CBRE Nordics Hotel Market Snapshot January 2024

January 31, 2024 3 Minute Read

Looking for a PDF of this content?

CBRE Nordics Hotel Market Snapshot January 2024 


2023 was a profitable year for hotel operators in the Nordic region, but a slow year for hotel property transactions as there was a wide disconnect between buyer and seller pricing expectations and property values were under pressure from tighter financial conditions. 2024 promises a cooling in hotel guest demand as disposable incomes fall due to cost increases, but a more active hotel investment market following a more stable pricing environment. We are cautiously optimistic for the hotel investment to recover in 2024 through the continued easing of inflation and the expected rate cuts by the central banks. 


While hotel fundamentals are strong around the region, other property sectors face headwinds. Office investors are faced with uncertainty over the office of the future, and occupiers who demand higher standards, more flexible terms, and lower rents. Some older offices and properties in less swanky office locations may become obsolete. For some, the investment case may be to convert from office to another use.

Hotels as an investment class has gained some attention recently, partly because of solid fundamentals and partly because of the operating nature of the assets. In the Nordics, because of the low-risk exposure to the operating side through variable leases, many investors see the attraction, but are unable to enter the market because of a lack of experience, understanding and price expectations on the frothy side. 

Converting an ageing office to a hotel may seem like a reasonable proposal. We find, however, that the opportunities for doing so may not simultaneously check the criteria for success. While there are some hotspots around the region where office vacancies are high and rents have fallen, these are typically not in areas sought after as overnight destinations. Also, most city governments fail to adopt application processing on a timeline that enables quick turnarounds. In other words, conversions may be an option but are not the easiest fix in all situations.