August 8, 2022

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High hotel prices |  DN

High hotel prices | DN

We see that people are willing to pay for quality, says Heig Julien Nevstad.

She is the manager of the Radisson Blu Caledonia in Kristiansand, the southern village, which for June could boast the strongest increase in accommodation income per available room when compared to the previous regular year in 2019.

Income per available room, what is known in the industry for fox pairs, increased 47 percent in Kristiansand. The increase in Stavanger was 40 per cent, in Trondheim 20 per cent and in Tromsø 15 per cent compared to June 2019. Figures from the Benchmarking Alliance show this.

Only Bodo, which doubled its hotel capacity in 2020, has seen a decline in foxes pairs.

Much of the explanation for the improvement in Kristiansand is that at the same time many of the city’s hotels were being renovated, we worked hard to build our foxes and the city. Every day we sit down and analyze demand with the goal of optimizing revenue, says Nevstad.

Price jump without more guests

One could perhaps imagine that the increase in fox pairs, where total lodging income without breakfast and value-added tax is divided by the number of available hotel rooms, was primarily due to the lack of empty rooms. But this is not true. With the exception of Kristiansand and Stavanger, where occupancy increased slightly by 2 to 3 percent, occupancy decreased in Bergen, Gardermoen, Oslo and Trondheim – at the same time that the pairs of foxes increased significantly.

The increase in income is due to the fact that hotels have raised the room rate. In Kristiansand, the average price increased by up to 44 percent compared to June 2019. The increase in Stavanger was 36 percent, in Gardermoen 24 percent, in Trondheim 22 percent and in Bergen 17 percent. In Oslo, where the average June room rate was 1,578 crowns plus breakfast, the increase was 12 per cent, according to Benchmarking Alliance bid figures, which were handled by hotel consultant Peter Wiederstrøm at Wiederstrøm Hotel Consulting.

Hotels do not live on room occupancy alone, nor do they live on room rates alone. If we combine the two, we get an accommodation turnover per available room. It gives a certain indication of whether hotels can operate profitably, says Wiederstrøm and points out that there are large gaps here between cities.

Hotel consultant Peter Wiederström thinks the figures, which show that hotels in the city are raising prices significantly, are a relief.

Hotel consultant Peter Wiederström thinks the figures, which show that hotels in the city are raising prices significantly, are a relief. (Photo: Gunnar Blundal)

– These are symbolic numbers that have not been modified to increase prices. For most cities, the increases in reefs are solid, but not drastically large, as is thought.

– But these are satisfactory numbers in a world that is not normal at the moment, also for hotels. So at the same time, it’s important to keep in mind that June gives almost a glimpse. If we look at similar numbers for the first half of this year and compare them to the first half of 2019, accommodation income per available room in Oslo is down four percent, Gardermoen is down 13 percent, while Bergen, Trondheim and Stavanger all have excess numbers. There are many corals in the sea, but their turnover is too strong for an industry that is under severe pressure. Summer can be good, Wiedestrom says, and fall will be very exciting.

Towards a glorious autumn

The occupancy rate at the Radisson Blu Caledonia in Kristiansand was 81 percent in June — just above the city’s industry average.

– We’re so happy about that.

Dramatically increasing revenue at the same time as the hotel industry has become more efficient through the pandemic?

At least we learned a lot and became more flexible. There are more who know more. And we’ve done a thorough review and clean up of our contracts. Is there anyone we can do without? Someone we can renegotiate? This created a different cost picture and actually enabled us to turn a profit last year. We should do it this year, too. May and June were very good months and reservations for fall are also very good.

– And you won’t be affected by the SAS strike?

– No, it is rather likely that the blow will be positive for us. Most tourists come to Sørlandet from eastern and western Norway in their own cars and do not rely on flights. The fact that many are now missing out on their journey south due to strikes will likely increase demand here in the south. She says, We are southern Norway. (Conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using a link that leads directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For more conditions see here.