Europe -  Copenhagen, Denmark

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Greater Copenhagen is Scandinavia’s largest metropolitan area, with 3.9 million inhabitants. It has the highest number of international companies in the region and is home to Northern Europe’s largest international airport. The Copenhagen region accounts for approximately 40% of Denmark’s economic output and has experienced consistent, sustained growth in recent years. The city’s growth has been delivered at the same time as improving environmental performance and transitioning to a low-carbon economy, elements underpinned by a combination of the city’s eight green economy drivers: urban form, innovation, investment, skills and employment, enterprise, energy resource and effectiveness, low carbon and environmental quality. A number of significant public investments in Greater Copenhagen are to be developed over the next ten years, including Ørestad, Carlsberg City District and Nordhavn.

The Copenhagen hotel market is generally tied to the performance and outlook of the Danish, European and global economies. The economic slowdown appears to have been overcome, and consistent growth is forecast for the next few years, which should benefit the city’s hotels. The long-term pipeline for Copenhagen includes a broad range of properties, from budget to luxury, alongside extended-stay, hostel and lifestyle concepts. More than 70% of the current Copenhagen hotel market supply is three- to five-star properties; however, low-cost/budget (typically two-star) hotels have entered the market successfully, winning valuable market share, and more are planned to open in the next few years.

The city of Copenhagen has seen strong growth in performance in recent years, partly due to its growing reputation as one of Europe’s top MICE destinations with the Bella Centre, Scandinavia’s leading conference and trade show venue, a key driver of congress. Hotel occupancies have remained stable at slightly below 80% over the past three years and average rate has grown in line with inflation.

The Greater Copenhagen area has a substantial pipeline for the next three years with just under 6,000 rooms expected (some 30% of current supply). However, given the strong demand growth, recording a 5% compound annual growth rate between 2011 and 2018, the outlook for future tourism trends in the city is positive.

In terms of transactions, three hotels changed hands in 2018: the 357-room Scandic Copenhagen Airport transacted for nearly €90 million (€250,000 per key), the 81-room Best Western Hotel City Copenhagen at an undisclosed sum and the 155-room Hotel Ottilia at €66.5 million (€430,000 per key). Overall, the market recorded a value increase of 2.9% in euro (3.1% in local currency) compared to 2017 levels.

The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide. Consequently, the latest HVI analysis may no longer reflect the most current measure of lodging industry strength or the hospitality investment market.

In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related restrictions will be in place, we are updating our analyses on a weekly basis using the most current data.

Additionally, examination of value trends in prior cycles can provide useful information. Historical patterns, together with an understanding of the market’s current expectations for the eventual recovery of the industry and its performance, can provide insights on the likely trajectory of decline and recovery for hotel values.

For the Latest Information and Analysis on the Impact of COVID-19Click Here

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For more information, please contact:

Sophie Perret, MRICS, MBA
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Magali Castells
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