Market Report 2022

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Hotel - Colliers Market Report 2022

In the pre-COVID years, Danish hotels experienced strong growth, mainly in Copenhagen. The massive inflow of tourists was driving demand, along with an increase in the number of business guests, defined as MICE-related tourism (meetings, incentives, conference, exhibitions), on account of strong economic growth and the successful branding of Copenhagen as a centre for trade and conferences. Golden years ending abruptly The upturn culminated in 2019, when the total number of Copenhagen bed nights ended just above the eight million mark, an all-time high. In addition, hotel newbuilding activity was extensive, adding some 3,600 rooms in Copenhagen in the period from early-2017 to end-December 2019, equivalent to a 23% increase. By comparison, the supply increased by only 2,900 rooms in 2019-2021, driven by developments planned prior to the coronacrisis. Despite the sharp increase in supply, all key performance indicators (KPIs) traced a favourable trend in 2010 2019, with occupancy rates remaining stable at around 80% throughout. On 14 March 2020, Denmark closed its borders, leaving behind an industry largely bereft of its basis of existence. In 2020, the number of bednights hit the lowest level seen in many years, viz. 2.75 million, corresponding to a 66% slump on 2019, a record-breaking year. The situation has gradually improved over the past 12 months. Vaccination programmes have been rolled out in Europe, and as previous restrictions on travels and overnight stays were lifted, KPIs rebounded in all parts of Denmark. Mainly hotels in provincial locations have performed best as they only to a limited degree have been – and still are – relying on business and leisure tourists from abroad, with hotels with spa and wellness facilities benefitting the most from the increase in domestic travellers. In Copenhagen, occupancy rates peaked with an average of 62% in October 2021 due to renewed demand for MICE facilities.