In a bold bid to broaden its customer base and take further market share from its competitors, Scandic Hotels is launching a new hotel chain and brand alongside its current operations. The new chain, HTL, will cater to a new generation of travellers.
Increased digitalization, continued urbanization, new mobile meeting cultures and a greater demand for transparency and speed is creating a new customer group with somewhat different priorities from a traditional hotel guest and this is a group Scandic’s new chain is targeting. The new brand will be separate from Scandic and operated as a sister company.
Scandic says the new concept is unique for the Nordic region and calls it “City Compact Hotel” with efficient use of space and prime city center locations. Prices will be affordable but without compromising quality or the customer experience.
"In the past few years, Scandic has invested several billion kronor in its hotel portfolio, and added 40 hotels since EQT's acquisition. Here we see a good opportunity for further growth in a partially new segment. There are similar initiatives emerging internationally, but with HTL we are consolidating our position in the Nordic market. We are uniquely positioned to achieve the right contract models and we have the resources to create a strong concept and brand that complements Scandic”, says Frank Fiskers, CEO of Scandic.
Frank Fiskers returned to Scandic as CEO on October 15 as Anders Ehrling left the company. Frank Fiskers was the CEO of Scandic between 2007 and 2010. He will also assume the role of Chairman of the Board for the new hotel chain HTL.
The new hotels will be in city center locations in the Nordic capitals and other major regional urban centers and a focus on efficient use of space means the hotels will have no meeting rooms or restaurants and other communal areas will be kept at a minimum. Other important parts of the concept are modern design, digitization and state-of-the-art technology, yielding a high quality customer experience.
“By streamlining the concept, we can deliver higher quality where the customer appreciates it the most. This is not a discount chain although price levels will be typically lower than at our current Scandic hotels in similar locations”, continues Frank Fiskers.
The target for HTL is to have 20 hotels within five years and the first one is set to open in May 2014 in Stockholm with 275 rooms in a converted office building. The Nordic capitals still need more hotel capacity to continue attracting major international conferences and the HTL properties will mostly be new construction or building conversions, particularly of office buildings. A second site is already secured in central Stockholm. In all, Scandic is looking to invest SEK 500 million in the new hotel chain.
“Scandic will surely lose some business to HTL but we are very confident that most of HTL’s customers will come from other hotel chains. Although they operate as separate companies there are also some scope for co-operation and synergies between the two chains,” says Frank Fiskers.
In parallel with starting HTL, Scandic is also embarking on a major investment program to upgrade and renovate Scandic’s roadside hotels and give them a new design profile. Together with Scandic’s real estate partner Pandox, SEK 1.6 billion will be spent on improving the roadside hotels.
Scandic is the largest hotel chain in the Nordic region with approximately 160 hotels in eight countries and 30,000 hotel rooms. Scandic hotels have been pioneers in areas like creating a sustainable business, accessibility for disabled and have won numerous awards for its achievements. Scandic was acquired by EQT V in 2007 from Hilton.