Jens Mathiesen is President and CEO of Scandic Hotel Group, the largest hotel company in the Nordic countries. He shares his thoughts on driving recovery in cities, leisure and the corporate segment, and sharing risks among partners.
Hospitality Insights: What makes hospitality real estate a strong investment opportunity despite the very difficult time the market is going through?
Jens Mathiesen: Hotel operators generally commit on a long-term basis and despite the latest very difficult time, the hotel industry has delivered stable returns.
Hospitality Insights: How is your company driving recovery in 2021?
Mathiesen: Our main focus is to drive revenues by developing our customer offering and marketing in order to capture our share of market growth, especially within the growing leisure segment during the summer.
It is also important that we make sure we have cost discipline as the market recovers.
Hospitality Insights: The pandemic has had a strong impact on the relations between all stakeholders. What do you expect to be the lasting effect of this change?
Mathiesen: It has become even more obvious to us that we have good support from both our owners and banks. Scandic has raised significant equity during the pandemic, and we have both raised and extended our credit facilities with our banks. We have also had good support from landlords who have agreed on rent reductions for the coming years. Following the pandemic, we might see hotel leases with a slightly higher variability than before. And for sure we need to share risk if we face future market collapses like the pandemic.
Hospitality Insights: Which regions do you expect will lead recovery for hospitality in 2021 and beyond?
Mathiesen: We believe that the large cities will be very important in the recovery. We have decent occupancy in several small destinations, but the activity is still very low in the capital cities, due to restrictions. We have seen good underlying demand growth over time in the capital cities, and that is likely to resume post-Covid.
Hospitality Insights: Has the Covid crisis had an impact on the segments your company is looking to expand into?
Mathiesen: Our focus is the mid-market, combined with a handful of signature hotels that are a bit more upscale. Last year we launched a new sub-brand called Scandic Go, centrally located hotels with slightly smaller rooms and with less F&B. We had to postpone the roll-out due to the pandemic, but our future growth will be a combination of Scandic-branded hotels in the mid- market and Scandic GO.
Hospitality Insights: The leisure segment is hailed to be driving hospitality recovery. What are the keys to succeed in this market?
Mathiesen: We saw structural growth in the leisure segment before the pandemic, and we are convinced that growth will continue. We have developed our hotel offering to attract broad customer groups. We have increased our marketing towards families for the summer season, and our hotel portfolio has become more leisure friendly, looking at both our recent openings and our pipeline.
Hospitality Insights: The corporate segment is expected to come back later than leisure. How are you managing recovery in this segment?
Mathiesen: We have done several launches that enable increased flexibility for our corporate customers, we launched a hybrid meetings solution, a blend of physical and digital meetings, at our hotels, and we have also launched a coworking concept that actually makes us the Nordic region’s largest network of flexible workspaces. We believe that a relatively large part of the corporate business could recover quite quickly – we de for instance have a lot of blue collar business, such as large construction and infrastructure projects throughout the Nordics.
Hospitality Insights: Have you put in place new initiatives continue improving on sustainability in the past year?
Mathiesen: Scandic is a leading player within sustainability in northern Europe and we will continue to come with new initiatives within this area to strengthen our position.
Hospitality Insights: What are your looking forward to with regards to your participation to IHIF?
Mathiesen: First of all I look forward meeting all colleagues in person.
Scandic Hotel Group is a Patron Sponsor of the International Hospitality Investment Forum (IHIF), taking place in Berlin on 1-3 September 2021.