Growing visitor demand puts pressure on Stockholm's hotels

Swedavia has sold a future Comfort hotel at Stockholm Arlanda Airport to boost the hotel's competitive edge and meet growing traveler numbers.
Stockholm, Sweden Image: Thomas Fabian / CC BY-SA 2.0

Demand for guestrooms in Stockholm's hotels is outpacing supply, even though the city added 1,840 rooms last year alone. The latest "Stockholm Hotel Report" suggests that an increase in international tourists, a growing middle class in Asia and cheaper flights have contributed to the increase in the number of leisure travelers in the city, which is now on par with business travelers.

"We see a huge increase in visitors from India, China and the United States, partly due to a growing middle class in Asia, but also thanks to the many new direct flights to Stockholm, which has made it easier for international visitors to come here," said Anna Gissler, CEO of Stockholm Business Region. "Over the last six years over 40 new European and 20 new intercontinental direct flights [were] established in Stockholm." The report claimed that the percentage of visitors from India and China has grown 411 percent and 214 percent, respectively, over the past 10 years. Visitor numbers from the U.S. grew 110 percent. 

Global companies have paid attention to the uptick in demand. In August, Radisson Hotel Group rebranded the Strand Stockholm under the Radisson Collection following a two-year refurbishment, and a new Zleep Hotel is slated to open in January 2019 following the partial conversion of a Stockholm office building. Scandic has signed a long-term lease agreement with Midroc for a hotel in the new development in the Helsingborg harbour

But the companies are also aware of the challenges facing the city. "If you look at Stockholm now, more supply is coming in and if you look at the long-term trend, then you can pay a lot and, yes, you might get a good return, but it is high-risk," said Scandic CEO Anders Nissen back in May. "The regions are stable and give good returns." 

The Hotel Report predicts that demand will continue to develop at a healthy pace and that there is scope for an additional 1,000 new rooms in the city through 2022.

"With the hotel report, we want to provide key figures and forecasts to facilitate for potential investors to evaluate Stockholm's hotel market," said Tora Holm, business development manager at Invest Stockholm. "With 14 million commercial guest nights and Stockholm being one of Europe's fastest-growing regions, we are an attractive place to look into. Interest from foreign players is already strong, not only because of the growth rate, but also thanks to Stockholm's position as a creative city with progressive values and innovative tech companies." 

The report was developed on behalf of Invest Stockholm, the official investment promotion agency of Stockholm. The report is published every two years.