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NORDIC CHOICE HOTELS
Second four monthsSeptember, 2018
Executive summary
No need to panic - it’s organic!
We are leaving summer behind with more muscles to face the toughest period to come – the next four months. In the second fourmonths of 2018, we stayed neck and neck with our targets. Gross revenue in NCH Group increased by 258 MNOK compared to the same period last year, and the EBITDA development improved by 77 MNOK.
While new capacity largely drove growth last period, this period the organic part of the portfolio took a harder grip on growth and landing at 6 %. Newly renovated rooms introduced back into the market, is one factor. Market development is another. So far this year, most of the major destinations in the Nordics have had a growth in volume, with the exception of Tromsø and Jönköping. Like last period, we still have growth in RevPAR in majority of the markets, with Oslo, Gothenburg, Malmö and Stavanger in the lead. Stockholm has had a more positive development these last four months, but are still closely monitored. Market RevPAR to date is +3,4 % in Norway and +2,8 % in Sweden.
Executive summaryState of Nordic Choice HotelsHaving a look at our chains Comfort Hotel®, Quality Hotel™ and Clarion Hotel®, we see a great development in revenue, driven by capacity and rate. Large conference hotels did however underperform in regards to F&B and M&E during the hot summer months, but was compensated by increased room revenue. Our independent hotels within Nordic Hotels & Resorts also have a nice development, especially in RGI and overall performance of their city hotels. TAK & SUS (rooftop bars) were highly appreciated by the Stockholm crowd during the warm summer days. At most, the rooftop had over 6.000 visitors on a single day. In total 24.000 Aperol Spritz & 50.000 liter of beer ensured the atmosphere were as high as the temperature.
New members of Nordic Choice HotelsFollowing a year of development and complete refurbishment, Quality Airport Hotel Gardermoen welcomed guests to the official opening of the hotel on August 23rd. A total of NOK 350 million has been invested in a world class conference hotel, featuring 455 fantastic rooms, 500 m2 of exhibition space and a 700 m2 congress hall. The hotel is now focused on taking top spot in the conference sector, which is currently one of the fastest growing markets in Norway. Comfort Hotel Umeå City joined the NCH family as a new franchise hotel June 1st. This is the second Comfort hotel in the city, and guests can now look forward to 131 modern and affordable rooms and a lovely lobby lounge.
DigitalizationOur digital guest journey has continued with full strength this period. The NCH app now supports “check out” for 181 of our hotels, all made available in this period, making check out easier and smoother for our guests. A fast-growing percentage of all revenue booked in our digital direct channels are generated of bookings done in our App.
Yes, WeCareThanks to an incredible effort and amazing engagement from both staff and guests, the UNICEF campaign Sweet Dreams Stay has become a huge success in just one year. In total, we are now close to 400 000 SDS nights, which means a donation of 4 million NOK to UNICEF. Together we have made it possible to rescue even more children in danger of trafficking, give even more children a good night sleep and a childhood free of exploitation and abuse.Nordic Choice has loudly shouted out our commitment to Pride and its events in Helsinki, Oslo, Bergen, Copenhagen, Europride in Stockholm and Gothenburg. Throughout the summer, our hotels have been showered in the colors of the rainbow. We support Pride because we want to tell the world that our door is open, no matter who you love or how you identify. We raise our voices for equality and respect, because we know they are important values to our colleagues, and we believe they are important values to the society.
In conclusionThe organic growth continues to beat the market growth in most of our markets. The hot summer months made our fabulous rooftop restaurants and resorts attractive spots for our guests, and we are now preparing for a fall with high activity in both conferences, corporate and leisure traffic. In the coming months we will continue to improve our digital guest journey and put new, exciting hotels on the map.
Net change in the hotel portfolio the last four months is 0 but there are some changes in the franchise part of the portfolio:• Comfort Hotel Umeå City new franchise hotel from June 15th.
• Quality Hotel Dalecarlia, Tällberg, (franchise), left the portfolio June 30th.
Changes in rooms is +193 in the last four months, driven by organic expansion and renovated rooms back in the market
PORT
FOLI
O
TOTAL NORWAY SWEDEN DENMARK FINLAND OTHER
Number of operation htl
Number offranchise/mgmt htl
TOTAL
Change
133
58
191
0
65
25
90
0
62
29
91
0
3
2
5
0
1
1
2
0
2
1
3
0
Hotel Portfolio
+5%
PEOPLE
The Good Neighbour
NPSGuest satisfaction
PLANET PROFITTRevPAR
organic
EBITDAPAR organic
PEOPLE PLANET PROFIT
Sweet Dreams Stay”Say no thanks to room cleaning – it
saves our planet”
Food Wastereduction vs LY
43,1 %
SDS Nights
21,4 %
-30 tons
May-AugLY
May-Aug18
• 16 000 employees• 191 neighbourhoods• 6 different countries• 1 unique culture
1 MNOK in the pot for the hotels to create a difference in their neighbourhoods.
470 KNOK worthy initiatives approved in May-Aug
Donation to UNICEF
4 MNOK
+6%
YTD LYYTD
+14%
May-AugLY
May-Aug18
+22%
YTD LYYTD
WECA
RE
The market development is in line with expectationsThere is a positive development in sold rooms in most markets. The decline in RevPAR in Bergen, Uppsala, Umeå & Linköping is expected as the market has increased its capacity. Positive turn in the Stavanger market, however the ONS conference might affect the numbers short term.
MARK
ET
Organic gross revenue growth in hotel operations have increased by 1pp since last period and is now 6 % YTD
✓ Organic growth in Sweden is 7 % and it’s 3 % in Norway. In Finland and Denmark we have respectively 10 % and 12 % growth on organic portfolio.
✓ Included new capacity overall gross revenue growth is 6 % May-Aug, 9 % YTD
OPER
ATIO
NS
*Renovation QH Gardermoen affects growth
3.565
3.519
3.349
101
2.877
Growth
2017 Gross Revenue
2018 Gross Revenue
2.775 1.613
28
1.641
57
739
797
424
440
16
558
6982018 Gross
Revenue
2017 Gross Revenue
141
+4 %
+25%
Gross revenue increases 4 % in May-Aug in the Nordic Choice brands combined, while Nordic Hotels & Resorts is up +25 %
OPER
ATIO
NS
Growth
Looking at R12 EBITDA development we continue to see a strong growth. From August 2017 to August 2018 the rolling EBITDA has increased by 28 %.
R12 ACT *Strawberry Living excluded
NCHG
849
686
751718
663 692 688
761723
778746
764753 778
648708
907888861 885
Jan – Apr 2017 May – Aug 2017 Sep – Dec 2017 Jan – Apr 2018 May – Aug 2018
Many new and exciting projects coming up in the last months of 2018 and into 2022
PIPEL
INE
✓ More than 6 300 new hotel rooms signed for theperiod September 2018 - 2022.
✓ 22 new hotels in 15 different cities until 2022.
2018 2021-20222020
1.635
SUM2019
2.301
6346Number of new hotel rooms
Clarion Hotel Draken - Gothenburg
Clarion Hotel The HUB - Oslo
Quality Hotel Match - Jönköping
Post Office - Copenhagen
Comfort Hotel Copenhagen Airport
Comfort Hotel Solna
Comfort Hotel Arlanda Airport
Amerikalinjen - Oslo
1.965
445
Quality Hotel Arlanda - Arlanda
PROJECTS ROOMS PREL. OPENING
Ålesund//Quality Hotel ÅlesundHalden //CC Park Halden (franchise)
Stockholm//Comfort Hotel KistaTrelleborg // CC Magasinet (franchise)
Porsgrunn // Comfort Hotel Porsgrunn (franchise)
Oslo//Clarion Hotel The Hub Oslo//Amerikalinjen
Stockholm//Comfort Hotel ArlandaMalmö//Quality Hotel The Mill
Oslo//Clarion Hotel Oslo
Drammen// Quality Hotel River StationHelsingborg//Clarion Hotel Sea-U
Copenhagen//Comfort Hotel Copenhagen AirportStockholm - Sickla // CC Hotel Tapetfabriken
Oslo// Quality Hotel Hasle Linje
Jönköping//Quality Hotel MatchCopenhagen//Posthuset Copenhagen
Mölndal// Quality Hotel MölndalSolna// Comfort Hotel Solna
Sundsvall// Clarion Hotel Sundsvall
Göteborg // Clarion Hotel KarlatornetGöteborg // Clarion Hotel Draken
Totalt
13162
19458
134
810122
503230253
249253
619156217
233390
369336270
304453
6 346
Sep 2018Okt 2018
Okt 2018Nov 2018
1 mars 2019
15 mars 20192019
201931 jan 2019
1 juli 2019
31 okt 2019Mars 2020
Q3 2020Q2 2020Q3 2020
Q1 20212020
Q1 2021Q1 2021Q2 2021
2021-20222021-2022
Signed Projects
2018 - 2022
In case you’re wondering...ACT = ActualEBITDA = Earnings before Interests, Taxes, Depreciation & AmortizationEBITDAPAR = Earnings before Interests, Taxes, Depreciation & Amortization Per Available RoomF&B = Food and BeverageLY = Last YearM&E = Meeting and EventsNCH = Nordic Choice HotelsNCHG = Nordic Choice Hospitality GroupNPS = Net Promoter ScoreRevPAR = Revenue Per Available RoomRGI = Revenue Generation IndexSDS = Sweet Dreams StayTRevPAR = Total Revenue Per Available RoomYTD = Year To Date