Hotel

Hotel Market Update 2019 H1

Another solid year for the Norwegian hotel market with continued growth

Norway

Occupancy (OCC) fell 0.6 p.p. to 55.3% due to an increase in room capacity

Supply increased 2.8% and the average daily rate (ADR) grew 1.5% and ended at NOK 960. RevPAR ended at NOK 531, up 0.4%. Both the leisure and the business travel market grew. Domestic guest nights were the main driver of growth, but foreign guest nights also contributed.

There has been low activity in the hotel transaction market in Norway in 2018, and the majority of the transactions were smaller hotels.

Oslo

  • As expected, occupancy decreased to 71.3% due to increased room capacity of 1.3%
  • Solid growth of 4.8% in ADR resulting in an increase of 2.2% in RevPAR

OCC decreased by 1.8 p.p. due to strong growth in supply. ADR experienced strong growth for the second year in a row and ended at NOK 1,063 (up 4.8%). Going forward, room capacity will continue to increase with approximately 1,500 new hotel rooms entering the market in 2019 and an expected growth in capacity of 11%.

Bergen

  • RevPAR fell 8.5% to NOK 571, as added room capacity outpaced strong demand growth
  • Room capacity increased by 11.2% in 2018, while number of sold rooms increased by 8.2%, which resulted in decreasing occupancy

OCC fell 1.7 p.p. to 60.2% due to strong supply growth of 11.2%. Demand increased 8.2% and ADR fell 6% to NOK 947, and RevPAR ended at the lowest level in the 21stcentury. Bergen experienced a solid growth of 21.7% in the leisure market.

Trondheim

  • After several years of growth, Trondheim experienced a slight decline in 2018
  • The business travel market was strong in 2018, while leisure experienced a slow-down during the second half
  • OCC remained more or less unchanged

Key performance indicators are more or less unchanged compared to 2017 with OCC up 0.1 p.p. to 66.9%, ADR down 0.6% to NOK 890 and ReVPAR down 0.4% to NOK 595. Domestic and foreign guest nights both decreased.

Stavanger

  • OCC declined as supply increased in 2018
  • ADR experience an increase due to growth in number of sold rooms
  • RevPAR bottomed out in 2016 and stands now at NOK 475

OCC decreased by close to 4% to 52.4% due to an increase in room capacity as Radisson Blu Atlantic Hotel with 364 rooms reopened in 2018. ADR experienced an increase in 2018, while RevPAR is more or less unchanged. Increased optimism in the region indicates a moderate growth going forward.

NB: Comparisons are full year 18 vs full year 17