Tourism “Swedish style” – why does the country attract so many tourists as well as investors?
Elena Zanlorenzi, Head of ResearchEuropean R&D Office
REAG
26.06.2009Stockholm, Sweden
INDEX
4. LEISURE PROJECTS IN PIPELINE4. LEISURE PROJECTS IN PIPELINE
2. INVESTMENT 2. INVESTMENT
3. TOURISM3. TOURISM
1. SWEDEN - A MIDSUMMER NIGHT’S DREAM1. SWEDEN - A MIDSUMMER NIGHT’S DREAM
1. SWEDEN – A MIDSUMMER NIGHT’S DREAM1. SWEDEN – A MIDSUMMER NIGHT’S DREAM
What comes to one’s mind when people think of Sweden?
• Vikings
• Nordic Skiing
• ABBA
• IKEA
• Ingmar Bergman
• Pippi Longstocking
• Social equality
• High standard of living
• Volvo
• Excellent alternative energy programs
• Cell phones
• Midnight sun
• Highly developed technology
• Crisp bread
• Traditional red houses
• H&M
• Vikings
• Nordic Skiing
• ABBA
• IKEA
• Ingmar Bergman
• Pippi Longstocking
• Social equality
• High standard of living
• Volvo
• Excellent alternative energy programs
• Cell phones
• Midnight sun
• Highly developed technology
• Crisp bread
• Traditional red houses
• H&M
1. SWEDEN – A MIDSUMMER NIGHT’S DREAM1. SWEDEN – A MIDSUMMER NIGHT’S DREAM
Outstanding accomodations
The Swedish hotel sector offers a wide range of unique accommodation styles
that bring the country to be considered an unforgettable vacation. Its
outstanding ideas of lodging can easily compete with most prime locations in
the whole world.
• Ice-hotel
• Underwater hotel
• Tree-house
• Jumbo-jet hostel
• Authentic 19th century prison
• Monastery from 1420
• Floating hotel
• Historic underground silvermine
• Traditional forest hut in the woods
• Lighthouse
• Several castles
• A hotel with en-suite ice fishing and a view to the northern lights
• Ice-hotel
• Underwater hotel
• Tree-house
• Jumbo-jet hostel
• Authentic 19th century prison
• Monastery from 1420
• Floating hotel
• Historic underground silvermine
• Traditional forest hut in the woods
• Lighthouse
• Several castles
• A hotel with en-suite ice fishing and a view to the northern lights
2. INVESTMENT2. INVESTMENT
Gateway to invest in Scandinavia
The Scandinavian property market comprises stable countries with sizeable
investment markets, high liquidity and transparency.
Sweden, the largest country, is the natural base for investment in the region.
Stockholm is the natural hub of Scandinavia, thanks to its financial centre
and its reputation to have the most culture offerings per capita in the world.
The Scandinavian property market comprises stable countries with sizeable
investment markets, high liquidity and transparency.
Sweden, the largest country, is the natural base for investment in the region.
Stockholm is the natural hub of Scandinavia, thanks to its financial centre
and its reputation to have the most culture offerings per capita in the world.
Voices about Sweden:
• “EU’s most innovative nation”;
• “Most interesting country for FDI”;
• “The world’s most networked economy”;
• “On top-3 list for international trade”;
• “A world competitiveness leader”.
Voices about Sweden:
• “EU’s most innovative nation”;
• “Most interesting country for FDI”;
• “The world’s most networked economy”;
• “On top-3 list for international trade”;
• “A world competitiveness leader”.
2. INVESTMENT2. INVESTMENT
Four of Europe’s ten most innovative regions are Swedish;
Europe’s 3rd-largest real estate investment market in 2008;
Europe’s 5th-largest cross-border investment location;
Total real estate investment reached € 13.6 billion in 2008;
Investment by international players fell by 47% to € 3.9 billion;
Opportunistic investors left the market but national institutional investors
ensure high liquidity even in difficult times;
Investment focus towards Stockholm, Goeteborg and Malmoe;
Some € 30 billion is being invested in strategic city development and
infrastructure projects in the Stockholm region (until 2030).
Overview
2. INVESTMENT2. INVESTMENT
Direct property investment volume in Scandinavia and cross-borderinvestment in Sweden
Source: REAG work-out on different sourcesSource: REAG work-out on different sources
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Sweden Norway Denmark Finland
bil
lion
€
Cross-border investment by origin in Sweden 2008
18%
14%
13%12%
11%
8%
6%
18%
Denmark France Norway US Netherlands Germany Australia Other
2. INVESTMENT2. INVESTMENT
European comparison of real estate investment volume by city and country
2,063Berlin
2,610Moscow
3,081Stockholm
3,696Madrid
1,831Munich
1,605Hamburg
1,577Brussels
1,960
8,499
11,402
Volume in
€ billion
Copenhagen
Paris
London
Top 10 European cities
Source: REAG work-out on different sourcesSource: REAG work-out on different sources
Largest European investment markets by total transactions 2008
23%
18%
10%
6%
5%
4%3%
19%
UK Germany Sweden France Netherlands Spain Norway Finland Others
12%
2. INVESTMENT2. INVESTMENT
Investment by investor type and destination
Source: REAG work-out on different sourcesSource: REAG work-out on different sources
Investment by destination in Sweden 2008
60%15%
11%
4% 1%9%
Office Residential Retail Industrial Hotel Other
Investment by investor type in Sweden 2008
39%
17%14%
12%
18%
Institutional investors Property funds Private property companies
Listed property companies Other
2. INVESTMENT2. INVESTMENT
Why Sweden?
Use of Standards
(IFRS)
Use of Standards
(IFRS)
High transparancy
High transparancy
Short lead times to deal conclusions
Short lead times to deal conclusions
Simplehandling of mortgages
Simplehandling of mortgages
Documentation is in English
Documentation is in English
Low costs for transferring
assets
Low costs for transferring
assets
High quality of local
advisors
High quality of local
advisors
Key features:
• Smooth and reliable transaction process;
• Easy access to extensive and reliable market
information;
• Uncomplicated taxation structure;
• Minimal transaction risks;
• The legal system is well-suited for cross-border
property investments.
Key features:
• Smooth and reliable transaction process;
• Easy access to extensive and reliable market
information;
• Uncomplicated taxation structure;
• Minimal transaction risks;
• The legal system is well-suited for cross-border
property investments.
3. TOURISM3. TOURISM
Swedish tourism has grown steadily for the past decade and is one of the
fastest growing industries in Sweden;
Since 2002, Sweden’s international tourism revenues more than doubled;
Visitor volumes increased faster than the European average;
The Swedish tourism industry grew to a total turnover of € 20.4 billion in
2008, an annual increase by 10%, while foreign tourists expenditure in
Sweden raised by almost 20% to € 7.1 billion;
Swedish municipalities are printing 4-colored marketing brochures for € 75.9
million a year;
Sweden is investing in tourism development all over the country - everything
from building the worlds biggest wooden moose to indoor rapids, restored
viking villages and witch hotels.
Overview
3. TOURISM3. TOURISM
International comparison of tourism industry’s percentage of GDP and share of national GDP of some Swedish industries
Tourism has a lower impact on the Swedish economy compared to other
countries with a fluctuation between 2.6% and 2.9% from 1995 until now. This
shows though that the tourism industry’s share remains relatively constant.
Tourism has a lower impact on the Swedish economy compared to other
countries with a fluctuation between 2.6% and 2.9% from 1995 until now. This
shows though that the tourism industry’s share remains relatively constant.
Source: Nutek SCB & ETCSource: Nutek SCB & ETC
2.2
2.3
2.4
2.8
3.2
3.5
4.0
4.7
6.4
6.5
11.0
0.0 2.0 4.0 6.0 8.0 10.0 12.0
USA
Canada
Finland
Denmark
Germany
Netherlands
Ireland
Norway
France
Austria
Spain
%
2.9Sweden
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
electricity, gas,heating, w ater
travel and tourism agriculture, forestry,f ishing
mineral mining
%
3. TOURISM3. TOURISM
Tourism industry in brief (annual variation)
Total number of international nights spent: up 2.3%, from which is
- Europe (without Scandinavia): up 1.0%
- Scandinavia (without Sweden): up 2.4%
- Sweden: up 2.0%
- Non-European countries: up 6.4%
Total turnover of the travel industry grew by over 10%;
Since 1993, the total number of nights spent has grown by almost 60%;
Since 1995, the tourism industry has supplied about 50,000 new full-time
jobs (47% growth);
In Stockholm, hotel guests spent on average € 210 per day, while
business travellers spent on average € 265 per day in 2008.
3. TOURISM3. TOURISM
Annual tourism data in Scandinavia
Source: OECD, IkanenSource: OECD, Ikanen
tourist nights spent
33.5%
22.5%
16.0%
28.0%
Sw eden Norw ay Finland Denmark
tourist arrivals
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Sweden Norway Finland Denmark
tho
usa
nd
s
35%
6%
3. TOURISM3. TOURISM
Nights spent from abroad and type of accommodation in Sweden
Source: Nutek SCBSource: Nutek SCB
0 500 1,000 1,500 2,000 2,500 3,000
China
Poland
Spain
Russia
Switzerland
France
Italy
Finland
USA
UK
Netherlands
Denmark
Germany
Norway
thousands
type of accomodation
52%
hotels holliday villages youth hostels camp sites
7%
3. TOURISM3. TOURISM
Tourism turnover and consumption
Total turnover in the Swedish tourism industry has increased by over 90%
at current prices since 1995;
Domestic tourism consumption in Sweden has increased by 65% in the
same time;
Foreign visitor’s consumption in Sweden has increased by 165%.
Swedish leisure travellers account for over 2/3 of total domestic tourism
consumption.
Source: Nutek SCBSource: Nutek SCB
participation of total turnover in the Swedish tourism industry
45%
35%
domestic leisure travellers domestic business travellers foreign visitors
20%
3. TOURISM3. TOURISM
Top 5 counties by number of nights spent (left) and accommodationrevenue (right)
Stockholm 19.2%
Stockholm 19.2%
Vaestra Goetaland 16.2%
Vaestra Goetaland 16.2%
Skane 9.6%
Skane 9.6%
Dalarna 7.8%
Dalarna 7.8%
Kalmar5.4%
Kalmar5.4%
Stockholm 32.6%
Stockholm 32.6%
Skane 9.8%
Skane 9.8%
Dalarna 4.3%
Dalarna 4.3%
Norrbotten3.5%
Norrbotten3.5%
Vaestra Goetaland 15.8%
Vaestra Goetaland 15.8%
Forecast:
• WTO predicts a 12% global increase in international travelling until 2010 and
73% up until 2020;
• For Europe, until 2010 there will be an increase of 10% and 50% until 2020;
• Sweden is outperforming Europe and is following international trends.
Forecast:
• WTO predicts a 12% global increase in international travelling until 2010 and
73% up until 2020;
• For Europe, until 2010 there will be an increase of 10% and 50% until 2020;
• Sweden is outperforming Europe and is following international trends.
3. TOURISM3. TOURISM
Major hotel transactions in Scandinavia – single asset transactions
Source: HVS (2007 – 2008)Source: HVS (2007 – 2008)
Property Location Rooms Sale price in €
Buyer Investor type
Sokos Hotel Helsinki
Finland 202 42,000,000 Exilion Capital
Finnish real estate equity fund
Copenhagen Marriott
Denmark 395 63,000,000 Blackstone Group
International private equity company
Rica Hotel Bodo Norway 113 10,730,580 Norgani Hotels ASA
Norwegian public hotel property company
Clarion Collection Hotel Bastion
Norway 99 16,176,256 Norgani Hotels ASA
Norwegian public hotel property company
Quality Hotel Mastemyr
Norway 152 17,500,000 Home Properties AB
Swedish public hotel property company
Park Inn Oslo Norway 118 21,990,000 Norgani Hotels ASA
Norwegian public hotel property company
Radisson SAS Hotel
Sweden 91 11,037,295 Warimpex Austrian public investment company
3. TOURISM3. TOURISM
Major hotel transactions in Scandinavia – portfolio transactions
Source: HVS (2007 – 2008)Source: HVS (2007 – 2008)
Properties Location Rooms (Number of properties)
Sale price in €
Buyer Investor type
Northern European Properties Portfolio
Sweden 6,477 (39) 805,000,000 CapMan Danish private equity company
Best Western & Quality Park Hotel
Sweden 375 (2) 13,700,000 Pandox AB Swedish public investment company
Norgani Hotels Scandinavia 12,488 (73) 87,454,500 Norwegian Property ASA
Norwegian public investment company
Remmen Hotels Denmark 367 (3) 100,000,000 Nordic Partners
Icelandic private investment company
4. LEISURE PROJECTS IN PIPELINE4. LEISURE PROJECTS IN PIPELINE
The travel industry offers a range of investment opportunities for:
- hotel owners and operators
- theme park operators
- service and infrastructure providers
Potential exists both in cities as well as in the countryside;
There is a real potential for foreign investors on the Stockholm hotel
scene, especially as Stockholm continues to grow as a tourist destination;
Currently, there are few economy class hotel chains established in the
Swedish capital and there are opportunities for more players on the
Stockholm hotel and leisure scene;
Its location, reliability and affordability has developed Stockholm also into
a popular meeting and conference destination.
Opportunities
4. LEISURE PROJECTS IN PIPELINE4. LEISURE PROJECTS IN PIPELINE
Interesting investments coming up
Stockholm: Waterfront Complex
Upplands Vaesby: VillundaparkenStockholm: Hagelby Experience Park
Solna: Arena City
Stockholm: ABBA Museum
Upplands Vaesby: Infra City
Uppsala: Travel Center
Stockholm: Ullna Ski Resort
THANK YOU FOR YOUR ATTENTION!
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