Swedish hotel owner Pandox believes it won’t see a significant return to business until the autumn as the European hospitality industry catches up with other parts of the world.
Hotels in the United states are seeing occupancy levels at around 80% of 2019 levels, driven by strong domestic demand thanks to a successful vaccine roll-out.
“As vaccination levels increase, there is new hope that society can get Covid-19 under control and that the restrictions can begin to be lifted gradually,” Pandox CEO Anders Nissen, said
“The recovery in hotel markets around the world, in countries that are further ahead, clearly supports Pandox’s thesis that the underlying drivers of and the potential for post-Covid hotel market recovery is relevant in Europe as well.”
Pandox is hopeful that by the autumn business travel will also have returned.
“Pandox is in an attractive position with more than 80% of the total number of rooms in regional and domestic cities, and therefore has high exposure to domestic demand, which will lead the recovery of the hotel market. The recovery is, however, entirely dependent on when, and at what pace, the restrictions are lifted,” Nissen said.
Q1 Performance
Pandox managed to reduce its pre-tax loss by to 99% to £600,000 (7 million SEK) thanks to costs falling across the business. The company was helped by business relief programmes in Belgium, Germany, Canada, the UK and the Netherlands.
Pandox owns 156 hotels mainly across Northern Europe. The majority of its properties (84%) are leased to operators with the remaining properties operated by Pandox.
During the Covid-19 crisis, Pandox has benefited from the minimum and fixed rent in its main management division, which has kept cash coming in. Revenue in this segment in Q1 only fell 18% to £47.5 million (554 million SEK)