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Reykjavik Hotel Prospectus

Reykjavík Hotel Prospectus 2

II. Tourism III. Events IV. Opportunity V. Pipeline I. Introduction

16% RevPar increase in

2015

82% Occupancy in

downtown Reykjavík

37% projected increase in

incoming tourists in

2016

98,3% of guests would

recommend Reykjavik

4.000 Hotel room supply in

end of year 2015

3,3 Million room nights

sold in 2014

3 Reykjavík Hotel Prospectus

Tourism is the fastest growing business sector in Iceland with incoming tourists growing more than threefold in ten years Key markets are USA, UK, Germany, France, and the Scandinavian countries. Tourism in Iceland is focused around Reykjavik with 95% of foreign guests visiting the capital and around 80% of tourism turnover taking place in Reykjavik The city of Reykjavik supports the growth in tourism and is offers investors assistance and new sites for hotel developments

Reykjavík Hotel Prospectus

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1.200

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2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

In t

ho

usa

nd

s

In m

illio

ns

Foreign tourist arrivals and overnight stays in all types of accommodation

Icelanders (left axis)

Foreigners (left axis)

Foreign tourists arrivals(right axis)

Since 2010, tourism in Iceland has shown strong growth figures. The Reykjavik hotel market has been growing in line with the increasing numbers of tourists. Of foreign summer visitors, 87-91% stayed in Reykjavík as well as 91-95% of winter visitors in 2004-2014. The overnight stays of foreigners were 4,4m in 2014, increasing from 1,1m in 2000. Hotel and guesthouse room availabilities have been a limiting factor and the accommodation market is trying to keep up.

Source: Icelandic Tourist Board


Iceland ranks 12th among the world’s most business friendly countries according to the World Bank’s Doing Business 2014 report.

4

is the average booking time prior to departure by foreign visitors

of surveyed tourists in January to April 2015 stated that they would recommend Reykjavík as a place to visit – women were slightly more positive

is the average daily spend of tourists in Reykjavík

3 months

98,3%

30 thousand

of foreign visitors are high income individuals or over average compared to country of origin 51%

Do you recommend Reykjavík as a place to visit?



1,26 million tourists came through Keflavik Airport in 2015; almost four times the Icelandic population

Annual seasonality is gradually decreasing, but is still above world and EU averages. The most growth is seen in the summer season.

According to a 2014 survey, foreign visitors in Reykjavík had estimated to stay 11,7 nights in Iceland on average, of which 4,9 nights in Reykjavík.

Winter visitors stayed on average 3,6 to 4,0 nights in Reykjavík, approximately 68-74% of nights in Iceland. Summer visitors stayed on average 3,1-3,4 nights in Reykjavík, 30-36% of their nights in Iceland.

Arion bank analysts project close to 2 million tourists in 2018 but emphasize at the same time the substantial uncertainty in their forecast.

781.016 969.181

1.261.938 1.512.908

1.768.589 2.019.729

20,7% 24,1%

30,2% 19,9%

16,9%

14,2%

0,0%

10,0%

20,0%

30,0%

40,0%

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500.000

1.000.000

1.500.000

2.000.000

2.500.000

2013 2014 2015 Proj.2016

Proj.2017

Proj.2018

Foreign tourists’ arrivals at Keflavik Airport

20,6%

12,9%

3,6%

10,4%

15,1%

3,0%

-1,7% -1,1%

17,8% 19,6% 20,7% 23,1%

27,5%

-10%

0%

10%

20%

30%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Arrivals of tourists via Keflavik Airport YOY% change


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0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Other

Health/medical treatment

Horsemanship

Business relations

Conference/meeting

Education or research

Particular event

Health and well-being

Friends/relatives in Iceland

The possibility of a stopover

Good offer/cheap flights

Icelandic culture/history

Icelandic nature

What had a major impact on your choice to visit Iceland (summer 2014)


Nature is the main attraction for tourists

Source: Icelandic Tourist Board report

2.750 2.711 2.866 2.978

3.101 3.318

4.000

58% 55% 63%

74% 74% 78%

79%

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500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

2009 2010 2011 2012 2013 2014 2015

Hotel room supply and occupancy in Reykjavík

Hotel room supply Hotel room occupancy


83% 82% 80% 79% 79% 78% 77% 76%

74% 73% 73% 72% 71% 70% 69% 69% 69% 68% 66% 66%

64%

60%

50%

55%

60%

65%

70%

75%

80%

85%

Lon

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kjav

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reat

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Du

blin

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fast

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ch

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Occupancy rate in Europe 2014

Reykjavík Hotel occupancy has increased steadily in the most recent years and has become very competitive compared to other European cities

Source: Arion Banki report Source: Arion Banki report and Iceland Tourist Board



+24%

+17%

+15%

+10%

+16%*

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2010 2011 2012 2013 2014 2015

Tho

usa

nd

ISK

RevPAR in Greater Reykjavík

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1 2 3 4 5 6 7 8 9 10 11 12

Tho

usa

nd

ISK

RevPAR in greater Reykjavík

2013 2014 2015

Revenues increase substantially in 2013-2014 thanks to higher occupancy rates

Source: Arion Banki report Source: Arion Banki report

Conference city The objective is to be one of the most popular venue cities for conferences and events in Northern Europe by 2020

Key elements: quality, experience, events, food

Winter city Reykjavík can become a popular destination all year round. Several popular winter events have been increasing number of visitors in the winter.

Key elements: Darkness, romantic, design, shopping

Cultural city The city is to become a meeting point for different trends and currents and for its cultural life to be characterized by its cosmopolitan dimension and cultural uniqueness.

Key elements: Cultural activities, the arts, festivals, events, city centre.

Health city Reykjavík’s uniqueness lies in proximity to unique nature and its unpolluted environment as well as use of pure energy.

Key elements: Environment, water, nature, wellbeing


The four pillars of Reykjavík tourist strategy to 2020



Air connections Reykjavik’s International Airport, Keflavik International Airport is located 45-minutes from the city center and offers 35 daily destinations to key cities in Europe and North America. During summer this number rises to 65. Flight duration to Europe is 2.5-5 hours, and 5-7 hours to the United States and Canada. Domestic air services run from Reykjavík Airport, next to the city center, with regular flights to Akureyri, Isafjordur, Egilsstadir, and the Vestmannaeyjar Islands. Reykjavik airport also services flights to Greenland and the Faroe Islands.

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Reykjavík events all through the year

Winter

Lights

Festival

jan feb mar apr may jun jul aug sep oct nov dec

Design

March

RIFF –

Reykjavik Film

Festival

Reykjavík

Arts Festival

Cultural

Night Secret

Solstice

Festival

Children‘s

Cultural

Festival

Sonar

Food

and Fun

Iceland

Airwaves

Peace Tower

Illumination

Christmas in

Reykjavik

Gay

Pride

ATP




Incentive trips to Reykjavík during wintertime offer many choices of activities

Modern and up to date Amazing and up to date venues

Meeting in the middle

Organizing meetings and conferences is easy in Iceland. Cutting-edge technology, world class accommodation, gourmet restaurants and efficient means of transport make this an ideal meeting place

Reykjavík is perfectly situated midway between USA and Europe with only 3 hours flight from Europe and 5 hours flight from USA.

Reykjavík offers state of the art facilities with the ability to host large conferences and meetings.

In Reykjavík there are 35 hotels with 4.000 rooms. If the growth in tourism continues at its current pace Reykjavík needs approximately one large (200-400 room) hotel per year until 2030.

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BEST CITY CONVENTION BUREAU Meet in Reykjavík awarded best city convention bureau

BEST WINTER CITY Selected as one of the ten best cities for a winter vacation

BEST CHRISTMAS DESTINATION Selected as one of the ten best places to spend Christmas

BEST IN PHOTOS Voted one of 50 best places for travel photography

TOP NEW YEAR’S DESTINATION Voted the world’s most over the top New Year’s destination

BEST CONFERENCE VENUE Harpa awarded best conference venue in Northern Europe


Economic situation • Iceland’s economy is currently in a

growth phase

• GDP growth was 4% last year

• Actions to ease capital controls have reduced the government debt levels significantly

• Unemployment in jan 2016 is 2,8%

• Tourism represents 6.6% of GDP in Iceland and contributes to 19% of the export income.

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Íslandshótel

Íslandshótel brands; Fosshótel – operates 12 hotels around Iceland as well as in Reykjavík Hótel Reykjavík Centrum – a 4 star 89 room hotel located in central Reykjavík. Hótel reykjadalur – a 57 room summer hotel in northeast Iceland Grand hotel Reykjavík – a 4 star largest conference and meeting hotel in Iceland with 312 rooms. Best western hotel Reykjavík – a 3 star 79 room hotel down town Reykjavík.

Keahotels brands; Apótek Hotel Reykjavík – 4 star 45 room hotel located in central Reykjavík Hótel Borg – 4 star 99 room hotel located in central Reykjavík Reykjavík lights – 3 star 105 room concept design hotel in Reykjavík Skuggi hotel – 3 star 100 room hotel in central Reykjavík Storm Hotel – 3 star 93 room hotel in central Reykjavík Hótel KEA –4 star 104 room hotel in Akureyri, north of Iceland Hótel Norðurland – 3 star 41 room hotel in Akureyri, north of Iceland Hótel Gígur – 2 star 37 room hotel in the north of Iceland

Keahotels

Center Hotels operate six hotel in the center of Reykjavík. Plaza – 3 star 200 room hotel Þingholt – 4 star 52 room hotel Skjaldbreið – 4 star 33 room hotel Klöpp –3 star 46 room hotel Arnarhvoll – 3 star 104 room hotel Miðgarður – 4 star 43 room hotel

CenterHotel

Icelandair operates eight hotels in different parts of Iceland Reykjavik Natura – 4 star 220 room hotel in Reykjavík Reykjavik Marina – 4 star 147 room hotel in REykjavík Akureyri – 3 star 99 room hotel in Akureyri Hérað – 3 star 60 room hotel in East of Iceland Klaustur – 3 star 57 room hotel in South of Iceland Flúðir – 3 star 32 double room hotel in South of Iceland Hamar – 3 star 44 room hotel hour outside Reykjavík Vík – 3 star 36 room hotel in South of Iceland

Icelandair

There are mainly four hotel chains in Iceland, operating several brands

Growing appetite for international brands

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610 315

160 515

667 350

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4.000

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6.000

7.000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

350 million USD projected in hotel investments

4.000 hotel rooms in Reykjavik in the beginning of 2016

Current known plans for 2.000 new rooms until the year 2020

Hotel room projection

Source: Iceland tourist board and the City of Reykjavik

Blue column: hotel rooms, Orange column: new rooms per year


Reykjavik is quickly gaining a reputation as a Startup City, an incubator for burgeoning and globally-facing entrepreneurial ventures. Reykjavik is a world leader in geothermal and ocean related industries. Other industry clusters in the city are the biotech, medical equipment, tourism, IT and the creative industries. In all of these industries there is a bourgeoning startup community.

Reykjavík key industries


Icelandic ocean cluster The ocean cluster has a 26% direct

and indirect contribution to Iceland’s GDP. Seafood exports

represent around 40% of Iceland’s total product exports.

The ocean cluster in Iceland has achieved world class yields in

seafood processing.

Tourism cluster Iceland has unique landscapes and

sites which draw tourists to the country. Lonely Planet has named

Iceland and Reykjavík as its top destinations for 2012 and National

Geographic has named Iceland’s Blue Legoon Spa as one of the

wonders of the world.


IT cluster The Icelandic IT cluster has a turnover of 450 million USD and around 2.100 employees and growing. The key markets for Icelandic IT are

UK, Scandinavia and North America. The current key sectors are gaming, web hosting,

data storage and seafood related services.

Geothermal cluster Iceland is uniquely situated in terms of access

to a quality natural resource and has developed a position as a strong player in the global

geothermal market.

Creative cluster The creative cluster consists of various

enterprises, entrepreneurs and institutions in architecture, design,

literature, arts, music, fashion, and film. The creative industries in Iceland have flourished and Reykjavík has become a

melting pot of exciting new creative enterprises, with individuals seeking to

expand their businesses overseas.

Health cluster Iceland has developed specialized

knowledge in several fields of health throughout the past few years. This has happened through the combination of

well-educated workforce with an international outlook, both in Europe and the US. Iceland’s health dluster is

strongest in the fields of pharmaceuticals and medical equipment

where it has world class companies.

Reykjavík startup scene With a well educated and highly skilled workforce, affordable green energy, and

tremendous investment and business accelerator opportunities, Reykjavík is

quickly gaining a reputation as a startup city, and incubator for burgeoning and globally facing

entrepreneurial ventures.


The current hotel pipeline in Reykjavík is shown in the table and map with a total of 2.141 rooms planned. Occupancy in the downtown area is much better that in the adjacent post codes. The city of Reykjavik has however declared that it will not support new hotel projects in the old city center. This does not include projects which have already been introduced to city officials.

Project pipeline: Rooms: 1. Marriott Edition Reykjavik 250 2. Hlíðarendi 360 3. Icelandair Parliament 160 4. Centerhotels Midgard 100 5. Reykjavik Canopy 115 6. Grand hotel 100 7. Íslandshótel – Lækjargata 100 8. Icelandair Hafnarstræti 70 9. Laugavegur 34-36 60 10. Vegamótastígur 7-9 40 11. Ármúli 5 40 12. Oddsson - hostel N/A 13. Tryggvagata 107 14. Grensásvegur 75 15. Suðurlandsbraut 18 120 16. Grensásvegur 1 350 17. Hjálpræðisherinn 30 18. Brautarholt 10-14 40 19. Hotel Alda 24 Total: 2.141

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250 rooms First five star hotel in Reykjavik Great addition to the Harpa Concert Hall and Conference Center Expected opening in 2018 Developer: Carpenter and Company

Marriot Edition Reykjavík

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160 rooms Area plan approved hotel Project in development Opens out to three major downtown squares Developer: Lindarvatn

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Icelandair Hotel Parliament



150 rooms Located at Hlemmur 50 rooms to open in 2015 100 new rooms to open in 2016 Developer: Mannverk

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Centerhotels Midgard



115 rooms 25 apartments New city square which opens to Laugavegur shopping street Opening in 2016 Developer: Þingvangur

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Hilton Canopy



75 rooms 4 stars New city square for the countries most popular restaurant: Bæjarins Bestu hotdogs Hilton Curio brand The city of Reykjavik will be renewing Hafnarstræti street this year Developer: Sudurhus

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Hafnarstræti 17-19



Overcrowding risks diminishing local character Hotel quotas might be extended The following new options for tourism in development Some could be available for sale later this year

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New options



Former fish factory (2.000 sq.m.) in a key corner of the up and coming Grandi harbor district Walking distance to city center Current tenants include: Saga museum , Aurora borealis museum and restaurant „Matur og Drykkur“ Old building heritage protected but possibilities of some additional buildings on the plot which is 3.569 sq.m.

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Alliance builing



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Alliance builing



Former dairy farm on the outskirts of Reykjavik Currently used as a golf center and artist workshops 6.000 sq.m. Salmon river a few steps from the building Golf course

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Korpúlfsstaðir



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Lágmúli 2



Intersection of Sudurlandsbraut and Kringlumýrarbraut Close to Grand hotel and Hilton Nordica Possibilites for a large hotel on the plot

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Possibilities of a spa hotel connected to the Geothermal beach Early stage idea

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Nauthólsvík Geothermal Beach



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Reykjavik Transit Terminal


A new transit terminal is in development at the site of BSÍ bus terminal The new terminal will be a key station for local public transport, regional buses and airport shuttles A competition for an area plan for the terminal is planned for 2016 The new area plan will most likely create good plots for hotel operations


Reykjavik Hotel Prospectus

hotel prospectusinvestinreykjavik.com/wp-content/uploads/2016/02/... · harpa awarded best...

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