Editor’s note: Stay tuned to Hotel News Now for exclusive video interviews with both Scandic Hotels Group President and CEO Frank Fiskers and Nordic Choice Hotels CEO Torgeir Silseth.
COPENHAGEN, Denmark—If analysts are asked to name two standout hotel industry companies in the Nordics over the last 20 years, they most likely will point to Nordic Choice Hotels and Scandic Hotels Group.
Their respective CEOs, Torgeir Silseth and Frank Fiskers, shared the stage at the recent Nordic Hotel Consulting Conference to talk about their firms’ pasts, presents and futures and the wider health of the region’s hotel industry.
Both agreed they are most proud of the culture they helped install.
“What pleases me the most is the culture of Scandic, to be able to take on all these hotels and extend market share,” Fiskers said. “Labor does come with issues, but also with huge opportunities.”
Silseth said he’s gotten to know more of Nordic Choice’s employees.
“Last October, I traveled to 11 cities,” he said. “They were not normal meetings, but instead with housekeepers, chefs. At the end of the day, and at the beginning of the days, (this industry) is people.”
Both companies have seen changes. Fiskers spoke of his company going public 18 months ago after more than 10 years in private hands, which required him to change some habits.
“Previously, I had more exposure in public,” he said. “I was more open.”
Fiskers is retiring at the end of July. He recounted positive memories of the company being owned by Hilton.
“When we were owned by Hilton, I had to take the Scandic signs down, and then I had to do that again, but there was not confusion as we have not added brands,” Fiskers said. “Twenty years ago, Scandic was only on motorways, but we had incredibly supportive owners (in Hilton) that sold a good company when their time came to exit.”
Silseth has seen Nordic Choice go the other way.
“We were public for three to four years,” he said, referring to his firm’s owner, Strawberry’s Petter Stordalen. “You have to have a different perspective.”
“We’re the complete opposite (to Scandic), with independents and resorts, too,” Silseth said of his firm, which holds the master franchise in the Nordics for Choice Hotels International and 190 assets, only two of which are outside the Nordics.
Fiskers said both Nordic Choice and Scandic have thrived with their different approaches.
“Two strategies in a limited geography work very well, and we are both opening new hotels,” he said. “We are unique in our different ways.”
Threats to the north
Fiskers then turned his attention to something that has long annoyed him—Airbnb and others who do not, in his opinion, play by the rules.
“(Airbnb) have quite a large inventory in the Nordics, but you cannot go into a corner and cry,” he said. “There are other components we can offer and be better, but (Airbnb) is not transparent.”
Silseth said digitization has given online travel agencies and other alternative accommodations companies an advantage.
“It is the same for OTAs and other alternative providers,” Silseth said. “It is the digital tools that makes this all the more relevant. After all, putting a passenger in the back seat and charging them is not new. We have to give the customer the total picture. We need to provide that and please guests more.”
Fiskers agreed, but added the tide has begun to shift.
“The power of digitalization provides opportunities as well as challenges,” Fiskers said. “We loaded our websites with far too much stuff, but (hoteliers) have woken up. We’re starting now, where we did not dare before, to widening the value choice of going direct. That is a huge change.
“OTAs had huge traction over the last 10 years, but I see movement.”
As for the possibility of future mergers-and-acquisitions activity, Nordic Choice is off the table, Silseth said, while Stordalen is at the helm. Fiskers said, however, that deals that make sense for the right price have a place at the negotiating table.
Silseth said a number of factors affect transactions.
“Finding suitable investors is the biggest challenge,” Silseth said, who added that exchange rate drops worry him, even more than terrorism, despite his comment coming a few days after the Manchester bombing and a few days before the London attack.
“You have to watch your back,” Silseth said. “If you have 20-year leases, there will be ups and downs during that time. Copenhagen will not continue its excellent performance as is forever. Helsinki a few years ago was down the drain.
“My experience is that when somewhere goes down, it goes down further, harder.”
Fiskers said skepticism about the industry cycle is warranted.
“It is not about having a single trick any longer, and you have to be careful all the time,” he said. “But right now, it is hard not to keep the pessimism up.”