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The hotel industry’s major meeting place, the Inter-national Hotel Investment Forum (IHIF), and equiva-lent to MIPIM, is tradition-ally held in the first week

of March. The meeting drew close to 2,000 par-ticipants from most parts of the world and with representatives from all large companies.

Active asset managementOne of the questions that attracted attention was the significance of active asset management. In the hotel world, asset management implies that some-one has the task of managing and developing the hotel operations – a complex and often underesti-mated task. One must understand a hotel’s local position, how product development should be pur-sued, how investments should be carried out, and how operations should be managed. All with the objective of optimising cash flow and thereby securing the value of the hotel property.

The principal part of asset management is clas-sic hotelier work, along with a certain talent for strategic thinking! Historically, such has been taken care of and been a prioritised task for the senior management of hotel companies, where operative expertise has been a hallmark. This pattern has changed in recent years. On the one hand, hotel companies often with northern Europe as their base, work with a business concept that uses rental lease agreements. This automatically puts focus on the operative aspect and creates good operational productivity. In general, one can say that these companies are good at asset manage-ment. On the other hand, there are companies that have moved to management agreements, often with North America as their base. These compa-nies are controlled by brand managers, where the priority is to implement standards and measures to establish and embody the brand name. This repre-sents a shift in strategy and expertise that essen-

tially implies that companies will leave their role as operator and gradually become brand and distri-bution companies. Roughly like a large EuroBonus company. These are the principal reasons why asset management is becoming more important, and perhaps be totally decisive with a partner that can actuate value-development.

Who then has the responsibility for managing and developing the hotel properly? From Pandox’ aspect, we have always hailed active ownership, which is part of the Company’s DNA. It is also in fact quite evident because we stand for most of the investment. But this approach does not cut much ice with brand managers, who believe that a pas-sive owner is a good owner, according to represen-tatives in one of the debates where I took part. For-tunately, the audience did not agree with this view-point. I have also seen, through comments on blogs and other social media, that the question is frequently discussed and that most people are sceptical to allowing hotel companies hold the ini-tiative with regard to profitability and value-devel-opment. The debate will no doubt continue.

Relatively stable start to 20122012 started relatively stable compared with last year, which was better than expected. RevPAR is being primarily driven by prices, while volumes are declining in many markets. One of the reasons for lower occupancy is fewer large meetings, which is a normal reaction in view of the economic uncer-tainty that prevailed during the autumn. Many peo-ple are waiting or postponing their conferences. But despite this situation, the sector has suc-ceeded in raising prices, thanks to all those who work with revenue management.

Pandox continues to develop well in these somewhat uncertain surroundings. Revenues, cash flow and profitability are in line with last year. Pandox’ major challenge lies in planning and carry-ing out the considerable investments that we have adopted. All in all, we estimate that we will invest

more than SEK 2 billion over the next three years in upgrading existing hotels. The largest project is the development of 38 Scandic hotels for a total of SEK 1.6 billion, of which Pandox will stand for two-thirds. Another major investment is the develop-ment of The Hotel, Brussels, which is being reposi-tioned and totally refurbished. The first rooms started to be handed back in April, and the entire product development will be completed by the end of the year. Another large project is the investment in Scandic Copenhagen for SEK 150 million, which we are sharing in equal parts with Scandic, and that was completed now in Q2. The hotel has the ambition to be one of the best meeting hotels in Scandinavia for an international and Scandinavian public. Go and have a look. We believe that you will like what you see!

Handball successFor those who may have missed the announce-ment: Swedish handball will be going to the Olym-pic Games – both the women’s and men’s squads!! The women’s squad became directly qualified through their second place in the European Cham-pionships one year ago, while the men qualified during the Easter weekend. After a dramatic match with a rock ’n’ roll atmosphere in the stands, Swe-den beat Macedonia by 27–23. So now it’s time to pack the bags for our colleague Staffan & Co! Fantastic!! Very best regards,Anders Nissen

Active ownership – a very engaging question!

JUSt a WOrD

Address: Pandox AB P.O. Box 15 SE-101 20 Stockholm, Sweden Tel.: +46 (0) 8 506 205 50 Fax: +46 (0) 8 506 205 70 E-mail: info@pandox.se

Visiting address: Vasagatan 11, 9th floor, Stockholm

Graphic design and production: Hallvarsson & Halvarsson

Photos: Ulf Blomberg, Peter Hoelstad, Getty Images, Shutterstock, iStockphoto et al.

Printing: TMG Sthlm, May 2012. May be reprinted only with the permission of Pandox.

Cover photo: Scandic Copenhagen.

Upgrade can be ordered from Pandox or read at www.pandox.se

Pandox Upgrade. Market information from Pandox – published approximately three times a year.

Editors: Anders Nissen, Marika Hilldoff, Annelie Sundström Aguilar

2 MARKET INFORMATION FROM PANDOx

NewsHOteL WOrLD

JANUARY

Roomkey.com is formed – a new inno-vative search engine for hotels and hotel reservations. The founders are a group of leading hotel companies and the objective is to offer travellers direct access to a broad network of hotels over the whole world with flexibility, precision and quality assurance when making hotel reservations. Roomkey hopes that hotels’ own reservations will recover market shares from players such as hotels.com, expedia.com etc.

Balder purchases the five-star hotel Marriott Renaissance in central Malmö for SEK 400 million, representing a direct return of about 6 percent, according to the purchaser. Apart from the hotel, the property also contains the TGI Friday’s restaurant. The lease with Marriott is for just over 17 years. The vendor is the Norwegian company Kristiania, who have sold after having acquired the hotel property only in February last year from the crisis-hit Faktor Eiendom, also from Norway. Balder now owns ten hotel properties further to the acquisition.

Carlson and Rezidor form the Carlson Rezidor Hotel Group. Carlson, a global travel and hotel company, and the Rezidor Hotel Group, one of the world’s fastest growing hotel companies, announce that they have formed the Carlson Rezidor Hotel Group for joint investments and partially joint marketing.

Clarion Post opens in Gothenburg. Petter Stordalen’s new hotel with 500 rooms in the old post house in Drottningtorget in Gothenburg was inaugurated with a large and spectacu-lar party. The new hotel has implied investments of around SEK 1.4 billion for the owner, Home Properties.

MARCH

JW Marriott Marquis constructs the world’s highest hotel building in Dubai, composed of two towers of 355 metres in height and thereby only 26 metres short of the Empire State Building in New York. The first part of the building will open already at the end of the year. The whole hotel is expected to be completed in 2014, and will than contain more than 1,600 rooms.

New landmark in Narvik – Rica Hotel Narvik. The hotel is one of northern Norway’s tallest buildings with 16 floors. The hotel has 148 rooms, a restaurant on the ground floor and the Sky Bar with panoramic view from the terrace on the top floor.

New exclusive 12-room hotel opens in Stockholm. The new hotel, Ett Hem, opens at Balders Hage in Lärkstan. Ett Hem is a well-furnished home from the beginning of the last century with just twelve rooms. The target group is wealthy travellers who wish to have the best, but are tired of large impersonal luxury hotels.

FEBRUARY

The Carlyle Group makes acquisition for close to SEK 3 billion. The Ameri-can Carlyle Group is one of the world’s largest fund managers, and now acquires the entire commercial area of Nacka Strand outside Stockholm from Vasakronan for SEK 2.95 billion. The area contains the Hotel J and Restau-rant J, as well as a large number of workplaces, homes, schools, restau-rants, as well as exhibition and confer-ence facilities. The acquisition embraces a total of 17 properties.

Pandox sells the hotel property Elite Stora Hotellet in Linköping. The hotel has 92 rooms, restaurant, as well as conference and banquet facilities. The purchaser is the Mikael Åhman family, and possession took place on 15 February 2012.

Start of building of the Park Inn by Radisson Lund. The hotel is part of Midroc’s planned establishment of the World Trade Center Lund, where Midroc is developing a new area with offices, an office hotel and a hotel. The new ten-storey hotel will contain 9,300 m2, 192 double rooms, conference facilities, a restaurant for 150 persons, as well as a bar/lounge area and fitness centre. The hotel will be operated by the Winn Hotel Group and will open in the beginning of 2014.

APRIL

Omena Hotels open their first Swedish hotel in Stockholm. The Finnish com-pany Omena Hotels currently has ten hotels in Finland and one in Denmark. The opening of the new hotel in Stock-holm is the first in a planned expansion in Sweden. The hotel chain has a busi-ness concept based on offering very central locations and low prices. To solve this equation, staff-intensive areas such as the reception have been removed in the concept.

Pandox sells Ibis Hägersten in southern Stockholm. The business and conference hotel is located by the E4/E20 and has 190 guest rooms, ten conference rooms, restaurant and bar. The purchaser is Sveafastigheter via its cooperation with Midstar and Event Holding. The purchase price amounts to SEK 112 million.

New Thon Hotel in Brussels. Thon Hotel EU is a 4-star hotel with 405 rooms located in the EU part of the city with walking distance to all major Euro-pean institutions. The Thon Hotel EU is the fifth Thon Hotel in Brussels, which makes the group one of the largest players in the city.

MARKET INFORMATION FROM PANDOx 3

The first quarter 2012 started relatively stable compared with last year, driven primarily by prices while volumes are declining in many markets. The uncertain global economic situa-tion in the autumn was reflected in fewer large meetings in the first quarter, and subsequently lower occupancy. Considerable uncertainty still prevails regarding the global economy – both upwards and downwards. In general, the first half-year is expected to be weaker, with improvements in the autumn.

Signs of strength in the US, but a long way to goThe United States continues to show signs of strength in the country’s economic trends. Stock markets have risen during the year so far in tandem with the publication of a number of positive macro-economic indicators. Unemployment has fallen slightly, the Purchasing Manager Index shows cau-tious optimism, and industrial sales have increased. However, there are several worrying indicators that make optimists waver, and that show that the way back will still be long – the housing market is still weak, the country’s public debt constantly exceeds 100 percent, gasoline prices are at record levels, and the proportion of properties where the mort-gage exceeds the market value is increasing again. Labour market indicators have also been poorer recently.

The American hotel market basically follows the country’s economic situation, and has seen and is still seeing good trends. In the full-year 2011, the United States had strong and even RevPAR-growth where each quarter reported an improve-ment of around 8 percent compared with the previ-ous year. The positive trend continued in the first quarter 2012, which also closed with a RevPAR increase of 8 percent – divided equally between price and occupancy.

New York has developed essentially in line with the country’s average, both for the full-year 2011

Uncertainty leads to different patterns in

the hotel marketDIFFERENT TRENDS IN THE WAKE OF UNSTEADY GLOBAL ECONOMY

FOCUS ON tHe Market

and the beginning of 2012. However, 2012 started with a slight increase in the rate of growth for the city compared with the average for the country, which is more stable. Several other large American cities are also showing positive trends and an increase in the rate of growth. Boston, Chicago, Los Angeles, San Francisco and Miami have all reported double-digit growth in the first quarter.

Uneven picture in EuropeThe financial markets in Europe are still fragile. A lot of work remains before long-term and sustainable solutions to the problems in the debt-ridden euro-countries are in place. Very large amounts have however been injected into the banking system, which has led to reduced risk aversion in the finan-cial markets, and less concern that the Greek crisis will spread to the rest of southern Europe.

European developments in the hotel market are more uneven than in the United States. Consider-able differences prevail between countries and regions, and there are strong fluctuations from one month or even weeks to another. The first quarter shows, not completely unexpectedly, that growth markets in eastern Europe and the Baltic States have the strongest trends while southern and west-ern Europe have declined slightly.

Stable in LondonLondon saw continued stable trends in the begin-ning of the year, and the first quarter had growth of 3 percent. In view of that 2011 was a record year, this is a good sign and shows that underlying demand is good. There are however certain black clouds regarding the British economy. In general, a slow recovery is anticipated further to bringing the budget back into balance, and that unemployment is very high.

Difficult to forecast in the Nordic RegionNordic countries saw different trends in RevPAR in the first quarter. The Helsinki market was stable

with good growth. On the other hand, Oslo and Stockholm had relatively weak Q1 reports while Copenhagen was in line with last year.

In general, trends are moving towards increas-ingly shorter lead-times. Many markets are seeing a growing opportunistic customer pattern particularly within the meeting and event segment, which means difficulties in planning manpower and fore-casting occupancy. The first quarter had fewer guests from the PIIGS countries and France, as well as slightly lower demand from the finance sector.

Stockholm and GothenburgStockholm experienced uneven trends last year. 2012 started cautiously with slightly lower prices and volumes in January-February, although better in March. These relatively weak developments are primarily due to a high proportion of new capacity in 2011 (Scandic Grand Central, Scandic Victoria Tower) that dampened the market. Additional capacity continues both this and next year with the opening of Clarion Arlanda and the expansion of Quality Hotel Globe.

The Stockholm year is deemed to be an inter-mediary year regarding fairs and conferences, and few really large events are booked compared with 2010 and to a certain degree 2011. The number of business visitors continues however to be strong, and 2011 was a record year with a total of 10.6 mil-lion commercial room nights. At the end of March, RevPAR for Stockholm was +1 percent on a rolling 12-months basis and +/–0 for rolling 3 months. The short trend shows that there is less demand and that there is reason to believe that rates, which have been at stable high levels for some time, could start to decline.

The Gothenburg market also developed rela-tively weakly in the first quarter compared with last year. It is however worth noting that last year Gothenburg had a record strong first half-year, and that new capacity came to the city through the opening of Clarion Post with 500 rooms in January.

Explanations:

RevPAR = Income per room available

4 MARKET INFORMATION FROM PANDOx

The market is also feeling lower economic activity. RevPAR in the municipality of Gothenburg at the end of March was +/–0 percent on a rolling 12-month basis and –2 percent for rolling 3 months. The short trend thereby shows a decline.

Additional capacity in Oslo The Norwegian economy is developing positively with strong domestic demand and increased employment. The Norwegian krona is however still weak further to fewer exports.

The hotel year started relatively weakly, due pri-marily to the market being compared with strong last-year figures. The skiing world championships held in January–February 2011 meant that large parts of Oslo were fully booked. A significant pro-portion of new capacity was also added to the market last year, including the opening of Scandic Vulkan in central Oslo with 149 rooms. Additional capacity will continue in 2012 with the new hotels QH Hotel Arena, Comfort Grand Central and Scan-dic Fornebu, which are expected to dampen the market. However, additional capacity will be limited as of 2013 and onwards.

At the end of March, RevPAR was –5 percent on a rolling 12-month basis, and –10 for rolling 3 months. Analysts believe however that the underly-ing demand and market are still stable.

Towards brighter times in CopenhagenThe Danish economy is showing several signs of going towards brighter times. There exists consid-

erable potential in consumption, unemployment has peaked, and housing prices are back to pre-crisis levels.

The hotel market also shows good foundations for continued development. The beginning of 2012 was stable and the market has recovered well after a weak fourth quarter in 2011. Developments are driven primarily by stable prices and that occu-pancy has started to rise after low levels at the end of last year. Only limited new hotel capacity is expected in 2012, which could strengthen even more a continuation of good trends. In March, RevPAR was +3 percent on a rolling 12-month basis and +/–0 percent for rolling 3 months.

Helsinki – good outlook for 2012The outlook for the Finnish economy has improved with an anticipated increase in exports in the second half-year. The Helsinki hotel market had a strong end to 2011 and a good start for 2012. The market is coming however from low levels, with last year see-ing an unusually weak conference year. At the end of March, RevPAR was close to +4 percent on both a rolling 12-month and 3-month basis. Growth is driven in equal parts by prices and occupancy.

Several events imply continued good trends in 2012 for Helsinki, including the ice-hockey world championships, global capital for design, as well as an increasing number of tourists from Russia, the United States and Japan.

MARKET INFORMATION FROM PANDOx 5

Scandic Malmen, Stockholm

RevPAR, NOKAvailable room nights, thousands/day

NOK

Source: MIS Pandox

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

0

100

200

300

400

500

600

700

800

0

2

4

6

8

10

12

Thousands/day

Rev

PAR

Oslo (total approx. 60 hotels)

RevPAR, EURAvailable room nights, thousands/day

EUR

Source: STR Global, MIS Pandox

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

0

10

20

30

40

50

60

70

80

0

1

2

3

4

5

6

7

8

9

Thousands/day

Rev

PAR

Helsinki (total approx. 50 hotels)

RevPAR, DKK

Available room nights, thousands/day

DKK

Source: STR Global

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

0

100

200

300

400

500

600

700

0

2

4

6

8

10

12

14

16

Thousands/day

Rev

PAR

Copenhagen (total approx. 80 hotels)

RevPAR, SEKAvailable room nights, thousands/day

SEK

Source: MIS Pandox (SCB)

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

0

100

200

300

400

500

600

700

800

Rev

PAR

0

5

10

15

20

25

30

Thousands/day

Greater Stockholm (total approx. 280 hotels)

SCANDINAVIAN OVERVIEW

6 MARKET INFORMATION FROM PANDOx

The year’s hotel conference in BerlintHe Market ON tHe Market

MARCH 2012 The market barometer shows the situation of selected cities in the economic cycle. The appraisal is based on an analysis of each city. Con-sideration is given to macro-developments, trends within the hotel industry, the

economic climate, how well-developed the hotel market is, as well as how developed and liquid the hotel property market is. Note that the hotel econo-mic cycle is the same in pattern, but different in time.

SWEDEN

PEAK

Luleå, Umeå downturn

Uppsala, Lund, stockholm, Jönköping

growth karlstad, sundsvall

lEvEl-off Helsingborg

Lund, after a strong 2011 with good spring months, started to decline in the first quarter 2012. The short trend is downward and RevPAR is –5 percent on a rolling 3-month basis. Helsingborg has had stable developments in the last 12 months, but the short trend shows a weakening and decreasing growth rate, with declining revenues.

Malmö developed negatively in 2011. The trend continues although volumes have now started to rise and the growth rate for the first quarter 2012 was in line with last year’s levels.

Jönköping has seen volatile developments over the last 12 months, and is now in a negative trend that is increasing downwards. The first quar-ter of the year fell by more 11 percent, which was partly due to several one-off events last year. Karl-stad developed at a higher pace, and the first quarter saw primarily occupancy doing well com-

pared with last year. The positive development continued during the whole of 2011 and RevPAR was close to 12 percent on a rolling 12-month basis. The short trend shows however a weakening growth rate.

Stockholm experienced uneven developments last year. 2012 started cautiously with slightly lower prices and volumes in January–February, but with growth and better trends in March. These relatively weak developments are primarily due to a high pro-portion of new capacity in 2011. RevPAR for Stockholm is 1 percent up on a rolling 12-month basis, although back to last year’s levels for rolling 3 months. The short trend shows a slight decline.

Uppsala is currently developing weakly. Both long and short trends show a downturn driven pri-marily by falling prices.

Gothenburg was uneven in 2011 with a record-strong first quarter and a weaker second half-year.

As in Stockholm, January-February were weaker months while March showed stronger trends. Rev-PAR was –2 percent on a rolling 3-months basis, although this is compared with a strong last-year and additional capacity in the first quarter 2012 that dampened the market, which is also feeling lower economic activity. The short trend is a decre-asing downturn.

The hotel markets in northern Sweden have developed well in general. Luleå, Umeå, Kiruna, Östersund and Sundsvall all have positive trends both in the long and short-term. Umeå is currently developing strongest with a RevPAR of more than +16 percent for both rolling 12 and 3 months, due primarily to prices. Trends in Luleå and Sundsvall are also being driven by prices, while Kiruna and Östersund are driven by occupancy.

The tourist industry increasingly significant for the global economy.The first day of the conference saw an interesting talk by David Scowsill, Presi-dent & CEO of the World Travel and Tourism Council (WTTC). Fascinating statis-tics were presented, showing that the tourist industry is becoming increasingly significant for the global economy, including:• The tourist industry represents 9% of the world’s overall GDP growth (which

can be compared with the finance sector’s 11% and the car industry’s 8%)• That the forecast for 2022 shows that 1 of 10 jobs will be within the hotel

and hospitality sector.Interesting!

Pandox market barometerMarket OvervIeW Q1/2012

AbAting downturngothenburg, Malmö

The International Hotel Investment Forum, IHIF, is the hotel indus-try’s equivalent to the MIPIM property fair and the major annual meeting place for our sector traditionally held in the first week of March. This year was the 15th time the forum has been arranged. The meeting attracted 1,700 participants with representatives from all large companies from 57 countries. There were more participants than last year, but still below the pre-finance-crisis record years. As in previous years, there were very few Scandinavian hotel owners present. But Pandox of course was well-represented and took part in several debates. Here is our report…

MARKET INFORMATION FROM PANDOx 7

KEY TO THE DIFFERENT PARTS OF THE HOTEL ECONOMIC CYCLE:

GROWTH Occupancy rises relatively quickly and prices start to increase. High potential and low risk.

PEAK Occupancy rises/levels off and prices increase quickly. Good potential and low risk that gradually rises to high risk.

DOWNTURN Occupancy and prices fall further to lower demand or over-capacity. Low potential and high risk.

ABATING DOWNTURN Volumes become more stable – continued pressure on prices. Certain potential and high risk.

LEVEL-OFF Occupancy rises with unchanged prices. High potential with declining risk.

PEAK

London, Paris, warsaw

downturnZürich, Oslo

growth Helsinki, copenhagen, Barcelona, Moscow

lEvEl-off Berlin

INTERNATIONAL

London saw continued stable hotel developments in the beginning of the year, and landed at +3 per-cent in the first quarter, driven primarily by rising average rates. In view of that 2011 was a record year, this is a good sign and shows that the under-lying demand is good. Berlin also showed a good quarter and closed with +3 percent growth, driven by occupancy while prices continued to decline.

Helsinki’s hotel market had a strong end to 2011 and a good start to 2012. At the end of March, RevPAR was up by close to +4 percent for both rolling 12 and 3 months. Growth is driven

equally by prices and occupancy. In Copenhagen, developments are driven mainly by stable prices, although occupancy has started to rise from low levels. RevPAR for the quarter closed at +/–0 com-pared with the same period last year. Oslo declined in the quarter further to strong last-year figures and increased additional capacity.

The strongest trends in Europe are currently in Warsaw with +10 percent after the first quarter, followed closely by Paris with +9 percent. In both cities, the growth is driven only by average rates, and prices within the luxury segment in Paris have

now overtaken London. Several other eastern European cities are performing strongly, including Moscow, Tallinn and Budapest. The financial city of Zürich has declined most for the moment, with a decrease of 10 percent for the quarter.

Barcelona shows continued good growth both in price and volume while Amsterdam, which was strong for a long time, declined slightly due to decli-ning volumes.

The significance of the increasing middle-class in China and India was emphasised: together, these countries are expected to represent 1/3 of GDP-growth for the global tourist industry in 2022. To close, the WTCC sharply criticised the world’s gov-ernments for maintaining expensive visa require-ments for tourists, which leads to considerably reduced tourist revenues.

Other speakers also emphasised the impor-tance of the continued development of China and India. The general opinion seems to be that a lower rate of growth in these countries would have con-siderably more serious consequences than a drawn-out debt crisis in Europe.

All of the major brand names were naturally present, and they were all given the opportunity to present their forthcoming hotel projects in different

growth regions. It was easy for members of the audience to believe that they were competing with each other, with the winner being the one with the most new rooms in the pipeline…

The debate continues: brands vs. ownersThe second day of the conference saw a debate regarding the hotel property owner’s role versus the brands’ role/operator’s role. It was quite clear that the relationship has been and, from time to time still is, associated with certain tension and different viewpoints.

In general, it has previously been easier for the major brand names to fully obtain their demands regarding the design of rooms, price-setting, hotel concept, etc, vis-à-vis the property owner. Now that more and more owners understand that active

ownership is required to maintain profitability, the positions have changed and the owners’ demands towards the brands have become greater – partic-ularly when the owners make considerable invest-ments in the hotel properties.

The debate also touched profitability aspects. The major brands indeed contribute to pushing up average rates, but in view of the charges and other service costs associated with franchise or manage-ment contracts, the question is how profitable these contracts are for the owners? From the own-er’s side, there is a desire to see more joint invest-ments, greater shared risk and less influence from the brands. The brands maintain that owners should carefully read what each respective brand stands for in view of that flexibility within a brand name is limited.

AbAting downturn–

… Pandox Youth handball

MoveMent

tHeMe SOCIaL PrOJeCtS

Last autumn, Pandox established the Pandox Youth Handball Movement project together with Partille Cup and the Kenyan handball association – Mount Kenya Sports Group (MSG).

The overall goal is to contribute to children and young people having meaningful and comprehen-sive leisure time through sport and handball train-ing. Based on this foundation, the objective is to also contribute later with education regarding dis-ease as well as social and attitude issues.

The project is still basically in the start-up phase, with many activities being formulated and pro-cessed. Thanks to many enthusiasts, strong com-

mitment and good cooperation, we are nonethe-less pleased when we look back over the project’s first half-year. We can already observe several posi-tive effects and good results. We are particularly happy that we have succeeded with most that we have strived to obtain and set up as targets in the project plan:

– The number of members is growing and we have an organised administrative staff and strong local project management with resources to handle membership applications, as well as long-term planning for further expansion. The number of members is currently already over 600 children and

young people (spread roughly equally between girls and boys), who train regularly 2–3 times each week – compared with the 200–400 who trained more irregularly previously.

– MSG has successfully established a league where children and young people can play against each other in different age groups and degrees of difficulty. A league did not exist before and we believe that it can be a success factor for greater interest for the sport, broader spread, and not least to strengthen MSG as an organisation.

– The Pandox Training Course has been implemented with good results. Two training

Follow our projects and development at www.pandox.se/foretagsansvar

Warming-up before the match in true Pandox spirit.

Pandox Training Course.

8 MARKET INFORMATION FROM PANDOx

Freeset – Supporting freedom on the go!As we have previously mentioned in UpGrade, Pandox supports the fair-trade company Freeset in Calcutta by purchasing own-designed products, handbags and cloth bags, etc. Among Pan-dox’ own-operated hotels, the Hotel Berlin, Berlin has pur-chased 5,000 cloth bags and the Hotel Bloom! is next in line.

Pandox has also mediated contacts between Freeset and other companies that have shown interest in the products, including Congrex, an international management company that offers services for meetings, events and conferences. Congrex has purchased bags and arranged lectures about Freeset and social commitment for their customers. We at Pandox think that it is fun to be able to help other companies to initiate social cooperation.

A lot has also happened within Freeset during the year. Focus is now on getting more donors and to be able to open more centres in northern Calcutta. According to Freeset, the cost of being able to offer prostituted women freedom through employment is about USD 475. This amount includes requisite education regarding sewing, reading and writing, as well as medical and child care. It may not seem to be a very large amount of money to help someone to long-term freedom, but in order to find more donors Freeset has entered a cooperation agreement with an organisation called Forgo with the objective of enabling small donations. Through Forgo, it will be easier for normal people to give small amounts of money to charity in conjunction with their daily shopping. Fargo’s SmartPhone app

camps for trainers and coaches of young people were held for two weeks in February. The participants learned about handball theory, how to handle inju-ries, bandage feet and fingers, pump balls, as well as discussing good sportsmanship. But perhaps the most appreciated was nonetheless to try out new practical exercises, defence and attack, in the handball court. A Par-tille Cup Kenya Trophy tournament was also held during this period with 80 teams and more than 1,100 players taking part, which was a record for all the years the tournament has been held.

The participants had very different levels, but all made progress in a short time, according to head coach Lisette Norén from IK Sävehof. Many of the participants had to walk a long way to take part in the training, up to one hour in each direction. The training camps drew a lot of attention in Nyeri, and there are considerable expectations and hopes for recurrent camps. The camps were concluded with the distribution of diplomas and Pandox-sweat-ers, and all participants were very grateful to have been able to take part.

– Part of the support is used to give food to the poorest players in conjunction with the training sessions.

– Social projects are growing in number. The hope is that the next train-ing camps for handball leaders will also include discussions about attitudes among young people, healthy diet, drugs, hiv/aids as well as issues concern-ing social life. These items are in demand and interesting to study. Other proj-ects are also being formulated, including starting to award grants in the autumn in order to give young people an opportunity for better education.

It was fantastically inspiring for us at Pandox who visited Nyeri while the training camps and tournament were in progress, and to see the Kenyan joy and self-evident presence. Young people who laugh, dance and sing together next to the handball court show that we in Sweden have a lot to learn from our Kenyan friends. Sport is a considerable source for happiness and solidarity, and we have experienced the Kenyan young people as being incredibly open and optimistic regarding their situation and future. This has strengthened us in our belief that sport plays an important role for children’s development, and that we are on the right track within this project!

Read more on www.forgo.it, www.freeset.org or scan the QR code.

Five questions to Peter ErikssonHotel manager of the Hilton Stockholm Slussen

Partille Cup Kenya Trophy – the largest tournament in East and Central AfricaMt Kenya Handball Club, MSG, has taken part since 2003 in the world’s largest tournament for young people – the Partille Cup in Gothenburg. More than 1,000 teams from 50 countries take part in the tournament. In 2008, MSG took the initiative to start an own local tournament in their hometown of Nyeri. The tournament has been arranged since 2009 with support from Partille Cup, and the number of participants has steadily grown – in 2012 there were 80 teams with 1,120 participants. The dream is now to bring in more teams also from other parts of Africa and the world. During this year’s tournament, MSG was responsible for a tent under the banderol “MSG – Friend of the Youth”. The tent was a much-appreciated feature and young peo-ple, trainers and parents could go there for guidance and advice from knowledgeable coaches concerning both healthcare and problems experienced by young people.

MARKET INFORMATION FROM PANDOx 9

5 And finally, how come you have your own bees at the hotel?

When Pandox was planning to refurbish our roof, we wanted to have a large meadow with flowers and grass on the roof, like a garden in the centre of Stockholm. I started to Google around on this subject, and found buildings that had bees on the roof. The idea was born and we have had our bees for one year now. But we are still waiting for our roof garden…

4 Hilton Stockholm Slussen is the only hotel in Stockholm operated under the Hilton brand. What significance does this have for your operations?

On the one hand it is easier to focus on just one hotel. However, I would like to see more Hilton brands in Stockholm because it would make it easier for our staff to pursue a career and for us to retain many skilful employees. Simultaneously, there would be economies of scale that we do not currently have.

2 We indeed know that Hilton Slussen is a first-class international hotel with one of Stockholm’s absolutely most beautiful panoramic views. But what more is

unique about Hilton Slussen?

We have a product that is extremely good from all aspects. For hard-ware, the architecture of the hotel is unique with three completely separate sections and many round forms originating from Slussen and its design. We provide excellent service, which is clearly reflected in the very positive feedback from our guests. We have also focused on having Sweden’s best breakfast, which we are very proud of.

1 Stockholm received considerable new capacity in 2011 and more hotels plan to open in 2012. Trends in the first quarter were relatively weak, and many people believe

that predictability is lower now than previously. How do you feel about the Stockholm market for the coming year?

Difficult to say, and I agree that predictability is lower now than previ-ously. There are no direct weeks that are fully active in the same way as before. Things move along however, and the year will be fine for Stockholm, although I believe that the market will be slightly poorer than last year as a whole.

You have been hotel manager of the Hilton Slussen since 2008 and have 130 employees. How would you summarise your leadership with three words?

I allow a very large scope of action to all of my department heads and employees. My job is to try to make their job easier. And then we must have a lot of humour and creativity – which is very important for the hotel. I also want department heads in particular to be organised. I like organised creativity.

3Delegation

Creative

Trust

enables people to choose a cheaper alternative of a product or completely decline a purchase in favour of Forgo’s project. For example, one can choose a small cup of coffee instead of a big cup, or just skip having a coffee and instead send a small amount to charity with a couple of simple clicks on the phone. Pandox is following the cooperation agreement with great interest, and hopes for good results for Freeset.

10 MARKET INFORMATION FROM PANDOx

… New York – increasingly popular New statistics from New York’s tourist office show that the number of foreign tourists in New York has more than doubled since 2005, within an increase from 6 million in 2005 to almost 13 million in 2011. Among Nordic tourists, Swedes were the largest group.

Tourism is extremely significant for the city’s economy. Last year, tourists spent USD 32 billion and around 321,000 people in the city have a job that is dependent on tourism.

… Pop-up hotel new trendThe pop-up trend – for those who want to be first with the latest. The concept is based on new, often rather odd and different hotels that “pop up” in the market for a short time, only to disap-pear again just as fast. One example of the new trend is the spectacular one-room hotel called “A Room for London” by the Thames close to Waterloo. The hotel has been successfully launched as a retreat from the throng of the city, and will remain for the rest of the year. Another example is Design Hotels’ Papaya Playa project in Mexico, where the hotel operator has rented a hundred beach huts – with a lifetime of five months.

… Delayed take-off for Berlin’s new huge airportOnly in spring 2013, after several delays, the new airport in Berlin – Berlin Brandenburg Willy Brandt – is expected to open about 20 km south-east of the city centre. The airport is built on a surface equivalent to 2,000 football fields and will initially take 27 million passengers a year, but with expansion potential for a further 45 million pas-sengers. This can be compared with Arlanda’s 19 million passengers. The new airport will open up a new opportunity for marketing Berlin both as a tourist and a conference city. Forecasts up to 2020 show a 40-percent increase in the number of overnight stays – and apart from all of the well-known tourist attractions, visitors are also attracted by good value for money in Berlin.

Trendspotting ...

Hotel room occupancy in London is normally stable around a high level of 80-85 percent during the summer months – despite the European vacation period, less business travel, and that tourists to a certain degree prefer sea and sand instead of cit-ies. The current question is how the most outstand-ing sporting event of the year – the Summer Olym-pic Games from 27 July to 12 August and the Para-lympics from 29 August to 9 September – will affect the hotel market.

An exciting time for LondonThis will be the third time that London has hosted a modern Olympic Games. Interest is at a record high, and most of the 6.6 million tickets have already been sold. London will also see the Queen’s Diamond Jubi-lee this summer with the particularly important cele-bration of the Queen’s 85th birthday and 60 years on the throne, which prepares the way for a very exciting time for London and for visitors.

2011 was a record year for British tourism with more than 30 million foreign visitors, who together spent GBP 18 billion. Tourist organisations are now fully engaged in marketing the Olympics and the Diamond Jubilee with the hope of beating last year’s figures.

High expectations and a lot happeningLondon’s hotels have considerable expectations regarding this summer, which can be seen in the high prices. Room rates in central London and in east Lon-don, close to the arenas, are more than GBP 400 on average, which is more than double normal price lev-els. Even higher prices – up to five times normal rates – have been noted, especially during the inauguration and closing ceremonies.

Positive voices from the market… According to Giorgio Manenti, Executive Vice President of JLL Hotels in London, the Olympics are expected to have a very positive effect on the hotel market. High reservation levels are being reported already now in May for the central hotels, despite the high prices. Gior-gio Manenti also believes that the Olympics will have considerable significance for London in the long-term. The investments made in infrastructure have made London a more healthy and attractive city for tourists, residents and investors.

Miles Auger, Associate Director of the valuation team of CBRE Hotels, also predicts a positive effect from the Olympics and believes that the Olympic weeks combined with the Diamond Jubilee and Farnborough will lead to a buoyant summer with a particularly strong leisure segment while potentially having a reduced corporate segment due to the number of large leisure events deterring business from London over what is otherwise a quieter corporate period. There is also some expectation that the timing of Ramadan may bring demand in late August to early September. For the full-year, the rise in RevPAR is forecasted to be 4–5 percent, due entirely to pricing, while 2013 is expected to see weaker trends.

The hotel consultant Savills Hotels is also positive with regard to effects on the hotel industry in London. In one report, growth for the full-year 2012 is fore-casted to be close to 4 percent.

…although some have doubtsOther analysts anticipate less tourism during the sum-mer. Higher prices, larger crowds and infrastructure problems are factors that could imply that less sport-interested tourists could flee the city. Sceptics also believe that the number of hotel reservations is still below the forecasted level and that expectations are unrealistic. One underlines in particular the prevailing economic climate, that room occupancy figures come already from high levels, and that many hotels have allocated rooms to the Olympic Committee at dis-counted rates. Moreover, the fact that certain other hotel operators that tried to apply restrictions for multi-night reservations have now already started to soften their demands, can also be interpreted as meaning that expectations are too high.

Another dark cloud is what will happen in the hotel market directly after the Olympics. One percep-tion that is probably shared by many visitors is that London is an expensive destination this summer due to the Olympics… and that the Olympic Games will continue for most of the summer.

However, the Games have not yet started and we know that the hotel industry is becoming increasingly unpredictable, and that late reservations are becom-ing more common. UpGrade will, quite simply, report the subsequent outcome!

(Sources: Vagabond, dn.se, svd.se)

Olympics – countdown to the sporting event of the year!

CItY IN CeNtre

WonderfulCopenhagen

MARKET INFORMATION FROM PANDOx 11

HOTEL AND TOURISM DATA

The joint hotel project between Pandox and Scandic, where SEK 1.6 billion is being invested in the upgrad-ing and development of 38 existing Scandic hotels in the Nordic Region, is known as “Shark”. The project embraces most of Scandic’s highway hotels, as well as city-centre hotels such as Malmen in Stockholm, Continental and Hilton Strand in Helsinki, and the KNA hotel in Oslo. The framework of the project was adopted in 2011, and full focus is now on planning the large number of sub-projects included in the investment, identifying purchasing synergies, and getting really started.

The project’s vision is to renew and develop the new generation of highway hotels with a joint concept and to invest in new concepts for the city-centre hotels. The new concepts are characterised by flexi-bility and untraditional solutions that take into consid-eration new family constellations, travel patterns and trends. This also implies that the history of Scandic and each respective highway hotel be integrated in the design element and layout, that the hotels’ infor-mal home-feeling be strengthened, that more social meeting places be created, and that the rooms be given new complete furnishings and design.

The major Shark project continues

Copenhagen is very much an international hotel city, and close to 60 percent of all hotel guests come from another country. Demand for the hotel industry is driven by the city’s strong posi-tion as a conference city and leading cruise destination in Scandinavia, proximity to the Kastrup International Airport, and considerable business travel.

There was significant capacity addition in 2011 with several large new hotels, including the Bella Sky Comwell Hotel with a unique award-winning design and more than 800 rooms, and the central and trendy budget Generator Hostel hotel with 662 rooms. However, only limited new hotel capacity is expected in 2012.

Perfect for a weekend!Apart from the best-known attractions such as Tivoli, the Louisiana Museum of Modern Art, the Christianborg Palace, Ströget, and the little Mer-maid, there is much more to discover – such as dif-ferent architecture and the role as an acknowl-edged fashion city. Why not take a sightseeing tour with the favourite Danish means of transport – a bicycle! Visit the Glyptoteket Museum at Radhus-platsen, look at new trendy parts of Nørrebro or

cycle to the sanctuary of Christiana with its Pusher Street and the renowned, liberal and permissive lifestyle. Then finish off with a cold beer at a pave-ment café in Nyhavn. There are many alternatives, and the city is easily accessible with several parks and cycle paths.

There is also a very broad choice of restaurants in Copenhagen with good quality, including Noma that has been voted several times as the world’s best restaurant. Nightlife offers all imaginable kinds of clubs, and for those who want to rest their feet after a hard evening on the dance floor, an optimal choice is to take a rickshaw cycle taxi to the hotel, or even further into the Copenhagen night that most often goes over to the morning.

Pandox projectsA lot is also happening in Copenhagen for Pandox, including the ongoing development of Scandic Copenhagen. All rooms will be upgraded, and the lobby, reception, conference facilities and restau-rant will have a totally new and modern design con-cept. The goal is ambitious – to be one of the best meeting hotels in Scandinavia for an international and Scandinavian public!

Hotel

Domestic, 43%

International, 57%

Leisure travel, 54%

Business travel, 46%

Brands, 33%

Independent, 67%

Market size: Approx. 80 hotels, About 15,000 rooms

Largest brands: Arp Hansen, Rezidor, Scandic

No. of guest nights: More than 3.7 million (+12% compared with 2010)

Hotel guests

Scandic Copenhagen

COPENHAGEN

Scandic Upplands väsby – first of the highway hotels with the new design concept.

Photo montage

Prestigious visit to the InterContinental Montreal Mikhail Gorbachev, former president of the Soviet Union, took part in a conference with the board of the Montreal Chamber of Commerce. The VIP guest appropriately stayed in the presidential suite at the InterContinental Montreal, and welcomed other dignitaries including Brian Mulroney, former prime minister of Canada. Other celebrities who visited the hotel in the past half-year include Lady Gaga and Twitter-founder Bizz Stone – exciting!

New hotel manager at the Hotel BLOOM!Jan Henningsen grew up in Germany but has pursued his career in the United States. His latest position was as hotel manager of The Standard West Hollywood in Los Angeles and The Standard Los Angeles Downtown.– “Jan has broad experience of managing and developing concept hotels in the United States, and we believe that the Hotel BLOOM! will be able to fully benefit from his knowledge,” says Aldert Schaaphok, Vice President Operations Pandox.

New rooms ready at the Hotel Berlin, Berlin The extensive refurbishment of the Classic Wing is now complete and a total of 200 new premium rooms and 26 new conference suites are now ready to welcome their guests. All of the rooms have an aspect linked with Berlin’s history. Five floors are divided into different decades with design and furnishing characteristics of the period, where each floor tells its own part of the city’s history.

Good Christmas deed of kindness at the Choice in Södertälje! Just before Christmas 2011, the Quality Park in Södertälje started a charity project that offered poor families the chance to have a more pleasant Christmas with food and presents. Many people find Christmas to be quite obvious, but there are many families with children that need help, and the objective of the project was to highlight the problem. “We could not help everyone, but we helped several families who will no doubt remem-ber Christmas 2011 for a long time,” reports those who took part in the project.

the Hotel Brussels has signed an agreement with Open Ways that offers a SmartPhone app that guests can use as their room key. Part of the ongoing total refurbishment will be the installation of “Mobile key”, via Open Ways, for all of the hotel’s 424 rooms.

New technology

AT THE HOTEL BRUSSELS

Prestigious award for Hyatt Hyatt Regency Montreal has received an award for its excellent hospitality. It is the 26th year that industry and commerce in the region receives awards for their efforts to make Montreal a world-class destination. In the “larger than 200 rooms” category, Hyatt received the coveted Ulysses 2012 award further to extensive refurbishment of the public areas, restaurant, bar and wine-bar in 2011.

Read more news about Pandox at www.pandox.se

Hotel manager Bernard Chênevert had the pleasure and honour of welcoming Michail Gorbatjov.

I am Harry, Mr Harry. I am third in the series of Corporate Dogs at Pandox. I sometimes go to the office to guard my position. I start the day by greeting everyone together with my master, and then I go out with Thérèse who is the Corporate Dog walker. The latest walk was at lunchtime to Kungsträdgården when the cherry trees were in

full bloom. I am liked at the office because I contribute with both energy and calm. I also sometimes bark a little at my colleagues!

Jan Henningsen and Aldert Schaaphok at the Hotel BLOOM!

PANDOX’ HOTEL MARKET DAY BOOK TUESDAY, 27 NOVEMBER fOR

AT 1PM, AT THE HILTON STOCKHOLM SLUSSEN.

As usual, we will present domestic and international hotel market trends, as well

as a current topic within our industry.

Pandox newsNeWS FrOM tHe WOrLD OF PaNDOX