Eventful summer in Europe, Link between happy customers and financial results etc

1. Up
GradeM A R K E T I N F O R M AT I O N F R O M PA N D O X
Scandinavia’s
biggest event
in 20118p .
The edited
truth?
5p .
Link between happy
customers and
financial results4p .
Eventful summer in
Europe
S pot l i g h t
trends | g u ests at t h e h eart
#22010

2. The wheels are spinning
faster and faster.
Changes on the hotel
market are quicker, more
dramatic and harder to
analyze. And there have
been several examples of this over the past two
years. In the latest cyclical downturn that hit
the hotel sector in late-2008, the market was
like a runaway train without a driver. Volumes
and prices dropped almost simultaneously and
the time-lag between when different geogra-
phical markets were affected was shorter than
previously. Moreover, the downturn was deeper
than in previous recessions, triggering panic
among investors.
And now we’re seeing the reverse. The recovery is
quicker and steeper than in historical comparisons.
So what’s the reason for this stronger dynamic?
What new drivers have emerged and how are they
interacting? We will be overlooking these issues
during our next Hotel Market Day, which is held on
25 November, and as is customary, at the Hilton
Stockholm Slussen.
The right acquisition – at the right time
On 24 August, Pandox reached an agreement to
acquire Norgani, thus establishing one of Europe’s
leading players on the hotel property market in
terms of geographical coverage, number of hotels,
brands and size.
Several sector colleagues have already con-
tacted me, saying that despite its SEK 10 billion
size, they weren’t surprised by this deal. On the
contrary, several wondered why we had taken so
long to reach an agreement. The companies’ busi-
ness models are similar—they operate on the
same market and both concentrate on Scandina-
via. Although this is obviously correct, what seems
logical on paper doesn’t always work in the
business world.
Let me state two reasons why we did the deal. The
first is that we think this is good timing. When you’re
doing an acquisition of this scale, you need to take a
positive view of the macroeconomic outlook. We
think that we’ll generally see increased demand in the
hotel sector over the coming years. Also, our overall
view is that the exogenous risks probably haven’t
reduced, but they are identified and priced in.
The second reason is that we think that
Pandox’s organisation and companies can add
value and develop the hotels in Norgani’s portfolio.
Partly by us having the financial resources to invest
in hotels and the experience to execute develop-
ment projects. The strategy is to identify the devel-
opment potential of each hotel in close partnership
with their operators and to enhance the hotels’
market positioning with the aid of contemporary
concepts, product offerings, and through new
services concepts. This is easier to say than do. In
total, it will require investments of over SEK 1.5
bn—which is really exciting.
Apart from the Norgani acquisition, in the past
quarter we also acquired Park Inn Solna and the
Brussels Hilton. The Park Inn is located in Solna,
north of Stockholm, and embedded in a major
shopping mall. The Park Inn is in very good condi-
tion and has been Solna’s best urban hotel for many
years, previously with the somewhat outlandish
name Flamingo. Pandox thinks that the segment
this hotel operates in will remain stable, not notably
affected by the new capacity planned in the area.
The Brussels Hilton is an amazing acquisition.
The hotel is in a prime location on Boulevard
Waterloo close to the prime street Avenue Louise.
This hotel has 432 rooms on 26 floors and several
conference floors. The best feature of this acquisi-
tion is the hotel’s potential. It needs an upgrade
and a new, contemporary range of products and
services. We expect this development package to
take at least three years. Anyone who’s interested
can keep up to date on the process via Upgrade
and other Pandox events.
Public event of the year
After the Hotel Market Day on 25 November, it’s
less than 50 days to the handball world champion-
ship, the biggest event in Scandinavia in 2011. This
mega-event is expected to attract some 2 billion
viewers on TV, 1,600 journalists will be reporting on
it, and 100 TV channels are broadcasting matches.
I’m not entirely certain that everyone has under-
stood the scale of the Handball World Champion-
ship, and what an honour it is for Sweden to host it.
So regardless of whether you follow handball or
not, it should almost be compulsory for everyone
to keep their fingers crossed for the Swedish
team—everyone should be praying that none of
our players get injured or ill.
So what are Sweden’s chances? According to
managers Staffan Olsson and Ola Lindgren, we
should qualify for the main round. From then on,
anything can happen…realistically, Sweden may
be one of the five or six top teams. The experts
predict that France, Croatia or Denmark will win.
But regardless of who finally becomes the winner,
we can look forward to some great entertainment
at the top level. Find out more at www.hand-
ball2011.com and buy tickets from www.ticnet.se.
Yours sincerely,
Anders Nissen
PS. The Swedish football league gold medal
goes to Skåne, as if that’s a surprise!
Good things come to those who wait…
Just a word
Address: Pandox AB
P.O Box 5364
SE-102 49 Stockholm, Sweden
Tel.: +46 (0) 8 506 205 50
Fax: +46 (0) 8 506 205 70
E-mail: pandox@pandox.com
Visiting address:
Grev Turegatan 44, Stockholm
Graphic design and production:
Hallvarsson & Halvarsson
Photos: Ulf Blomberg, Peter
Hoelstad, Getty Images, Shutterstock,
et al.
Printing: TMG Sthlm, November
2010. May be reprinted only with the
permission of Pandox.
Cover photo: Hotel Indigo, London
Tower Hill. Find out more under News
on page 3.
Upgrade can be ordered from Pandox
or read at www.pandox.com
Pandox Upgrade.
Market information from Pandox
– published approximately three
times a year.
Editors: Anders Nissen, Anette
Paulsson, Annelie Sundström
Aguilar
2 MARKET INFORMATION FROM PANDOX

3. Hotel World
May
Park Plaza Hotels acquires Holiday
Inn Amsterdam Schiphol for EUR 30
million. This hotel has 342 rooms and
will be renamed Park Plaza Amsterdam
Airport.
The budget chain Travelodge invests
EUR 62.4 million in the development of
13 new hotels. Four of these will be in
London, the rest throughout Europe.
This will result in an extra 1,224 rooms in
total.
June
Starwood Hotels & Resorts opens its
244-room Westin Hamburg Hotel
through a joint venture. This hotel will be
part of the Elbe Philharmonic Hall com-
plex currently being built in Hamburg.
This will be the city’s first Westin hotel.
Rezidor Hotel Group and Carlson
Hospitality Group sell their luxury chain
Regent to the Taiwan-based Formosa
International Hotels Corporation for a
total of EUR 9.5 million.
Hilton opens two hotels in Poland.
Doubletree by Hilton Warsaw Confe-
rence Centre and Spa, with 347 rooms,
will be opening in Warsaw in Q2 of
2012, while Doubletree by Hilton Lódz
will be opening in the city of Lódz in Q4
of 2012.
July
Starwood Capital and London &
Regional join forces to buy London’s
Cumberland Hotel, with its 1, 019
rooms. The hotel is being sold by the
Royal Bank of Scotland, and the selling
price is rumoured to be around EUR
215 million.
Gresham Hotels sells its 188-room
Park Inn Hyde Park for EUR 35 million to
an unknown buyer.
Hotel Indigo London Tower Hill, the
second Indigo hotel in London, opens.
The property is owned by the Thai
Square Group and the hotel is sited in
converted offices.
Budget chain Travelodge enters into a
contract relating to the running of 52
Innkeeper’s Lodges. This increases the
Travelodge portfolio to 452 hotels in the
United Kingdom, Ireland and Spain.
The Golden Tulip Hospitality Group
enters into a franchise contract for a
new hotel in Amsterdam. The former
Hotel Terminus is renovated and con-
verted into the Tulip Inn Amsterdam
Centre, with 110 rooms.
Courtyard by Marriott Bremen beco-
mes Marriott International’s first hotel in
Bremen. This hotel has 155 rooms and
is situated in an old railway building.
Starman Hotels has sold Le Meridien
Piccadilly in London to Host Hotels &
Resorts. The selling price for this 266-
room hotel is EUR 64 million.
August
Hilton Worldwide launches a new
identity for its biggest brand and adds
“& Resorts” to its name. Its logo is upda-
ted with a new blue tone and a new font.
The new identity for Hilton Hotels &
Resorts aims to project a more holistic
vision of the brand’s global portfolio.
Bank of China makes its first invest-
ment in a hotel in the United Kingdom
and buys InterContinental Queen
Anne’s Chambers, with its 254 rooms.
This hotel will be opening in the latter
part of 2011, in time for the Olympics in
London.
Pandox enters into an agreement
concerning the acquisition of Norgani
Hotels. The acquisition includes 73
hotels and one congress facility in Swe-
den, Finland, Norway and Denmark, and
the acquisition price is SEK 9.9 billion.
Malta-based Corinthia Hotels
plans to open its ninth hotel in London.
This hotel will have 294 rooms and is
mooted for completion in 2001.
September
Starwood Hotels & Resorts opens its
first Aloft in Europe. Aloft Brussels
Schuman, with 147 rooms, is in the EU
district in Brussels and is Starwood’s
fifth hotel in the city.
Pandox buys the 432-room Brussels
Hilton on Boulevard Waterloo in the
heart of Brussels. This is the company’s
sixth hotel in Brussels, and with another
two hotels in Antwerp Pandox now has
a total of eight hotels in Belgium.
Accor enters into three franchise
agreements in London. These agree-
ments relate to Mercure London
Bloomsbury, with 109 rooms, and two
All Seasons hotels with 100 and 139
rooms respectively.
InterContinental Hotels enters into a
contract relating to 2,375 new hotel
rooms in the United Kingdom, Spain,
Portugal, Germany, France, Russia and
Turkey. These new hotels include a
Hotel Indigo, a Staybridge Suites, a
Crowne Plaza, four Holiday Inns and
nine Holiday Inn Express hotels. These
hotels are estimated to open between
2011 and 2014.
Richard Branson is entering the hotel
industry and launching Virgin Hotels, a
four-star lifestyle hotel. His aim is to
have 25 hotels by 2017. The initial
launch will take place in major cities in
North America.
Pandox enters into a contract
concerning the acquisition of Park Inn
Solna, north of Stockholm. This hotel
has 247 rooms and is located in the
Solna Centrum shopping centre.
October
Westmount Hospitality enters into a
purchase agreement with Strategic
Hotels & Resorts concerning the
acquisition of InterContinental Prague,
with its 327 rooms.
Sol Meliá opens its second hotel in
London. This Spanish hotel chain has
acquired City Bank London for EUR 133
million and the property is now being
converted into a hotel.
News
MARKET INFORMATION FROM PANDOX 3

4. Value
a smile
With a tough year behind us and anything but an easy and straightforward
recovery to come, the hotel industry has to keep its strength up. A recent
survey shows there are links between happy customers and financial
results, and so there we have it, in black and white: we can’t rest on our
laurels if we want success.
Industry study
During times of economic downturn, we’re kept
busy because there’s more competition for the
declining numbers of guests. But when the signs of
growth can be perceived, we can’t just sit back
and relax. This is the point at which hotels have to
both retain the customers they managed to entice
in during the downturn while at the same time
grabbing their fair share of the increasing demand.
And throughout all this, we have to make sure our
customers are all happy.
Consistent service pays off
Happy customers don’t just come about because
a hotel is doing one thing right. The only time really
happy customers come about is when a number of
things are handled consistently well. Manuals,
systems and methods which are complied with,
followed up and rewarded are a must for any hotel
that wants to do more than just survive during an
economic downturn. These are also the hotels that
are champing at the bit to progress when the tide
turns and that are able to make the most of the
upswing.
J.D. Power and Associates have carried out a
customer satisfaction survey in the hotel industry
for the 14th successive year. This study, which was
carried out over a period of a year and involved
more than 53 000 guests, proves that there is a link
between happy customers and financial results.
Above all, there are four important areas that are
fundamental to the economic success of the
business. If customers are happy in all four cate-
gories, there’s more likelihood of them buying more
in restaurants, spas, mini bars and suchlike.
First impressions count
The most important aspect of customers’ overall
impressions is to make sure the booking is correct,
followed by straightforward check-in taking less
than 5 minutes. Making sure their stay is com-
pletely without problems comes in third place, and
making sure their visit ends with a correct invoice is
fourth.
This study also shows the monetary effect of
different levels of satisfaction. While a customer
overwhelmed with pleasure will spend 48 dollars
more during a successful hotel stay, a happy
customer will spend just 40 dollars more, and an
indifferent customer will spend just 32 dollars more.
But not only will happier customers spend more
money there and then; they’ll also spend even
more during subsequent visits! During return visits,
the customer overwhelmed with pleasure will
spend 58 dollars more, while the indifferent
customer will spend just 38 dollars more.
Check the booking process
The function and quality of the booking channel are
significant as booking and check-in are of most
importance to customers. Nowadays, more and
4 MARKET INFORMATION FROM PANDOX

5. The edited truth?
The market on the market
New economic patterns mean
huge uncertainty. A strong reco-
very from a deep recession and a
good first six months of the year
mean that some people are having
problems controling their enthusi-
asm. But really, where are we at?
A double-dip recession and poor credit risks have
been hot topics for more than six months now.
Has the economy really reached its lowest point
and do we dare believe the recovery is upon us,
or could there be another dip? When will the
banks be forced to sell their hotels, or will they
stubbornly hang onto them until they know the
outcome of the prevailing financial unrest?
The right time is NOW
Jim Butler at HotelLawBlog.com is sure in any
case that the market has reached the bottom,
and he wants to help get things moving again. In
capital letters, he declares that “NOW could be
the best time for lending to the hotel industry
since the early 1990s”. He reckons that anyone
waiting a year or two to get into the industry will
risk missing the best business opportunities. At
the bottom of the dip, parties that have been
burnt in the crash and weak opponents reluc-
tantly agree to tougher loan demands, and profit-
able contracts can be entered into. We hardly
need ask for whom.
Anyway, it looks as though there are more peo-
ple who are thinking like Jim. The appetite for
deals has definitely increased over the past six
months, as demonstrated by the figures for the
global transactions, which rose by 45 per cent
over the period. The biggest increase has been
noted in the Americas, which during the first six
months of the year exceeded the transaction vol-
ume for the corresponding period in 2009, ending
up at USD 2.5 billion dollar. This is the first time
since the fourth of 2007 that the transaction vol-
ume in the Americas has been in line with the
EMEA region. Europe Middle East Africa rose by 8
per cent over the period to USD 2.2 billion.
The globally financed funds are starting to
recover after having rested in 2009. And we’ve
also seen a gradual increase in portfolio transac-
tions, which over the first six months of the year
represented a third of all transactions, compared
with just 10 per cent a year ago.
The second six months of the year has contin-
ued to be strong, and in October Jones Lang
LaSalle increased its full-year forecast for hotel
transactions in the USA by more than 40 per cent.
Splendid celebrations
Vasant Prabhu, Head of Finance at Starwood,
believes the market won’t really get going again
for a few more years. A couple of hotels here and
there will have new owners, but he reckons the
really major portfolio transactions will take place
only once the global economy has healed.
Despite this cautious believe, Prabhu and his col-
leagues are acting in the true spirit of the 1980s.
To celebrate the opening of the company’s latest
W hotel in New York, its managers met up at the
New York Stock Exchange to participate in the
opening of the stock exchange. Female models
wandered about the trading floor and handed out
biscuits, snacks and W-shaped cufflinks to the
brokers.
High-price hotels in the pipeline
We live in strange times. A decline classed as one
of the worst in history was followed by a record
recovery. Some people believe the recovery has
gone so quickly that the recession has already
been forgotten. So who’s doing things right, and
who’s doing them wrong? Both Jim and Vasant
seem to believe we’re in for the ride of our lives,
anyway. And if we look at the hotels in the pipeline
in Europe, it seems that more people are expect-
ing the upswing to happen any time now. Of all
the future hotel projects in Europe, 40 per cent
involve high-price hotels.
But are things really quite that easy? The world
we live in now is very different to 20 years ago. The
global economy has surprised us more than once,
and we can no longer rely on historical trends.
But never before have we been in a situation in
which the whole world has been in such financial
trouble simultaneously. Globally artificial low inter-
est rates, tax subsidies and public investments are
the cause of the present patterns. So what’s going
to happen once the effects of these stimulants has
subsided, and what will happen next when all the
assistance gradually starts to be withdrawn?
Satisfied customers spend more money than unhappy ones.
Increase your sales by offering these priority measures.
Always have a smile on your face!
Service at Hotel Berlin, Berlin, an independent
hotel owned and operated by Pandox. Cornelia
Kausch is the manager of the hotel.
more people are booking hotel rooms online and
these numbers are increasing year on year.
Customers booking via hotels’ own websites
appear to have a better overall impression of their
hotel stays than customers who book via inde-
pendent distribution channels.
To make customers happy and so achieve good
financial results, therefore, we need to invest time
and money to reach customers as early on as pos-
sible. The more elements of the process that the
hotel can control, the better. The function and
attraction of websites is more important than you
might think. This is where the journey to enhanced
profits begins!
Increase your profits!
1. Correct bookings
2. Check-in within 5 minutes
3. Problem-free stay
4. Flawless invoice
MARKET INFORMATION FROM PANDOX 5
Transaction volumes
USD billions
0
1
2
3
4
5
6
7
Jan–Jun 2010Jan–Jun 2009
Americas
1.0
Americas
2.5
EMEA
2.2
EMEA
2.0
Asia Pacific
1.4
Asia Pacific
2.5
Source: Jones Lang LaSalle Hotels
Reality or not – transactions have nevertheless increased
massively over the first six months of 2010.

6. Demand increasing on a broad front.
The recovery is well under way in
both the US and Europe. Many cities
in Europe have also been given a
helping hand by a number
of events over the summer, which
in turn have led to record figures.
The American hotel market has increased its occu-
pancy by more than 5 per cent over the first three
quarters of the year, while the price remains almost
1 per cent below last year. The luxury segment is
seeing the biggest increase, mainly in terms of occu-
pancy. The average price in this group is just about 1
per cent higher than in 2009. In terms of pricing, the
big cities have seen the best results.
If we look at New York overall, occupancy and
price have increased with about 7 per cent respect-
tively. And for YTD September the city is around 15
per cent above 2009 levels. In September alone, on
the other hand, the price was up no less than 12 per
cent while occupancy was up by just 1 per cent.
Fashion setting records in London
The growth has really made progress in Europe as
well. The summer in particular has been especially
strong in many locations. June is a traditionally
strong month in London, partly thanks to the com-
mercially strong Wimbledon. The Farnborough Air
Show, which is held every two years, also had its
part to play. And in the third quarter both occu-
pancy and the average price were there for the tak-
ing at London hotels during London Fashion Week
and the London Design Festival.
In July, London saw 94 per cent occupancy,
which according to research company TRI is the
highest level seen for any one city in Europe over
the decade they’ve been analysing the European
hotel market. The competetive group includes no
Strong
event market
in Europe
Record figures over the summer
Focus on the market
fewer than 50 hotels, which indicates strength over
a broad front. Growth has continued, and in Sep-
tember the city was seeing a growth in RevPAR of
18 per cent. RevPAR is at a high level for YTD Sep-
tember as well, closing 12 per cent above the pre-
vious year, with the average price up by almost 9
per cent and occupancy up 3 per cent.
Strength in the leisure segment
The strength lies in the leisure segment above all,
thanks to major events. Overall travel to the United
Kingdom was down, and over the twelve months
to June 2010 business travel was down 5 per cent
while holiday travel was up 2 per cent.
Paris was also given a boost by demand in the
leisure segment but is having difficulties increasing
its prices in the business segment. In June, the
French Open helped to create interest in the city,
and the summer months ended with 11 per cent
growth on last year thanks to slightly stronger
growth in occupancy than average price. July was
strong too, while August was less so. After a very
strong September, the city is now 10 per cent
above 2009 levels for YTD thanks to growth of 4
per cent in occupancy and 6 per cent in average
price.
The parade of events is continuing throughout
Europe. Berlin and Amsterdam are other cities
which have strong events to thank for their growth
over the summer. Amsterdam saw the classical
music festival Grachtenfestival, the Uitmarkt sum-
mer festival and Gay Pride – all in August. The
number of visitors for these events amounted to
45,000, 500,000 and 500,000 respectively, result-
ing in occupancy increasing by 13 per cent and the
price increasing by 20 per cent over the month.
September has continued strongly as well, with a
RevPAR increase of 20 per cent. For YTD Sep-
tember, the city is up 13 per cent on the previous
6 MARKET INFORMATION FROM PANDOX
The Eden Rembrandt Square Hotel was one of the hotels recommended on the Amsterdam Gay Pride website. The city hosted three
major events in August, and with its 500,000 visitors Amsterdam Gay Pride was one of the biggest.

7. year, of which there’s been a 9 per cent increase in
occupancy.
The Carnival of Cultures took place in Berlin in
May, followed by the Berlin Gay and Lesbian
Festival and Gay Pride in June. RevPAR was up 23
per cent in June and, and the first six months of the
year ended 12 per cent up on 2009. Berlin has
seen a 12 per cent increase at YTD September
compared with the previous year.
Good third quarter in Stockholm
Scandinavia is trailing the major European cities to
an extent, but the increase in demand is now
showing signs of taking effect in Stockholm. Travel
to and from Stockholm has increased massively.
Traveller numbers for Arlanda Airport grew with
more then 10 per cent in September, for the third
month in a row. International travel saw the biggest
growth (16 per cent) in September, compared with
a 10 per cent increase in domestic travel.
The hotel market at Arlanda airport was up 67
per cent in August, confirming the increase in activity
at the airport. The market group has seen a 22 per
cent increase at YTD September compared with the
previous year. Occupancy is up by around 15 per
cent, while price is up by more than 6 per cent.
In the City of Stockholm, RevPAR is up 11 per
cent for YTD September. This includes both the
wedding of Crown Princess Victoria – which itself
wasn’t the boost the market had been hoping for
– and a congress for cardiologists. Congresses and
conferences carried on trickling into the Swedish
capital in September.
Gothenburg and Malmö waiting for growth
The City of Gothenburg group also saw an
increase in the summer thanks to plenty of con-
gresses. The Gothia Cup, Partille Cup and 2010
World Masters Swimming Championships brought
sporty guests to Gothenburg in summer. Pink also
held a major show in the city in July. Despite all the
big attractions, the City of Gothenburg group is
continuing on a par with YTD September. Things
look even worse for Malmö’s four star city group.
RevPAR is down almost 9 per cent on last year for
the January to September period. Occupancy is
down 5 per cent, price is down 4 per cent. The
Municipality group is losing more in terms of
occupancy than average price.
MARKET INFORMATION FROM PANDOX 7
Hyatts Andaz on Liverpool Street in London was one of the supporters of the London Design Festival and did well in late summer.
A strong summer gave New York a boost. The city is up
15 per cent at YTD September.
The city hosted London Fashion Week and the London Design
Festival in summer, as well as an annual airshow. London is up
12 per cent at YTD September.
Three major festivals visited by over a million people gave Amsterdam
a boost, and the city is up 13 per cent at YTD September. Berlin saw
a strong early summer but was weaker in August. The city is up
12 per cent at YTD September. The French Open brought people to
Paris, and the city was up 10 per cent at YTD September.
–10
0
10
20
30
40
SepAugJulJunMayAprMarFebJan
–10
0
10
20
30
40
SepAugJulJunMajAprMarFebJan
–10
0
10
20
30
40
SepAugJulJunMayAprMarFebJan
NY London Amstersdam, Berlin, Paris
ParisBerlinAmsterdam
% % %
New York, RevPAR 2010 London, RevPAR 2010 Amsterdam, Berlin, Paris, RevPAR 2010

8. Sweden
PEAK
UmeåDecline
Jönköping, Lund, Malmö
Growth
Karlstad, Uppsala, Stockholm,
Stockholm 5
Levelling out
Sundsvall
Lund is continuing its losses on a rolling twelve-
month basis. August was strong, as in most
places, but its overall trend is downwards. After a
strong summer, Helsingborg is 2 per cent above
the RevPAR for 2009 at YTD September.
Gothenburg is starting to show signs of recovery,
and a positive RevPAR was seen in five out of the
first eight months of the year. Karlstad is picking
up, and occupancy in particular is on the increase.
By YTD September, the price was down 0.3 per
cent, while occupancy was up by almost 7 per
cent.
Things are tougher in Malmö, and both average
price and occupancy are down. Despite an
increase of 15 per cent in August, RevPAR for YTD
September is almost 4 per cent down on last year.
Occupancy is down by about 4 per cent, while
price is down by just under 1 per cent. In the five-
star segment in Stockholm, occupancy and price
are increasing to the same extent. Strong events
and conferences have affected the city and the
segment, and these activity levels are continuing in
the autumn.
Market overview, September 2010
Decreasing decline
Gothenburg, Luleå, Helsingborg
Scandinavia’s biggest
event in 2011
– a multicultural festival!
In January 2011, most hotels in Central and
Southern Sweden will be occupied by 24
handball teams from all over the world. Spon-
sors, the media and handball lovers will also
be filling hotels all over Southern Sweden.
The World Handball Championships will be
taking place from 13 to 30 January 2011, and
one of the aims of the championship is to
create a multicultural festival which extends far beyond the bounds of the
handball arenas.
Tickets are available from www.ticnet.se. They’re selling fast, so hurry
up and book now!
The market barometer shows where selected cities lie in the business cycle.
Assessment is based on analyses of each location. Allowance is made for
macroeconomic developments, developments within the hotel industry, the
business cycle, progress in the hotel market and how well developed and liq-
uid the hotel property market is. Note that hotel business cycles are similar in
pattern but different in time.
Pandox market barometer
8 MARKET INFORMATION FROM PANDOX

9. PEAK
– Decline
Oslo
Growth
London, Berlin, Amsterdam,
Paris
Levelling out
Brussels
International
London has seen good growth and at YTD Sep-
tember the city was 12 per cent up on last year
with a 9 per cent increase in price. Berlin has also
seen three good quarters, and like London it has
closed at 12 per cent up. Here, too, the growth in
price is approaching 9 per cent.
Occupancy has started to recover in Helsinki,
but the price is still falling. The city is in a positive
position at YTD, but it is still seeing a negative on a
rolling 12-month basis, including a fall in average
price of close to 6 per cent compared with last
year. In Copenhagen, occupancy has started to
recover but price has seen a severe drop. At YTD
September, the price is 11 per cent below the level
for 2009.
Prague stands at a RevPAR down 2.5 per cent
at YTD September, despite a fantastic August
which closed 23 per cent up on 2009. This entire
downturn is due to a price loss; occupancy is up
by more than 9 per cent. A fantastic event market
in Amsterdam is helping the recovery. The city
closed at almost 13 per cent growth at YTD
September, with an increase in both average price
and occupancy.
Decreasing decline
Helsinki, Copenhagen, Prag, Vienna
Defining the various facets of the hotel business cycle:
Growth Occupancy is rising relatively rapidly and prices are starting to rise.
High potential and low risk.
Peak Occupancy rising/levelling off and prices increasing rapidly.
Good potential and low risk gradually rising to high risk.
Decline Occupancy and prices decreasing due to lower demand or overcapacity.
Low potential and high risk.
Decreasing decline Decreasing volumes becoming more stable – continued
pressure on prices. Some potential and high risk.
Levelling out Occupancy rising with unchanged prices.
High potential and decreasing risk.
MARKET INFORMATION FROM PANDOX 9

10. Know your gue
for success
The lifestyles and values of guests
characterise the design at any
successful hotel. At least, that’s how
it is if you believe the most success-
ful hotel designers of our time.
Focus on guests, not the hotel.
To create a successful hotel, you have to keep tabs
on your customers and be familiar with your sur-
roundings. Knowing the big stuff and the small
details alike as regards what the city has to offer,
what today’s travellers want to do and how they
behave.
So what defines your target group?
We used to refer to demographics. You analysed
your customers and pigeonholed them depending
on their sex, jobs and interests and then created
hotels to suit your customer type. Nowadays, psy-
chographics is used to define target groups. This
focuses on customers’ behaviour and psychologi-
cal characteristics instead by charting factors such
as lifestyles, values and personalities. This
approach is particularly important for lifestyle and
boutique hotels which attract guests for reasons
other than their geographical locations and the
range of services.
One good example of this is the California-
based hotel chain Joie de Vivre, which has opted to
target the readership of a popular specialist maga-
zine. Readers of the legendary Rolling Stone
Magazine are the target group for this chain’s
Phoenix hotel in San Francisco.
Lifestyle – a rebellion against the norm
The design trend, normally referred to as lifestyle,
design or boutique hotels, came into being in 1981
as a reaction against the gigantic, standardised
hotels that were the norm in those days. The first
hotels came into being at about the same time in
both San Francisco and London, pioneered by Ian
Schrager and Philippe Starck.
Australia’s most popular hotel designer, Joseph
Pang, who’s worked in the industry for 30 years,
says that when he started his career, the brand was
by far the most important consideration when
creating a design, and rooms really had to look like
hotel rooms.
“Nowadays modern hotel rooms feel more
homely; they’re familiar, they’re restful, you can feel
comfortable there and you get that feeling as soon
as you check in because everything feels homely,”
says Joseph Pang. Schrager also emphasises the
importance of feeling at home when he describes
one of his current projects, EDITION Hotels, which
he’s working on together with Marriott.
But do we really want to feel at home when
we’re staying at a hotel? And do we actually feel at
home?
The stressed business traveller who’s left the family
at home can sit undisturbed and work from an
elegant designer sofa in a “living room” 100 sq m in
size. She sits with a glass of full-bodied red wine in
one hand, one eye on the TV and a laptop on her
knee. In the hotel room, she finds fresh flowers in
an unnecessarily large vase, guaranteed to be
breakable, and bathroom with strong, pale marble
that shows every little hair or speck of dust.
Is that the way things are at home? No: it’s a
dream, vision, an escape, a form of compensation
for the pressure we live under.
Hotels guests at The Phoenix in San Francisco
are all readers of Rolling Stone Magazine.
Trends: THE GUEST AT THE HEART
10 MARKET INFORMATION FROM PANDOX

11. … 100 per cent occupancy for more than
a month is possible! The Amari Boulevard
Bangkok, with its 309 rooms, had 100 per cent
occupancy for 35 days in a row last summer. Of
course, the director of the hotel is very pleased
about this and hopes it’s a sign that tourism is
making a comeback.
…you can spend a night in London for £9!
Hotel chain Tune Hotels is using the business
model applied by the cut-price airlines, with low
basic prices and supplementary charges for
optional extras. You can have your room
cleaned for £7.50, and getting your hair blow-
dried in the morning will cost you £2 extra.
…a housekeeper earned more than 7,000
dollars in a day! A group of missionaries
accidentally left 6,000 dollars in a room at Miami
International Airport Hotel, and housekeeper
Mydil found it. She handed it in to her boss
straight away and he was able to return it. This
impressed people so much that they sent loads
of money to the hotel and its housekeeper. By
the end of the day, Mydil had been given 7,535
dollars to thank her for her honesty.
…bad smells don’t bother high-price guests.
A survey shows that guests at high-price hotels
most often complain about poor check-in
procedures and noise that disturbs them. In
the economy segment, people complain most
about cleaning and bad smells.
sts
When Joseph Pang designs a hotel, he wants it to feel like home. Above,
his work on the InterContinental Sydney.
Shaping the times in which we live
Fashion designer Yves Saint Laurent was a true master when it
came interpreting the world about us and creating fashion that
reflected social and cultural changes. One clear example of this was
when he created a trouser suit – for women. Jeffrey Ornstein,
founder and CEO of J/Brice Design International, views Laurent as a
role model in the art of reading people and the times in which we
live. “In the hotel industry, we have to learn how to read people and
we have to focus on them, not on the hotel.”
The Burj al Arab in Dubai is proof that it’s possible to make as
much of an impression in time as Yves Saint Laurent made with that
trouser suit for women. The sail-shaped building of the Burj al Arab
placed Dubai firmly on the map. The country has almost become a
brand in itself, with the silhouette of the hotel as a logo, the modern-
day answer to the Eiffel Tower.
“We have the opportunity to interpret the cultural winds of change
and create guest experiences that are in line with our times and cre-
ate memorable hotels for the future,” says Jeffrey Ornstein, who’s also
in favour of us working to surpass customers’ normal everyday lives.
A home fit for a king
Ornstein is currently working on a design for a new property in Saudi
Arabia. This hotel will be pitched to customers including everyone
from top French models, powerful cattle owners from Uruguay and
managing directors from major American corporations. It’ll be inter-
esting to see what design Ornstein’s psychographic analysis turns
up, particularly because he wants to create an experience that sur-
passes hotel guests’ everyday lives - in this case elegant apart-
ments, magnificent properties and private jets. These guests have
to be simply captivated by their surroundings!
Didyouknow...
A little bit of everything
from various corners
of the hotel world
MARKET INFORMATION FROM PANDOX 11

12. Facelift for Radisson Blu Hotel Malmö
Around SEK 80 million has been spent on giving the Radisson Blu Hotel Malmö a new face. This hotel now
boasts two completely new room styles; its Natural Cool standard rooms and its New York Mansion busi-
ness class rooms.
This Malmö hotel is one of the first in the chain to offer these room concepts, and soon guests all over
the world will be able to stay at other Radisson Blu hotels in conditions that are every bit as comfortable
and as stylish. One unique aspect of the hotel in Malmö is that all 229 of its rooms are still 43 sq m in size;
rooms that other hotels would call suites.
The Radisson Blu Hotel Malmö is one of the first hotels in the chain to launch the new room concept.
Minister breaks a shell to open
Pelican Bay’s Canal House
Hubert Ingraham, the Prime Minister of the
Bahamas himself, officially opened the Canal
House for Pelican Bay by donning safety goggles
and broke a large shell with a sledgehammer.
Hotel manager Magnus Alnebeck gave an opening
speech, saying:
““We are delighted to open the Canal House
and introduce a totally new product in design
and features to our community. We want every
business person to know that Pelican Bay is the
hotel of choice when visiting, meeting or maybe
being married on Grand Bahama Island.”
The opening of the new conference facility
was attended by many influential people in the
Bahamas and received a lot of media attention.
Hubert Ingraham, Prime Minister of the Bahamas, wore safety
goggles to break a shell with a sledgehammer, and then he
declared the Canal House open.
“Bien Belge Living Lounge”
at Hilton Brussels City
Hilton Brussels City has recently renovated its
lobby and restaurant, creating more of a boutique
feel with a cosy atmosphere. The new “Bien Belge
Living Lounge” restaurant and wine bar offers
Belgian specialities.
The newly renovated “Bien Belge Living Lounge” restaurant
at Hilton Brussels City.
Colourful in Berlin
Hotel Berlin, Berlin, one of the leading event hotels in the city, knows just how to attract attention. During
the Berlin festival of light, the hotel produced a colourful light show on the front of the hotel. This lighting
system is an example of how the hotel can be converted into various forms based on colour, theme or
brand. “This unique concept means we’re able to provide our customers with custom solutions to under-
pin their events and profiling – the options are pretty much boundless when we use colours, light, film,
photos, logos or other graphics,” says hotel manager Cornelia Kausch.
Pandox has completed its acquisition of
hotel property company Norgani AS since
its terms for the deals were met. With this
acquisition, Pandox has created one of the
top hotel property companies in Europe,
with a portfolio that includes 121 hotels and
25,000 rooms in ten countries.
Norgani acquisition
complete
Pandox news
News from the world of Pandox
Scandic Grand Marina, Helsinki.
12 MARKET INFORMATION FROM PANDOX