Europe -  Stockholm

Stockholm is the economic, financial and business centre of Sweden, as well as a leading regional player, particularly in the emerging Baltic markets and within the EU. Although Sweden opted out of the EMU, Stockholm’s main trading partners are all European. The offices around Hamngatan and Sergelstorg control one of the most powerful economies in Europe. As such, the city ranks as a leading financial centre in the Nordic countries with a prevalence in areas such as innovation, technology, availability of capital and quality of life.

The service sector is dominant in the city and, as such, professional, scientific and technical companies account for around a quarter of the private businesses in the Greater Stockholm area, employing more than 13,000 people. The biggest employers in Stockholm are telecommunications company Ericsson, household goods company Electrolux, construction company Skanska, car and engine manufacturer Volvo and electricity provider Vattenfall. Other leading employers include the three main banks – SEB, Swedbank and Handelsbanken– and construction company NCC.

Stockholm is attractive as both a tourist destination and a city for business. However, Stockholm is commercial in nature: it is broadly recognised that business travellers account for 60% of the total demand in the city. Nevertheless, the number of nights from leisure visitors has increased significantly in the past few years, whilst guest nights from business travellers has risen more slowly. Stockholm Arlanda Airport is to receive a major investment of SKr13 billion to expand its five terminals in order to cater to the growing number of air travellers. The aim is to create the most competitive, attractive and environmentally adapted airport in Scandinavia. 

Some pressure on the top line was to be expected for Stockholm, following a large inflow of new supply in 2017. The city saw a moderate decline in both occupancy and average rate, resulting in a RevPAR decrease of around 3%. This is not the first time Stockholm has experienced such supply increases, the last time being in 2011, leading to RevPAR decreases of 5% and 3% in 2012 and 2013, respectively. Underpinned by a long track record of solid growth in both business and leisure demand, hotels in the Swedish capital tend to quickly recover within the following months/year, which is likely to also be the case on this occasion.

Owing to the scarcity of land and the predominance of operating lease arrangements, Stockholm remains a market with high barriers to entry for international players, and thus lacks internationally branded, high-end luxury hospitality products. Consequently, a vast majority of the current supply is operated by Nordic brands and a similar trend is seen in the pipeline, exclusively dominated by local operators with nine hotels (1,750 rooms) expected to enter the market over the next two years.

In terms of transaction volumes, 2017 ended on a slightly higher note than 2016 with a total of €221 million compared to €197 million, respectively. The most notable transactions were the 503-room Comfort Hotel Arlanda Airport at €130 million (260,000 per key) and the Clarion Collection Hotel Tapto at €37 million (€260,000 per key).

Change In Value For Market: (€Euro)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Stockholm RevPAR Change (€Euro)

Stockholm RevPAR (€Euro)

For more information, please contact:

Sophie Perret, MRICS, MBA
[email protected]
  • +44 20 7878 7722 (w)
Simon Hulten
[email protected]
  • +44 020 7878-7775 (w)