Market Report 2022

Colliers Market Report 2022

105

Major Copenhagen hotel openings in 2022

Approx number of rooms

Hotel Industrial/logistics Retail Residential Of f ice

186 Ibis Ørestad

632 Scandic Spectrum Kalvebod Brygge

100 Scandic Nørreport

243 25hours - CBD

with a room selling at a 38% lower rate in 2021 than in 2019. However, the situation is different for upscale hotels, where the average room rate has dropped only by 20%. This may partly be explained by the fact that sharp rate cuts may impair the brand value of a hotel, and the hotels therefore omit to adjust room rates to market-conforming levels. In the same period, occupancy rates were identical in the two hotel categories. In the short to medium term, increased competition and lacking demand are bound to pose a serious challenge to hotels, also in 2022, and it is fair to expect room rates and occupancy rates to come under additional pressure in both prime and second ary locations, especially in Copenhagen. Longer term, we antici pate a stabilisation process due to the greatly reduced pipeline of new hotels. Strong operator demand Operator demand for well-located Copenhagen hotels has picked up again, with mainly large-scale operators aware of

the opportunities of entering into new agreements. They are well-capitalised and ready to assume the risk associated with the likely revenue decline in the years ahead. Examples to this effect include Dansk Management Group, taking over Hotel Herman K at Bremerholm in Copenhagen, and operator NH Hotel Group, in September 2021 opening the five-star hotel NH Collection Copenhagen in the former Nordea head office known as Ørkenfortet (“desert fortress”). International players are spearheading the demand for hotel properties, typically in the 5,000-10,000 sq m range in Copenhagen, a key indicator of market expectations pointing towards stabilisation. One of these investors is 25hours Hotel Company, operating in Germany, Austria, Switzerland, and France, and in 2022 plan ning to open its first hotel in Denmark in a former university building in central Copenhagen, with plans of an additional hotel on the Copenhagen islet of Papirøen (“paper island”) in 2024.

Reduced pipeline – but still strong increase in new supply

22,000 2021

2022 1,785

2023 1,000

800

rooms year

2024

Note: Estimated number of new hotel rooms in Copenhagen proper. Source: Byggefakta, Colliers