Eivind Hjulstad of Citybox Hotels on Scandinavian Design, Budget Done Right, and Why the Middle Market Is Running Out of Time

The budget hotel has a reputation problem. Or rather, it had one, until operators like Citybox came along and demonstrated that affordable does not have to mean anonymous, that removing a reception desk does not mean removing the guest experience, and that Scandinavian design principles applied rigorously at the room level can produce something that scores higher on value for money than properties charging twice the price. Eivind Hjulstad, CEO and co-owner of Citybox Hotels, joined Adam Mogelonsky from Bergen on the west coast of Norway to explain how a company that started with a single property in 2006 has grown into a ten-property chain across six countries and why the next few years will more than double that footprint.

The conversation covers the founding philosophy of Citybox and how it emerged from watching check-in kiosks appear in airports, the Scandinavian lease structure that has kept international chains out of the Nordic market, the role of OTAs in building visibility for a brand with no sales department, the Citybox Friends loyalty programme, the data infrastructure that now drives location decisions, the climate change-driven surge in coolcation travel to Scandinavia, the cruise ship overcrowding debate in Bergen, and an ambitious pipeline that includes a 351-room property in Tromsø set to become the largest hotel in northern Norway.

What is Citybox Hotels?

Citybox is a modern budget hotel chain founded in Bergen, Norway in 2006. The concept is built around a clear operating philosophy: identify what guests actually value, remove everything else, and use the savings to keep prices low without compromising on the things that matter. Hjulstad, who joined the company in 2010 and has led its international expansion, describes it simply. "We have taken away those things that we think are not necessary in hotels and focused on what the guests value most in order to have low prices for our customers."

The current portfolio spans ten properties across six countries: two in Bergen, one in Oslo, one in Kristiansand, one in Tallinn, one in Antwerp, one in Helsinki, one in Stockholm, and one in Brussels. A pipeline of six additional hotels, including properties in Tromsø and Copenhagen, will more than double the brand's revenue within the next two to three years.

Design without waste: the Scandinavian approach

"The idea is that everything we have in a hotel room should be in use for something," Hjulstad says. The Scandinavian design tradition - stripping away anything decorative that does not serve a function, and then making every functional element as considered and well-made as possible - maps naturally onto the budget hotel proposition. No decorative pillows. No minibar. No gym. No restaurant. Everything that remains is there because guests use it and value it.

The room size that Citybox has landed on as its standard is approximately 14 square meters for a double room: enough to pass on both sides of the bed and in front of it, but no more. Competitors go as small as eight to ten square meters, but Hjulstad draws a distinction between room-level efficiency and building-level efficiency. "We're talking about efficiency of the whole hotel building, because we have taken away all those things that we think are not necessary in the hotel: gym, bar, restaurants, and so on." The street-facing ground floor, rather than being occupied by a hotel restaurant, is leased out to independent food and beverage operators at market rates, which allows the landlord to achieve comparable overall returns without Citybox needing to cross-subsidize an F&B operation.

The reception-free hotel: born from the airport

Citybox was among the first hotels in the world to remove the reception desk entirely, replacing it with self-service check-in kiosks. In 2006, this was a radical move. Hjulstad is straightforward about where the idea came from: airports.

"We saw it happen in the airports," he says. "When people are getting used to it, they see that this is even more efficient than standing in a queue." The analogy is precise: airports deployed check-in terminals, placed staff beside them initially to guide passengers through, and watched the behavior shift within a few years to near-universal adoption. Citybox followed the same arc: early adopters needed guidance, habitual travelers did not. "When you're starting a hotel from scratch, you can choose to do it."

The operational benefit is significant. In a country with some of the highest labor costs in the world, Citybox's most successful properties run employee costs at around 15% of revenue, roughly half of what a full-service hotel in Norway would typically carry. That cost structure is what makes the pricing model possible.

The Scandinavian lease structure

One of the more revealing sections of the conversation concerns why the major international hotel brands - Marriott, Hilton, and their peers - have such a thin presence in the Nordic market relative to its size and the wealth of its travelers. The answer, in Hjulstad's telling, is the lease structure.

In Scandinavia, hotel real estate is typically structured as a long-term lease of 15 to 20 years with a revenue-based rent component on top of a minimum base rent. When occupancy is high and revenue strong, the landlord benefits proportionally. When performance is weak, the downside is shared. "If we get things around and we have a high occupancy and we deliver a high revenue, then it comes back to the landlord as well." International brands are structured for management contracts and franchise agreements, not for revenue-sharing leases. Committing to a 15 to 20-year lease with revenue participation is a fundamentally different risk profile. "They need to understand that this is our market. This is how the real estate market works. This is how the landlord wants it to be."

The implication for Citybox is structural protection. A competitor that cannot operate under Scandinavian lease terms is a competitor that cannot enter the Nordic market on competitive terms. "If they want to get into Scandinavia, they need to adapt to it."

Distribution: OTAs, Citybox Friends, and the shift to direct

Citybox built its initial distribution through OTAs - a pragmatic choice for a brand with no dedicated sales team and limited marketing budget. The logic was straightforward: OTA visibility is expensive in commission terms, but it generates the guest data and review scores that build long-term discoverability. "I know I shouldn't talk too much positive about the OTAs and the commission you're paying, but we are working every day to change the traffic from the OTAs to our sites."

The brand's consistently high value-for-money scores across review platforms are a key asset in this strategy. Properties that rank at the top of OTA search results for their category and location generate disproportionate visibility without additional marketing spend. "We are all the time high on the list when people are searching for hotels around the city."

The conversion mechanism from OTA to direct is the Citybox Friends loyalty programme - a straightforward scheme that offers members a discounted rate on their next stay and additional perks including a complimentary late checkout until 14:00 for double room guests. "When the guests are coming to our hotel, we communicate with them in different ways in different platforms in order to get them to join Citybox Friends." The rate parity case against Booking.com, which concluded in Europe allowing hotels to offer lower prices on their own direct channels, has made this strategy more viable. "Now we can differentiate ourselves with lower prices, with discounts on our web page or add-ons than we could before."

Technology and the PMS migration

Citybox changed its property management system in 2026, a process Hjulstad describes with the candor of someone who has just been through it. "It's like ripping out the heart of the company and putting in a new one." The company had operated its previous PMS for 16 years, accumulating guest data, traffic patterns, and operational workflows that were deeply embedded in how each property ran. The migration, even with careful testing, produced surprises. "There's a lot of things to think about. A new way of working, obviously, for our employees out there in the hotel and all the integrations that needed to be attached to the new PMS."

The motivation for the change was the acceleration of AI-enabled tools for data analysis and guest communication. The previous system was not built for the kind of real-time data accessibility and integration that current commercial tools require. The new one is. "Data is so much easier now to get and to analyse and to put into action."

AI is already changing how Citybox thinks about market entry decisions. Where previously the brand would assess a potential new city based on qualitative judgment and limited market data, the combination of available demand data, review signals, competitive set analysis, and source market profiling now allows a much faster and more confident assessment of whether the Citybox model fits a given location. "If we go into a city where it's a hundred percent corporate, then we should maybe think twice before we open up that hotel, because it should be a combination of both the corporate and leisure market."

On AI search visibility, Hjulstad sees structural advantages in having a simple and clearly defined brand proposition. "We are not packed in with different layers. We are simple, easy, low price, good location. Those are the things that are very often what you're searching for." A brand that is easy for a human to describe is easy for an AI to surface in response to a relevant query. That clarity is already showing up in traffic data: AI-referred visits have been growing measurably, particularly in the months leading into the 2026 summer season, and TripAdvisor visibility has increased as AI search engines draw on review platform content more heavily.

The Nordic market: coolcations, northern lights, and cruise ship congestion

The Scandinavian travel market has been transformed in recent years by two converging forces: the growing desirability of Nordic destinations for international visitors, and the climate-driven shift in where Europeans choose to spend their summer holidays.

"Coolcation" - a term for choosing a cooler destination specifically to escape summer heat - is no longer a niche behavior. With temperatures regularly exceeding 40 degrees in southern European cities during July and August, travelers from Spain, Italy, and elsewhere are actively redirecting their holidays northward. Bergen, with its 250 days of rain per year, has become an unlikely summer destination for visitors who find the cool, wet Atlantic climate genuinely exotic. "For them, this is exotic: to come here in the summer and experience 12 degrees and rain and wind. On the other side, we had quite a hot summer in Oslo, and travelers are expecting coolcation but it's still as hot as it is in Spain."

The northern end of the market, Tromsø and the high Arctic, benefits from a different demand driver: the northern lights. Hjulstad compares the northern lights to the Eiffel Tower in terms of bucket-list drawing power. "It's so big that you can compare it to the Eiffel Tower in Paris or different attractions that everyone needs to travel to see." The climate dimension adds a layer: Tromsø's summer temperatures rarely exceed 20 degrees, making it an attractive coolcation destination in its own right during the summer months, while its winter offering of the northern lights and Arctic wilderness is genuinely without parallel.

Bergen's position as a major cruise port adds a different complexity. On busy days, two or three cruise ships arrive simultaneously, disgorging passengers into a city of 280,000 people and overwhelming the most popular attractions - the fish market, the Bryggen wharf, the funicular to Mount Fløyen - with queues that stretch for significant distances. "The locals are debating whether they should do something about it, whether they should try to separate it or stop it, because it's quite overwhelming for a small city to have so many tourists in the streets at the same time." Further along the Norwegian coast, in the small fjord villages, the scale becomes even more extreme: a single cruise ship carrying 6,000 passengers arriving in a village of 200 residents.

The pipeline: Tromsø, Copenhagen, and doubling the revenue base

The most significant single project in Citybox's expansion pipeline is the Tromsø property, a 351-room hotel set to open in 2027 as part of the Tromsø Mack Øst development on the former Mack brewery site in the city center, developed by Eiendomsspar. When it opens, it will be the largest hotel in northern Norway. The location on the redeveloped brewery site places it within a broader mixed-use development that will add restaurants, retail, a museum, and a concert hall to the area, creating a new section of city around the hotel rather than slotting it into an existing streetscape.

The rooftop terrace on the 10th floor will offer views of the northern lights in winter and the midnight sun in summer, an asset that few hotels in the world can claim in both directions. Green Key certification is the target from day one. "As long as the northern lights are still going to be there, no one's going to take it away from Tromsø," Hjulstad says. "It's going to be an attractive city to travel for decades."

A 325-room property signed in central Copenhagen rounds out the near-term pipeline. Together with the other projects under development, the pipeline properties will approximately double Citybox's total revenue from its current run rate of above 500 million Norwegian kroner (approximately 45 million US dollars at current exchange rates).

The middle market squeeze and what comes next

Hjulstad's closing thoughts on the industry landscape are among the more pointed observations in the conversation. The segment under the most pressure, in his view, is the traditional four-star hotel - the full-service midscale property that charges a meaningful premium over budget but no longer commands the loyalty or the pricing power to justify it.

"Those so-called four-star hotels, I think they're going to struggle in the future." At one end, technology-enabled budget brands like Citybox are delivering design quality, central locations, and frictionless experiences at a price point that the midscale cannot match. At the other end, luxury properties are absorbing guests willing to pay for genuine service and experience. The middle is being compressed from both sides. "On the other side, I think that high-scale hotels... there is a huge market for them. There are a lot of guests willing to pay for the extra thing."

The next generation's relationship to hotel services reinforces this structural shift. Younger travelers, in Hjulstad's observation, do not need - and in many cases actively prefer not to have - the traditional service infrastructure of a full-service hotel. Self-check-in, an app, a communal kitchen, and a great bed in a central location is sufficient. "The thirties and forties now, they are more than glad to help themselves as long as they have the tool for it, as long as it's provided there, as long as it's easily accessible."

For Citybox, the mandate is to keep building, keep testing, and resist the drift toward the mainstream. "If you don't dare to do something different, then I think it's difficult to succeed," Hjulstad says. "I think budget travelers deserve a proper good budget hotel in the biggest cities in Scandinavia and hopefully in more cities in Europe."