Hospitality Report Sweden - Spring 2026

STABLE MARKET IN AN UNSTABLE WORLD

The Swedish hotel market has moved from a period of recovery into a phase of expansion, driven by strong sector performance, despite elevated financing costs and ongoing economic and geopolitical uncertainty. Tourism continues to grow, creating an increasing demand for hotel rooms in Sweden. The growing tourism is mainly driven by international travellers.

Prior to the pandemic, occupancy levels in both Greater Stockholm and Sweden overall were close to all‑time highs. On a rolling twelve‑month basis, national occupancy largely returned to pre‑pandemic levels in early 2023, before softening again during 2024. The market stabilised in 2025 and, as of February 2026, occupancy showed a marginal year‑on‑year increase of 0.2 percentage points, signalling a gradual recovery.

Average room rates (ARR) have historically tracked inflation closely, albeit with greater volatility. Following the sharp downturn during 2020–2021, the relationship between ARR and inflation has re‑established itself. While inflation outpaced ARR in 2023 and 2024, room rates recovered more strongly in 2025 and surpassed inflation growth. On a rolling twelve‑month basis, ARR increased by 4.6 percent as of February 2026.

RevPAR growth has been driven primarily by higher room rates. Despite weaker occupancy during 2024, RevPAR remained resilient and continued to improve. As of February 2026, rolling twelve‑month RevPAR was up 4.7 percent year‑on‑year, highlighting the pricing‑led nature of the current phase of the Swedish hotel market.

Taken together, these performance trends illustrate a market that has proven resilient, but where future success will increasingly depend on the ability to navigate structural change and shifting demand patterns.

As the world continues to change ever faster, be it because of war, climate change or shifting work trends, it becomes important for the hospitality sector to adapt to those changes equally quickly. This report aims to highlight and decipher some of the metrics that can aid decision makers to navigate these new realities.

INVESTMENT MARKET

RESILIENT VOLUMES IN A CHANGING MARKET

The investment volume directed toward hotel properties has remained relatively stable as a share of Sweden’s total transaction volume in recent years, generally fluctuating between 1.5 and 3.5 percent. In 2025, hotel investments accounted for just over 2.5 percent of the national investment volume, with activity largely shaped by the landmark Midstar–CapMan transaction, which represented a significant share of all hotel‑related deals in Sweden.

In addition, two sizable mixed portfolios, Wihlborgs–Granitor and Castellum–Corem, changed ownership during the period, together amounting to approximately SEK 4.2 billion. While these portfolios contain substantial hotel components, they are not classified as hotel‑specific transactions, indicating that the sector’s broader transactional footprint extends beyond what headline hotel investment volume suggest.

At the European level, Cushman & Wakefield’s EMEA hotel team reports that total hotel transaction volumes exceeded €27 billion in 2025, marking the strongest year since before the COVID‑19 pandemic. More than 1,050 hotels, comprising approximately 133,400 rooms, were transacted, representing a 23 percent increase compared with 2024 and standing 28 percent above the 10‑year average. The UK, Spain and France remained the largest investment destinations, while Denmark, the Czech Republic and Ireland recorded the fastest relative growth among the top ten markets, largely driven by portfolio activity. Improved operating performance across most European destinations has helped restore investor confidence following several challenging years.

Over the past year, several large‑scale hotel renovation projects across multiple Swedish cities have been completed, while the investment market for value‑add and conversion opportunities has continued to expand, adding depth and attracting a broader range of active participants. Looking ahead, the outlook for the Swedish hotel market remains positive. Strong operating performance and sustained momentum in leisure tourism support continued investor confidence, further reinforced by a relatively limited pipeline of new hotel developments. Constrained future supply creates attractive conditions for both core and value‑add strategies, positioning Sweden’s hotel sector well for continued investment activity in the coming years.

STOCKHOLM HOTEL MARKET

GOTHENBURG HOTEL MARKET

MALMÖ HOTEL MARKET

HOTEL MARKET SWEDEN

EUROPEAN OUTLOOK

LEISURE OR BUSINESS, WHAT DRIVES DEMAND?

Over the past two decades, Sweden’s hotel market has undergone a significant structural transformation. In the four largest cities, the number of hotel rooms has more than doubled, driven primarily by new construction, but also by conversions and expansions of existing properties. Over the same period, the office stock has grown at a considerably more modest pace of around 20 percent, illustrating that hotel capacity has expanded far more rapidly than office space. By 2025, Sweden’s four largest cities recorded more international guest nights than before the pandemic. Over the past decade, guest nights from international travellers have increased by almost 90 percent, while domestic guest nights have grown by approximately 65 percent.

It is also evident that cities are shaped by different travel drivers, which strongly influence hotel demand patterns and the relationship between hotel and office markets. Leisure‑oriented destinations such as Barcelona and Prague are able to support extensive hotel capacity without requiring a correspondingly large office market. The opposite pattern is observed in cities where the MICE segment (meetings, incentives, conferences and exhibitions) plays a greater role. Brussels, for example, maintains a disproportionately large office stock relative to its size, while its hotel market remains comparatively limited. Paris has the largest office stock in Europe, whereas London has the highest number of hotel rooms. These contrasts underline the importance of understanding a city’s travel profile when assessing hotel market dynamics and long‑term development prospects.

Barcelona, Amsterdam and Prague form a distinct cluster in the bubble graph, characterised by a high ratio of hotel rooms relative to office stock, more moderate occupancy levels, yet still strong average room rates. These markets are predominantly leisure‑driven, and hotel supply is less closely correlated with office stock. Barcelona stands out in particular due to its exceptionally high tourism intensity. By contrast, London and Paris are primarily driven by business travel and a high willingness to pay, supporting both elevated occupancy and rate performance.

The Nordic cities form another distinct cluster, characterised by a relatively limited hotel room supply compared with the size of their office stock, combined with strong occupancy levels. Within this group, Copenhagen emerges as the most tourism‑driven market. Paris and Stockholm stand out for their combination of high occupancy levels and a low number of hotel rooms per 1,000 square metres of office space. Average room rates are robust in both markets, particularly in Paris. At the same time, Paris exhibits a higher ratio of hotel rooms relative to tourist volumes than Stockholm. Taken together, these indicators point to an underlying shortage of hotel capacity in both cities, suggesting scope for additional hotel development over the longer term.

Within Sweden, Stockholm stands out as the country’s most significant office market and has also demonstrated a stronger post‑pandemic recovery in hotel occupancy than Gothenburg, which is more heavily exposed to leisure demand. Gothenburg has experienced a larger expansion of hotel room supply and is more dependent on concerts and major events to drive demand. While 2023 was an exceptionally strong event year for Gothenburg, delivering notable positive effects on hotel occupancy, subsequent years have not attracted visitors at the same scale.

Overall, the analysis indicates scope for additional hotel development in Sweden’s major cities, particularly in Stockholm and Malmö. At the same time, rising office vacancies create opportunities for office‑to‑hotel conversions, which could both meet hotel demand and help absorb surplus office space.