Scandic Hotels Group AB
STO:SHOT
US |
Fubotv Inc
NYSE:FUBO
|
Media
|
|
US |
Bank of America Corp
NYSE:BAC
|
Banking
|
|
US |
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
|
US |
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
|
CN |
NIO Inc
NYSE:NIO
|
Automobiles
|
|
US |
Fluor Corp
NYSE:FLR
|
Construction
|
|
US |
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
|
US |
TopBuild Corp
NYSE:BLD
|
Consumer products
|
|
US |
Abbott Laboratories
NYSE:ABT
|
Health Care
|
|
US |
Chevron Corp
NYSE:CVX
|
Energy
|
|
US |
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
|
US |
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
|
US |
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
|
US |
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
|
US |
PayPal Holdings Inc
NASDAQ:PYPL
|
Technology
|
|
US |
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
36.88
75.9
|
Price Target |
|
We'll email you a reminder when the closing price reaches SEK.
Choose the stock you wish to monitor with a price alert.
Fubotv Inc
NYSE:FUBO
|
US | |
Bank of America Corp
NYSE:BAC
|
US | |
Palantir Technologies Inc
NYSE:PLTR
|
US | |
Uber Technologies Inc
NYSE:UBER
|
US | |
NIO Inc
NYSE:NIO
|
CN | |
Fluor Corp
NYSE:FLR
|
US | |
Jacobs Engineering Group Inc
NYSE:J
|
US | |
TopBuild Corp
NYSE:BLD
|
US | |
Abbott Laboratories
NYSE:ABT
|
US | |
Chevron Corp
NYSE:CVX
|
US | |
Occidental Petroleum Corp
NYSE:OXY
|
US | |
Matrix Service Co
NASDAQ:MTRX
|
US | |
Automatic Data Processing Inc
NASDAQ:ADP
|
US | |
Qualcomm Inc
NASDAQ:QCOM
|
US | |
PayPal Holdings Inc
NASDAQ:PYPL
|
US | |
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Hello, and welcome to the Scandic Hotels Group Audiocast Teleconference Q3 2021. Today, I'm pleased to present Jens Mathiesen, President and CEO; and Jan Johansson, CFO. [Operator Instructions] Please note that this call is being recorded. Speakers, please begin your meeting.
Thank you so much, operator, and good morning, everyone. This is Jens speaking. And thank you for joining this presentation of Scandic's third quarter report. As I'm sure you all probably recall, we did a pre-announcement in October 15, where we disclosed adjusted EBITDA and also commented on the cash flow development for the quarter as the outcome was significantly ahead of the market expectations.Our adjusted EBITDA came in at SEK 709 million for the third quarter, while cash flow exceeded SEK 0.5 billion. So results did include stay date and some temporary effects from our quarantine business in Norway. But even when we adjust for these items, the underlying margin was around 10%, and all segments posted positive results.We are especially pleased with the strong development we have seen in Norway, 55% for the full quarter. We saw very strong demand for domestic leisure, especially in July. And it was encouraging that our occupancy stayed above 50% every single week during the quarter, as, of course, the demand from corporate travel and meetings did offset reduced leisure in the weekdays as the vacation period came to an end from approximately mid-August.There has been a lot of pent-up demand for meetings among corporate customers after a very long period of extensive restrictions. Most restrictions have now been lifted on our markets, and that has boosted the demand. We are seeing increased booking activity all over, especially for meetings. At present, our meeting business is around 70% of the level we saw during the 2019, i.e. before the pandemic, and we expect that to improve even further into November.We have increased the staffing since the first half of '21 on the back of the rapid improvement in occupancy. We have, however, managed to improve our efficiency lately as demand has picked up, and we continued and remained focused in our ambition to permanently strengthen our profitability level.If you please turn to Page 3. We are, of course, very happy to show a clear turnaround in earnings in the third quarter following 1.5 years with very weak development. Our reported adjusted EBITDA reached its highest level since the third quarter in 2019. Earnings did include positive temporary effects such as I just mentioned before, but we are very pleased with the underlying earnings of close to SEK 400 million when adjusting for those items. Jan will, of course, comment a lot more on this in a few minutes.If you please turn to Page 4, where you can -- here see our market -- the general market development on a monthly basis in the Nordics. There was a very rapid increase in July in all markets driven by domestic leisure. Market September on the back of increased corporate travel and meeting activity, that managed to more or less fully offset the gradual decline in lesser travelers as the summer vacation period came to an end in the latter part of Q3. You can also see that the trend in Finland was a bit weaker than the other markets, as it has been more affected by restrictions and especially, I would say, in Helsinki from the -- than versus the other markets. A large part of the year-on-year improvement in the third quarter comes from higher occupancy in the capital cities from the historically low levels that we saw last year.On Page 5, we show market RevPAR development index to the corresponding month in 2019. So for instance September '21 is indexed versus September '19, et cetera. The Norwegian market has and -- was slightly above the 2019 levels in July and around 85% of [ 29 ] levels in August and September. The other Nordic markets were at between 50% and 70% of '19 levels in August and September. The most positive development was seen in Denmark, that was the first Nordic market to lift restrictions, while the trend was a bit weaker in Finland.If you please turn to Page 6, where you can see Scandic's recent 7 days rolling occupancy. As of last Monday, we were at an occupancy level of around 60% for the group, and that trend has been positive in all markets in the past month. The most positive development has been in Finland, which you see in the blue line, in the past couple of weeks from relatively low levels following the recent easing of restrictions here. We have also seen a solid improvement in Norway, the red line, where we are at a level of around 67% at present. So all in all, we will enter November with a slight positive trend, which is of course very encouraging.Please turn to Page 7. This is a very good slide to see how corporate demand has been growing recently. This graph shows Scandic's occupancy rate from weekday since late August until the end of last week. The Saturdays have, and if you look at all Saturdays, as you can see, has been the busiest day of the week for us recently, but there has been a robust improvement on Mondays to Thursdays in the past 2 months, which is a clear sign of increased corporate activity. At present, we are around 70% on Tuesdays and Wednesdays, which is more or less the same levels as on the Saturdays. So we are probably gradually moving towards a more normal pattern where our occupancy peaks on Tuesdays and Wednesdays rather than during the weekends.Please turn to Page 8. We have now started to increase the manning, again, since the first half of this year on the back of the growing demand. Staffing is currently at around 70% of the level we saw in '19, and this is done with strict focus on cost efficiency and has a clear ambition to permanently strengthen our profitability level. We have increased our workforce efficiency lately. In the graph, you can see working hours per sold room on a 3-month rolling. And we are now slightly ahead of '19 levels. As we have said before, we are aiming at an adjusted EBITDA margin above our target of 11%, even at demand levels that are below the '19 levels. Handling staffing in a smart way is, of course, crucial for us in order to reach that target.Please turn to Page 9. This is our pipeline at present that now amounts to around 3,700 rooms, which is a little less than 7% of our total portfolio. We opened 4 hotels with lease agreements during '21 and we will open 1 more hotel this year, the Hamburger Bors in Turku, in Finland, which will open next week. With that, we will enter next year with more -- with approximately some 1,200 rooms more than we did in operations versus the beginning of this year, '21. We have a solid pipeline for '22, with 9 hotel openings with a total of 2,700 rooms and also 3 planned exits of 360 rooms. So our net portfolio should grow by another 2,300 rooms in the coming year.With that, I hand it over to Jan for some comments on our financial report.
Thank you, Jens. I will go through -- or attach some comments, I should say, to the underlying EBITDA development, also by segment because I think it's a little bit complicated now with one-offs and so on. I will also go through cash flow that is very transparent and quite easy to explain where we are right now and financial net. Also come back a little bit to the sensitivity analysis, which we have worked with during the pandemic. And of course, some comments around IFRS 16.Taking a step back here, I would say in broad terms, we are a little bit more than halfway through to restore Scandic to the pre-pandemic profitability levels. Of course, SEK 709 million is on a first glance, a very, very strong result. There are some one-offs here, which we should correct for so we can arrive on the underlying EBITDA. Our assessment is that, that is around SEK 308 million, that corresponds to a margin of around 10%. And of course, in the normal Q3, if you compare with the pre-pandemic level, that should be a margin maybe between 15% and 20%. And that's the reason why I think we can label business a little bit more than halfway through.If we turn on to next page. Here on the page, we have a little bit of a delay here. Here it comes, yes. Thank you, thank you. You can see the segment development here. And -- also last year, we had a lot of one-offs here, it's SEK 370 million in total in on most last year, and that is attributable to stay date in the countries. And if we start with Sweden then and see the development there from SEK 77 million to SEK 142 million, the underlying improvement there is around SEK 170 million. And I think what we lack in Sweden right now to take the last step into the old levels is, of course, a much faster demand in the big city, especially Stockholm here. We can see that development in regional cities is quite strong, actually. But there is a way to go in Stockholm.Norway, we would say that the underlying development is around SEK 230 million, if you correct for one-offs this year and last year. I would say that Norway is the country where we have come closest to the pre-pandemic level, both in terms of pricing and in occupancy. We also see a strong demand, especially in the meeting segment in Norway. One other factor, which explains the relatively strong development in Norway is that they have been, I would say, internally in Scandic, the leader when it comes to productivity development. So we are actually already now on level than we have pre-pandemic there, which is, of course, very helpful when it comes to driving margins long term.Finland, the underlying development there is that we have an EBITDA increase of SEK 120 million, if we correct for one-offs last year and this year. Finland is lagging behind the other market in terms of occupancy. We have a traveling speed of around 50% there right now, which is below the other countries. And one of the main explanations, there is, of course, that they have been -- had restriction lifted later than the other countries. However, we see a positive development right now. Here, of course, Helsinki is an issue right now where there is quite a big imbalance between supply and demand. Of course, we expect that to gradually improve here as a consequence of lifting restrictions.Other Europe, the underlying development there is SEK 150 million in improvement if we correct for one-offs there. Also here, we see a good development in the big cities right now, Frankfurt, Hamburg, Berlin and Copenhagen. And there has been quite a rapid improvement in those big cities. But as you probably understand, we need to have high occupancy levels in these cities in order to generate EBITDA.So that's -- I think with that, we go over to the cash flow. That is, as I've said earlier, quite easy to understand here. If we adjust for the one-offs here, we expect that we have an underlying cash flow of around -- a little bit below SEK 300 million. I think that is reasonable, given the fact that we have an occupancy of 55% during the quarter. This implies actually that the breakeven level for cash flow is a little bit below 50%. However, we have a little bit of support for rent subsidies this year, which will go away next year. So I think in the longer term, I think the 50% is around a good guidance of where our cash flow level is. I will come back to the interest net a little bit later on. This is -- the normalized interest level in the quarter would be around SEK 60 million to SEK 65 million, but there are some timing issues here. Very little working capital changes here during the quarter here. But you can see small numbers. Investments, we will, and you have seen that we have basically only done or sort the pipeline of new hotels during the pandemic year, which we are contractually committed to. We have a run rate of investment expenditures of around SEK 150 million a quarter. The current plan we are doing, we will probably stick to that number during the next foreseeable future, maybe 5 or 6 quarters ahead. We have, as Jan said, a significant pipeline from next year. This means that we will be very restrictive on investments in existing operations and steer the cash to the pipeline very much here.I think the good thing here for us is that we entered into the pandemic with a portfolio which was in very good shape with a few exceptions, which has meant that we actually can do this prioritization right now that we are holding back investments in existing operations a little bit. And we believe that we can do that without jeopardizing customer experience and so on, as we need to restore Scandic to old debt levels.So I think that is all with the cash flow, and we can go to the next page there, which is a little bit of an explanation of the financial net. It is a bit complicated now because we have the IFRS 16 effects. I mean the interest expense, there is a part of the rent with this explanation. And this is, of course, noncash. It materializes as cash flow rent payment, which is -- if we exclude that, we arrive on a financial net of SEK 100 million in the quarter, but 1/3 of that is the payment in kind interest on the convertible bond, which will be settled when the convertible bond expires in 3 years' time from now. So the underlying financial cost is around SEK 55 million to SEK 60 million a quarter. And in this particular quarter, we have paid half of that. And that will vary, of course, over time here. But around SEK 60 million -- SEK 55 million to SEK 60 million a quarter, you can come on there.And then next page is just the sensitivity analysis here. I mean already in the recovery, you -- there is an extremely good profit conversion that you don't pay variable rent. We are closing in, in our rentals right now and -- which means that we need to start to pay variable rent that will pressure down the conversion down a little bit, so we will probably be closer to SEK 10 million in the when you have 1 percentage change in occupancy. So when the occupancy now start to increase a little bit, Jens will talk a little bit about the outlook a little bit later on. We should be a little bit more cautious with the profit conversion as we enter into the interval of paying variable rents.However, we think that this guidance, which we have done earlier, is still very accurate here. So I mean, that's probably one of the few offsets with the pandemic that we have really learned, how their business model works here and where the occupancy levels are or breakeven level's are.Finally, then on IFRS, which we have on next page here. It -- the big effect is, of course, the leasehold accounting. We have a significant negative effect this year of SEK 560 million, that is temporarily high. Due to that we have managed down to get lease discounts. We started with that in Q4 2020. There will be at least discounts during quarter 4 this year, but they will start to phase out as of second half of '22. And that is, of course, the main difference here why we have such a big difference between non-IFRS and IFRS. And this will converge down to 0, and it will converge quite fast during '22 due to that base case rent rebates go away. There will still be an effect due to that we prolonged some agreements here as part of that deal to get rent rebates here. With the assumption that the portfolio stays constant, they should come and turn positive this difference in 2027. However, that's a theoretical assumption.In the convertible bonds, just to remind you on the IFRS accounting there, that the effect with the split in the balance sheet is 78% debt and 22% equity. And of course, now as we have a positive net profit in the quarter, we calculated full dilution. However, that will be very digital. So if EPS comes negative, then it will go away and vice versa.So that is that. And with those comments, I will leave the word back to Jens.
Thank you, Jan. As you hear from Jan as well, we have a quite positive view on the market development here near term. Our business has improved during October, and we expect occupancy to be around 58% for the full month. We are also entering November with occupancy rate of closer to 60%, and we have seen increased bookings. So we expect occupancy to reach at least 60% in November. So a slight positive curve on the occupancy for the near term.So we expect in the near term, the key drivers to be continued improvement for corporate and meetings, where we have had quite a positive pickup. Better demand in Finland, which we have seen after lifting some of the restrictions, so the last weeks have been more positive. And also better demand in the capital cities, now when we see more increased into Nordic business versus just a few months ago. So all in all, a positive view on the coming period. With that, I hand it back to the operator.
[Operator Instructions] Our first question comes from the line of Jamie Rollo from Morgan Stanley.
The first question is, it might be a bit early, but could you give us some flavor on those corporate negotiations and what they're sort of telling you? You've given us some numbers for group bookings running at sort of 70%, but how about pricing? And what are your sort of transient individual business travel segment doing relative to pre-COVID levels?Secondly, hopefully given us again the October and maybe November occupancy levels, could you remind us what the actual month of those 2 months were in 2019? We've got the quarter, but you've given us the individual months, just so we can work out the decline. And also any sort of flavor on pricing overall for the group in those 2 months? Is that also improving along with occupancy?And then just one more, on the rent numbers, I think you've given us the discount you've negotiated for next year. But if we put that to one side, is it fair for us to assume if revenues get back to pre-COVID levels, then your total rent bill is broadly back there with a similar variable and fixed rent split?
I think we can -- let's combine it a bit, Jan and me here. I think for the first question, when it comes to pricing, I think a very positive thing versus what we saw after the financial downturn is that we see most -- let's say, Norway right now where we are very close to '19 levels, almost equal to the '19 levels. That also comes due to pricing.When it comes to some of the other markets where we are -- when we see we are hitting up around 90% in certain areas, we also see that prices follow. So prices do follow right now. So we don't have a price issue in general. Also, when it comes to the corporate contracting to your very, I would say, relevant question, there's kind of a -- that's happening a lot on prices all over -- not only our industry, but all over the -- all industries right now with increased prices for food and for goods and for building workers, et cetera.But also when it comes to our industry, there's an expectation also that prices also will follow a bit upwards once all of these other increases is hitting also our industry. So we have quite -- it's very early days when it comes to corporate contracting for next year. But in the beginning of this process so far, we don't see pressure on the prices. So we feel that we have a good way of continuing to grow prices also in the time to come. And then you have some questions on maybe some of the occupancies. I don't know Jan if you want to...
We had the rents, I think here also, which we feel, start in that angle, I mean, obviously, we have negotiated a lot of rent rebates here. Those will -- there is still, I would say, maybe some support of the same level in Q4 as we got in Q3, probably around, maybe SEK 80 million to SEK 100 million a quarter there. That will -- there will be some rent rebates also next year, but I would probably say that not over SEK 70 million to SEK 80 million in total or something like that for the full year and predominantly the first half. So they will be much more insignificant, but still helps, I would say that.When -- I don't have the exact numbers on the occupancy, but it was not big variations. I mean, normally here, you have -- if you go back to the pre-pandemic level, you would be unsatisfied if you were not above 70% in the month of, I would say, from July up until November. So of course -- and as we mentioned here, we are halfway through in that aspect. I think the same when it comes to pricing. I mean, in some markets, we are 10% below. But in order to take that, the last 10%, we need to have better occupancy in the big cities because then we will have this positive mix effect also. Because some of the hotels where we generate higher rates, I mean, they are quite big hotels, they are very nice hotels, but we need more customer in those destinations to achieve that those price levels.So I think if we go out a little bit more to the regions, region or cities or so, I would say in many areas, we are already at pre-pandemic level when it comes to pricing. So it's a little bit that we need the extra momentum in the big cities. And that's a combination of more core spread and also that you get more advanced in the big cities, or stuff like that, because we haven't seen that so far. As in Copenhagen and some of the other areas, they are still in ramp up, those cities to attract to, and that will, of course, support our business.
Can I ask the same question perhaps in another way. You've given us the monthly occupancy numbers in October and maybe November as well, around 60% for both months. And we know the third quarter was 55%. You're not giving us a monthly data for 2019, but we can sort of triangulate it. And also we know that the third quarter in 2019, your occupancy was 76%. And this quarter, you were 55%. Q4 '19, the company was 62%. So there's quite a lot of seasonality actually. And now you're running at about 60%. So is it not correct to say that the reduction in occupancy is significantly less in October, November, so Q4 to date than it was over the summer. Is that not correct?
Yes, that's correct, Jamie. And what we are trying to get across is that we see a sequential improvement in our business. This will obviously be disrupted in December due to seasonal effect, but what we see is a sequential improvement.I think -- bearing in mind when you compare with 2019, that was an extremely strong autumn, especially in Finland, as there was so many events in that city during Q4. So it's a little bit unfair to compare with 2019. But what we see definitely sequential improvement in the business, and how that -- how strong that momentum is -- remains to be seen a little bit, I would say.
Maybe one thing which is a bit interesting. And for us, encouraging, of course, and this is that, out now, I would say, individual bookings have been extremely stable, a bit fairly stable from summer and up to now. So what we see is increasing is actually the group business, meaning a lot of meeting business, which is picking up.But we also -- when we look at the domestic traveling versus Nordic traveling and then again, the rest of the world, meaning also the rest of Europe traveling into the Nordics, then we see a higher increase. So what we have picked up lately is much more international business. Right now, we are more than double versus -- on a monthly basis versus July when it comes to the ex-Nordic business coming into the Nordics.And also when we look at the inter-Nordic traveling, that has increased quite a lot lately. So it's driven by more inter-Nordic and international or, let's say, European at least business and also more group and meeting business. That are the drivers right now and that's positive also for the major cities.
Okay. And sorry, just clarifying the rent point. So thank you for giving us the SEK 70 million to SEK 80 million expected rebates for next year. But if we put that to one side, there's no reason for us to assume that total rents will be any different on a fully recovered revenue base than they were pre-'19, where you still got a similar sort of variable percentages and similar fixed minimums.
Yes.
And the next question comes from the line of Adela Dashian from Handelsbanken.
Yes. I'm still on the business traveler questions. And my first one, if you could please provide us with some more insight on the increased booking activity that you're seeing here within that segment. What does the guest profile looks like? Are we talking about more domestic business travelers still? Or are you starting to see the first signs of a return of international guests? And then also, is it smaller meetings or even larger conferences? Just some more flavor on the guest profile for business travelers at the moment.
Yes, we do see -- thank you for that. And like mentioned a bit before, I can put some more flavor to it. I think we have seen, especially from September into now and even in the pickup for the coming period, we see larger and larger meeting bookings coming in.So in the beginning of September, it was smaller meetings popping in. Now we do see larger meetings, meaning that we see meetings of even above 100 people in a meeting, and that is a bit new that we are picking up larger and large meetings.We also see that to Jens' point, there's a lot of events coming in, which has quite a high interest. A lot of them is into next year, of course, but even already now, we do in certain markets see that there's a really huge demand of attending events: Concerts, musicals, those kinds of things. We do operate a hotel in Copenhagen with a big venue place for 2,000 people which is sold out every day. And that is fully sold out with 2,000 people every night for a musical right now. And we do see that fills up restaurant and bar and things like that.When you see artists coming into the region, booking their concerts for next year, it's selling out the concerts right away. So there's a lot of demand for that, and we expect that also to increase a lot, especially for next year. So I think a lot of events, et cetera, which will drive that, and large meetings and things, we will see an increasing trend in the coming period. But then, of course, Q1 will be a bit slower, especially in the beginning. And then we expect as of end of Q1 and into next year, that to, I wouldn't say, come back to the full, but a much higher level versus what we have seen in a long period. So there's quite a big demand for that.When you look at the traveling, I would say, especially lately and maybe -- I don't know if you -- the exact figures around us. But if we look at the international traveling and when I talk about international, I'll talk about everything outside the Nordics into the Nordics. Then we have seen almost -- or just more than doubled from July into now. So we see quite a huge increase, but from very low numbers, of course.When I look at the inter-Nordic traveling, that is increasing day by day. So we see also here quite a strong increase in the inter-Nordic traveling, which is also positive, because that is driving up occupancy levels in the -- especially in the capital cities, which we have been backing. So I think some of the drivers for increasing that in the capital cities is definitely also the inter-Nordic and some of the European traveling starting to pick up. So that is absolutely positive. We see quite a stable pattern for the domestic traveling right now.
Got it, okay. And then my next question, this might go back to the pricing questions. I'm sorry if I'm repeating myself. But obviously, this segment is vital for your recovery, at least in the near term or the immediate term. So I'm wondering if you've initiated any specific strategies or activities to capitalize on the pent-up demand and that could be price reductions or...
Occupancy. So I think what is good with our industry versus 10 years ago where we had a lot of fixed -- fixed agreements on prices with our big corporate clients, then that is not the case anymore. So we have less fixed corporate also prices. Meaning that they have a discount on the variable price. That means to the point that Jan raised earlier that once we get back to a normal level, we can also drive prices because it is not fixed agreements. And that is very important to drive rates in a faster way once occupancy levels is more into a normal level also in the capital cities.
Okay. And then finally, just on the guidance that you've released for November, where you're expecting occupancy to be at least 60%. Are you basing that off of the current booking trends? And then -- do you view that as a bit optimistic, given that it's even higher than the July occupancy rate of 58%? Or do you feel comfortable that it is attainable?
I think it's very -- we feel quite comfortable. I think when I say this, I got some estimates for October some 2.5 weeks ago, where they estimated from our revenue team and our analyst team that October would end around 58%, and we still say that. So when we say approximately -- or just over 60% in November, I feel pretty comfortable, unless of course, something which we don't know about will happen in the market. But we know right now, we think we will be at a minimum of 60% for November, and I feel comfortable about that.
And may I just comment quickly on the occupancy in 2019 on Jamie's question. So our occupancy in the fourth quarter of 2019 was 62.2%, and we were around 69%, both in October and November 2019. But I have to remind ourselves that this was a very, very strong quarter, especially in Finland.
Especially in Finland.
Absolutely. It's a hard, hard, hard benchmark. Yes, it's a tough benchmark.
And the next question comes from the line of Karl-Johan Bonnevier from DNB.
Good to hear that you are going up against tough benchmarks again, and good to see that the recovery seems to be gaining momentum. Just a question on that and particularly looking at that interesting chart you showed on your working hours per sold room. We hear a lot of noise about problems to find staff and rebuilding the operation again. How are you faring on that side? And do you see a lot of cost inflation to be able to do it?
Thank you for that question, which is extremely relevant. It has been extremely difficult, especially, I would say, in the beginning of this last quarter. You can imagine from going from a very low level in end of Q2 into a peak in July with a lot of demand and then getting enough people.The good thing for Scandic is that we were quite good, I think, in steering the mix between people that were on furlough, and -- so we could recall a lot of people from furlough in -- especially, I would say, in Sweden, Norway and in Finland. And also in Denmark, we have another solution almost like the furlough.But we had still issues and we did have issues. We still have some issues here and there where it is difficult, especially to find enough -- enough chefs in certain markets. And we have also had issues of finding housekeeping people.I think in the other areas of our business, we have solved it fairly stable. The good thing about both when it comes to the housekeeping, for instance, there, we have a lot of payment, which is union -- agreement with the unions. So this is stable for until we need to renegotiate in 1.5 years from now. So that is pretty stable. So we do not see pressures on salaries, it has more been difficult really to find the people.But the problem is much lower now than it was just a few months ago. We have solved it. And of course, we have had a lot of people running fast. And we should also bear in mind and remember that in a short period of time, meaning in mid-December, we will see also a slower occupancy level into the first part of next year until, let's say, Q1 will be almost -- at least it's normally much lower than all the other quarters.So we should be careful not to take in more people right now than we actually -- so we shouldn't dismiss people in a month or 2 again. So we try to run a bit faster here and now. And of course, we pay extra salaries to those that are working more, but that's also to balance out this risk when it comes to next quarter. So I think we steer it quite well. I don't see in short term that we will have a huge pressure on the salaries since most of them are actually on a union agreement.
Good to hear. And continue on that note, when you're looking you will have a very busy new opening pipeline in the first half of next year. Is this a staffing problem also in setting up these new units? Or do you feel that you are quite secure in getting these new operations into similar good pattern as you have in your own portfolio at this stage?
I think we will -- this will hit some of the -- rest of the portfolio actually because what we do since a lot of these openings are in our core markets where we have a lot of employees already. So what we do in to secure stable openings of these is actually to move a lot of people from the existing Scandics. Also to secure that we -- in a very fast way, to Scandify these -- what we call Scandify these operations and secure that we have a steering model that is well known with Scandic, the operational model.So what that is actually creating, let's say, problems in some of the existing hotels. And then it is easier for us to pick up people in well-known hotels, of course, that way. So I think, of course, it's not easy under the current conditions. And I definitely hope that all of the Nordic opens much more up for -- also foreign workers, et cetera, which we need in our industry. But until we see that happening, we will try to steer it internally as well.
Excellent. And just looking at the pipeline, obviously, we in the markets are now maybe turning our perspective into the opportunity in '23, '24. And looking at the pipeline, obviously, busy '22, but there is not much to come in '23, '24. When do you think you are ready to start to go for new projects and let's say, build the growth profile for the next couple of years?
We have definitely, definitely been slow in doing that in the last period, and naturally because we have concentrated on getting the company sail through the crisis, and it has not been really the time to sign a lot of new deals. But we are on the side of this, negotiating quite a lot of contracts. So I feel comfortable that during the coming 12 months, we will add new hotels to this portfolio of the pipeline.But of course, there might be -- there might be a period of time in between where we will have a few less openings than what you see right now and especially for '22, which is a lot -- with 9 openings. We have -- I don't think -- I can't recall we have had 9 openings even before the pandemic in 1 year. We normally were at between 6 and 8 openings in a good year. So -- but we will add to the pipeline in markets where we feel there's a need for that.
And we have 1 more question from the line of Benjamin Sandland-Taylor from Berenberg.
So in terms of the occupancy figures you reported, I was wondering if that included the quarantine stays. And if so, if you could provide any information on the RevPAR for the quarantine stays?
Yes, we will not disclose that separately. It's a very special business. And I have to say here, I admire our Norwegian sales organization, but because they have been extremely successful in bringing that business into Scandic because it's hard competition there.I think the nature of this, it also, of course, creates a displacement because you cannot sell this room to other customers. But I think the reason why we pointed out is that we actually get paid for non-stay, and that is possible for us to calculate here. So that's the reason why we -- why we comment on this result effect separately.But of course, the non-stay is, of course, excluded from the occupancy numbers, but to say that what have the occupancy has been without that, it's impossible because you need a full-scale test, because it would be impossible to sell this room anyway. And to some extent, yes, but we don't know to what extent.
And as there are no further questions, I'll hand it back to the speakers.
Okay. Then thank you very much, as always, for piling into this reporting. And I would say, as always, feel free to come back to us and just contact Henrik Vikstrom directly if you have further questions, then we are ready to answer those as well. Otherwise, we look forward to speaking to you again, if not before, then it will be in February, for the full year reporting. Until then, have a very good day. Thank you.
This concludes our conference call. Thank you all for attending. You may now disconnect your lines.