Swedish hotel landlord Pandox enjoyed a stable first quarter to 2025, with total revenues up 1%, but down 1% like for like, as renovations affected the portfolio.
Performance through the first three months of 2025 mapped the growth experienced in the same period of 2024. Hotels in Norway performed strongly, up 13% in the regions while in Oslo, room rates were up 16% with occupancy 11% ahead.
A growing portfolio
Pandox finished the quarter with 162 hotels, and 35,941 rooms. Of that total, 139 hotels are leased, and Pandox operates 23 directly. The leased properties operate across a wide range of international brands.
During 2024, Pandox bought three hotels in London, all under Residence Inn branding, and a DoubleTree hotel in Edinburgh. The company acquired two hotels during early 2025, in Germany and Sweden. The Pullman hotel in Cologne was a EUR66 million purchase, delivering an initial 6.5% yield and with a short term fixed lease in place. While a well-positioned hotel, Pandox executives consider the property has potential for improvement in the medium term.
Closer to home, Pandox also acquired the Elite Hotel Frost in Kiruna, Sweden’s northernmost city that was famously built to support an ore mine. The newly built city centre property has a revenue-based lease, with the SEK347 million investment delivering a stabilised yield of 7%.
Pandox continues to invest in upgrading its portfolio. During early 2025, the Leonardo Royal in Baden-Baden enjoyed a renovation of its rooms and public areas, while rooms at the Leonardo Royal in Frankfurt were also updated. A new spa and heat pumps were installed at the Vildmarkshotellet in Kolmarden, Sweden. And at the Hotel Brussels, which Pandox operates itself, the 421 room property has had five new rooms created, with a mini spa area added on the building’s top floor.
Across Europe, hotel demand continues to grow, but on a moderating scale. Speaking at the Pandox Q1 presentation, STR director Alex Robinson said first quarter 2025 demand was up just 3% year on year. Globally, average occupancies are edging up, with South America and North Africa leading with a 5% improvement year on year.
With higher demand has come stronger room rates. And, in select markets, it has led to more nights with 90% plus, or even 95% plus occupancy. STR notes Edinburgh, Dublin, London and Barcelona as city destinations where these “compression nights” have been to the fore, allowing hoteliers to push rates higher.
Luxury enjoys the upswing
Luxury segment properties are performing more strongly in the current market. The situation has flipped round from 2023, when economy properties were performing more strongly. Today, that segment of the market is struggling with softer demand, just as luxury hotels are enjoying stronger occupancy, and pushing up rates as a result.
Overall, Pandox executives reckon the hotel market remains resilient, despite concerns such as US government tariffs, and changing consumer sentiment. With a stable level of business on the books, there is even the possibility that shifts in international travel are a net positive.
