Scandic indicates leisure push could be for long term

The ongoing global Covid-19 pandemic has forced hotels to adapt to new customer demands with corporate travel still largely curtailed, that has meant much more of a focus on leisure.

For some businesses this might be a temporary move but the CEO of Scandic Hotels has hinted that it might well be a long-term move for his company.

“In our new portfolio and in a lot of the news hotels coming in we have much more leisure focus on them,” Jens Mathiesen, Scandic’s CEO said on an earnings call with journalists following the release of the company’s second quarter results.

Mathiesen pointed to recent openings in Copenhagen and Helsinki, both of which are better equipped to capture midweek and off-peak leisure.

Almost all hotels are dependent on a mix of leisure and business travel but with fewer employees on the road and uncertainty as to what kind of level demand will return to, hotels are figuring out what to do next.

In the short term Scandic’s leisure offering will mostly target domestic and regional travel. International travel, for example from Germany, is there but at “very low levels” Mathiesen said.

Even before the pandemic struck, leisure travel had been outpacing corporate travel growth.

“It has always been a focus but right now it’s even higher,” Mathiesen said.

Better Times

Demand for hotels improved during the second quarter as lockdown restrictions were eased across much of Europe. Scandic, like other hotel companies, has benefited with its occupancy rate rising to around 20% in April, 25% in May and 36% in June. 

Occupancy in July is expected to be around 55 percent compared with 42 percent during the same month last year. The most significant improvement is evident in the big cities thanks to more entertainment options being available.

Net sales increased 147% to €160 million in the three months until the end of June. Scandic cut its operating loss by 56% to €47.7 million.