall increasing international visitor numbers to the region are reflected in the demand increases for hotel accommodation across the capitals", explained Elizabeth Randall, managing director of STR Global. "Whilst our Forecast Reports show continued growth in demand for the remainder of 2011 of between 4.5 percent and 10.2 percent, a slowdown in demand growth is expected in 2012 to be between -1.2 percent to 2.7 percent."
About STR Global
STR Global provides clients—including hotel operators, developers, financiers, analysts and suppliers to the hotel industry—access to hotel research with regular and custom reports covering Europe, Middle East, Africa, Asia Pacific and South America. STR Global provides a single source of global hotel data covering daily and monthly performance data, segmentation data, forecasts, annual profitability, pipeline and census information. Hotel operators can join the surveys on a complimentary basis and benefit from free industry data. STR Global is part of the STR family of companies and is proudly associated with STR, STR Analytics and Hotel News Now. For more information, please visit www.strglobal.com.