BEONx’s research, a revenue solution provider to hotels in Europe reveals that a shift in trend has led to a remarkable growth in hotels since late 2021. This is due to the impact COVID-19 has had on tourism. The sector recovered quickly and reached pre-pandemic 2018 levels. This momentum is not stopping; factors like inflation and the resurgence of consumer demand have propelled hotel revenue and occupancy to record levels, exceeding industry expectations.
Stockholm, for instance, saw a 36.38% surge in revenue, climbing from 71.1€ in the first half of 2022 to 96.97€ per room in the same period of 2023. Oslo, Copenhagen and Helsinki all experienced similar growth, with increases between 28.1% and 24.2%. These increases were particularly noticeable in the first three months, when the market was still feeling Covid-19’s effects. This unexpectedly large revenue increase created some uncertainty. There were concerns about a possible “rebound effect”.
Hotel revenue growth will moderate in 2024
The outlook is still very positive, as revenues are still at historic highs. The extreme growth is now being replaced by more moderate and sustainable increases in hotel revenue. In the first six months of the year, the Nordic capitals’ annual growth rates, which were previously between 24-30%, are now at more reasonable levels, between 5 and 10 percent.
These increases are in line with pre-pandemic rates of growth, although they still remain high compared with historical averages between 1 and 5% per year.
During this period, Stockholm recorded the highest revenue per room at 106.94€, followed by Copenhagen at 97.79€, Oslo at 80.94€, and Helsinki at 62.92€.
Occupancy and Pricing
The variety of strategies that hotels have implemented is a key factor in achieving these annual gains. In Oslo, Copenhagen and Helsinki, revenue increases are primarily due to a higher number of tourists (between 5 and 6%) while the average revenue per hotel room has remained relatively constant.
Stockholm’s revenue growth has soared to a robust 10,32%, largely due to an increase in prices (9.16%). However, hotel occupancy only increased by a modest 1.41% in the same period of 2024. This could be due to the fact that Stockholm, as the Nordic capital in 2023 with the highest occupancy, reaching 75%, must optimize prices to improve the results given stock limits.
These two strategies—occupancy and pricing—are commonly used by revenue managers and reflect broader global trends.
Forecasting the future
The Nordic hotel market is still growing, but the pace has slowed. Flexible strategies and the use of advanced technologies are key to sustaining this trend.
Diverse strategies for pricing and occupancy have been proven to be effective in maintaining stability and achieving sustained growth. Each hotel should adopt an individual revenue management strategy that takes into account its market, customers segment, and competitors.
Tomasz Leszczynski is a revenue management specialist and Director of Sales at BEONx in Northern Europe. He explains that there is a possibility of a resurgence effect, especially in a market as dynamic as this. Hotels can mitigate the risk by using data-driven strategies for revenue management, adapting prices and offers to market fluctuations, as well as diversifying their income streams.
In order to increase profitability, you need to combine operational efficiency, price optimization and a better guest experience. Investing in technologies to automate processes and adjust rates dynamically will help maximize revenue and anticipate trends. It will also adjust supply and demand and improve performance.
As Álvaro Ponte, VP of Data at BEONx, adds:
“Leveraging artificial intelligence technology for real-time price adjustments can significantly enhance both occupancy and revenue.”
To capitalize on future opportunities, it will be important for hotels to use advanced technology as well as adapt to the market dynamics. The future may be uncertain but those who are equipped with flexible data-driven strategies, cutting-edge technology, and adaptable strategies will be well positioned to thrive.
