THE HOTEL SEGMENT IN 2021 TWO TRANSACTIONS DROVE
2021, a lack of travel activity among foreign
requires that the foreign tourists, to a
THE ACTIVITY
tourists meant that hotel stays in Denmark
greater extent, start travelling to Copenha-
Despite the major challenges that continued
were primarily made outside Copenhagen.
gen and that the conference market returns.
that there still was an investor demand for
Therefore, from April 2020, the occupancy
CONVERSIONS MAY BE THE SOLUTION
hotel properties when the right assets were
rate was higher outside Copenhagen than
IN THE SHORT TERM
offered on the market. However, the inves-
in Copenhagen in almost all months (
Due to the increasing tourism in the years
tors continued to be reluctant for the less
ure 56). This is in contrast to before covid-19,
before covid-19, many new rooms were
safe hotel properties. As a result, the trans-
where the occupancy rate in Copenhagen
added to the Copenhagen hotel market, and
action volume in the hotel segment reached
has historically been significantly higher than
at the same time, it was planned to add even
DKK 2.5bn in 2021 (
in the rest of the country. However, as people
more rooms (almost 6,500 new hotel rooms
were vaccinated towards the end of the year,
by 2028).
to affect the hotel industry in 2021, we saw
figure 55).
fig-
The investment activity in the hotel seg-
both the travel activity and the occupancy
ment in Denmark has historically been char-
rate at the Copenhagen hotels increased sig-
Therefore, in the short term, it must be
acterised by a few large transactions, and
nificantly, and in November 2021, the occu-
expected that the combination of reduced
2021 was no exception. The relatively high
pancy was again higher at the Copenhagen
tourism and the significant new supply of
investment activity was thus primarily driven
hotels than in the rest of Denmark.
hotel rooms may lead to an excess supply in
by Starwood Capital’s acquisition of hotel
the market. As it has already been seen with
Skt. Petri and Comfort Hotel Vesterbro at
THE SHARE OF FOREIGN TOURISTS
Gefion’s project at Engvej in Copenhagen,
a total price of DKK 1.7bn, which is equiva-
HAS HALVED
we expect that the excess may result in con-
lent to approx. 68% of transaction volume
When comparing the distribution of Dan-
versions to, e.g., studio apartments in the
in the hotel segment. Furthermore, the sales
ish and foreign guests visiting the Copen-
coming years.
of these two hotels were the primary reason
hagen hotels in 2021 with the distribution
why the hotel market was dominated by for-
from before covid-19, the absence of foreign
However, in the longer term, it is expected
eign capital.
tourists remain clear. Historically, approx.
that there will be a sufficiently great demand
two out of three guests were foreigners, but
for the occupancy rate in Copenhagen to
COPENHAGEN IS ON ITS WAY BACK
in 2021 the distribution was almost precisely
return to normal. Once the market has nor-
In Copenhagen, the annual number of visi-
the opposite, and two out of three guests
malized, and investors can be more con-
tors increased in all the years from the finan-
were Danes (
fident about the future of the hotels, we
figure 54).
cial crisis until 2020. However, covid-19
expect to see a higher and broader investor
stopped the growth, and in 2020 tourism
Therefore, in order for the market to return
was more than halved. In both 2020 and
to a completely normalized level, it both
demand for hotel properties.
Figure 54: Share of Danish and foreign guests in Copenhagen (jan-nov.)
AVG. 2015-2019
2021
Danish 36%
Danish 63%
Foreign 64%
Foreign 37%
Source: Statistics Denmark
88 | RED – Danish Investment Atlas 2022