Welcome to the Scandic Hotels Group Q4 2023 presentation. For the first part of the conference call, the participants will be in listen-only mode. During the questions-and-answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the speaker, CEO Jens Mathiesen. Please go ahead.
Good morning everyone, and thank you for joining this call of Scandic's fourth quarter presentation. My name is Jens Mathiesen, I'm the CEO of Scandic, and right now also the acting CFO of Scandic until our new CFO, Pär Christiansen, joins us, which is actually only in a couple of weeks from now, 1st of March. With me here today, I also have the head of investor relations, Rasmus Blomqvist, and also the VP of business control, Mathias Lundqvist, though those are both here to support the Q&A session if need be. Today I will guide you through the quarter and also the full year result and give you some comments on the outlook as usual. So with that, let's jump directly into page 2 for some highlights. I'm very satisfied with the performance in the quarter that concludes another strong record year for Scandic.
The positive momentum that we saw from the third quarter also continued throughout the last month of the year with good demand from both corporate and leisure travelers, and also from meeting and event business. With strong commercial focus and high efficiency, we improved net sales and delivered a solid result in the quarter. Occupancy and average room rates increased across all our markets compared to last year, and we performed slightly better than the overall market. One of the highlights in the quarter was the announcement of the implementation of OPERA Cloud, a complete cloud-based IT solution that will enable us to excel within digitalization, commercial, and the ways of working. Backed by a strong financial position, we have accelerated the pace to take the guest journey to a new level and to improve overall efficiency.
The rollout of the new system to all hotels and central functions is progressing according to the plan and will be completed before summer this year, as we have also announced earlier on. We see great potential taking Scandic's guest journey to its next level. For example, we have high ambitions with our leading loyalty program, Scandic Friends. We want to increase conversion and engagement and improve the member experience through a more personalized and relevant program as well as new exciting partnerships. Moreover, we have ambitious plans for our other booking channels such as web and app. You will hear me talk much more about this in the coming quarters as well. So we are investing more in these areas to bring Scandic to yet another level. Another highlight was the recent signing of our new hotel in Nuremberg.
We will continue to expand in Germany, and we are now intensifying our efforts by strengthening the business development team in the region to capture the opportunities. I'm pleased about the successful payback we did of around one-third of the convertible bond. This creates substantial value for all shareholders by significantly mitigating the extent of a potential dilution. The offer was completed at balance level, fully subscribed, and entirely settled in cash. Moving to some comments on the result in the quarter, please turn to page 3, where you can see quarterly Adjusted EBITDA development since the beginning of 2020. We are reporting an Adjusted EBITDA of SEK 451 million compared to SEK 476 million for the same period in 2022. Excluding one-offs, the result was good and in line with last year.
I'm very satisfied with the performance given the higher pace of development in building a stronger Scandic for the future. I will provide further comments on the result, of course, later in this presentation. Please turn to page 4 for some full year highlights. We achieved another record-breaking year with net sales and Adjusted EBITDA reaching all-time high levels. Excluding one-offs, our performance resulted in an improved Adjusted EBITDA margin of 11.4%, well above the target of 11%. The market remains resilient, and it's evident that people are prioritizing experiences, travel, and hotel stays, whether it's for business or for pleasure. In addition to our strides within digitalization, we successfully launched Scandic Go, our new brand targeting the fast-growing economy segment.
Scandic Go is an important growth enabler, and also the, let's say, interest from the property owners is very, very high on all our markets, which is promising for our future growth. As mentioned in previous quarters, we are increasing the activity level within portfolio development to reach a maintenance Capex level of 3%-4% of the net sales already now in 2024. We had a strong free cash flow of SEK 1.8 billion for the year. This was actually higher than total net debt, including the convertible, at year-end. Despite a higher pace of development and the cash buyback of the convertible, we further decreased the debt level throughout the year. Scandic's financial position is strong, with a net debt to Adjusted EBITDA ratio well below our financial targets.
Lastly, the board's recommendation not to pay dividends is linked to the approaching maturity of the convertible bond later this year. Our priority is to maintain as high flexibility within the financial situation as possible while also investing in Scandic to enable faster growth and improved profitability. The dividend policy is one of our financial targets, and we aim to resume paying out dividends as soon as possible. So all in all, I'm very, very proud to deliver yet another record year. Please turn to page five. Here you can see the monthly market occupancy in the Nordic countries. The market development was favorable in the quarter, with demand slightly higher than last year. Scandic's occupancy rate increased to 57.9% in the quarter, an improvement compared to the same period last year and slightly higher than the overall Nordic hotel market.
For the full year, Scandic's occupancy increased by 3.7 percentage points, reaching 61.4%. Additionally, we sold just above 8% more rooms than in 2022 and slightly more than in 2019. There's still promising long-term recovery potential in certain segments. The number of guests from Asia and Europe are not back at the pre-pandemic levels, and the market for larger conferences and congresses are also, and the trade shows, they have not fully rebounded. So there is definitely a potential for those. Please turn to page 6. This is market data for average room rates for Sweden, Norway, Finland, and Denmark, indexed to the corresponding month in 2019. Prices continue to develop positively, and Scandic's average room rate in the quarter was 4.1% higher than last year and 17.4% higher than in the fourth quarter of 2019.
As for now, we expect continued positive price development in 2024, supported by a solid market situation with continued good demand. Please turn to page 7. Here you can see the market RevPAR development indexed to corresponding months 2019. The development was good in the quarter with all markets above 2019 levels. Norway continues to perform strongly with RevPAR 24%-36% higher than in 2019. And Scandic reported a RevPAR of SEK 734 in the quarter, which was 5.5% higher than in 2022 and 9.2% higher than in 2019. Please turn to page 8. We continue to strengthen our presence in Germany, and in the quarter, we signed a new 311-room hotel in Nuremberg that we will take over on the 1st of March this year.
This is our first hotel in the growing city, and the hotel was recently fully renovated and reopened in the fall of 2023. With its top location in the city center and great meeting facilities, we will have an attractive offering to both corporate and leisure travelers. As for all our hotels, sustainability is a central part of Scandic, and the hotel will be certified by the Nordic Swan Ecolabel. We now have seven hotels and close to 2,500 rooms in this important growth market of Germany. Please turn to page 9. We also announced a long-term agreement and rebranding of the 174-room Holiday Inn City Center Hotel in Helsinki that we have operated under a franchise agreement with IHG since acquiring Restel back in 2017.
The rebranding to a Scandic hotel will be completed in 2025, and the landlord, Exilion, will undertake a complete renovation of the hotel, expected to start in September this year. Once reopened, Scandic will recertify the hotel by the Nordic Swan Ecolabel. The hotel has a great location in the middle of Helsinki, next to the central station and tourist attractions. Please note that this hotel is already part of Scandic's hotel portfolio today, but as you heard, as a franchise hotel. Please turn to page 10, where you see the pipeline. We are making good progress signing new hotels, and we have noticed a growing sense of optimism in the market and in our discussions also with the property owners. By the end of the year, we had 2,138 new rooms in the net pipeline, accounting for around 4% of the total portfolio.
This marks a substantial increase, more than doubling the number of rooms in net pipeline compared to year-end 2022. To further improve guest satisfaction and optimize both growth and profitability, we constantly evaluate our portfolio for extensions or exits. During the quarter, we left two hotels, and we plan also to exit two more hotels in the current quarter. Please turn to page 12, and I will take you through some of the financials here. When you look at the financial performance for the quarter, our net sales increased 3.5% and reached SEK 5.4 billion, and we deliver a solid result of SEK 451 million. Excluding one-offs related to repayment of some state aid in Germany and Norway, as well as some contribution from housing from refugees in Norway, we deliver a good result in line with last year.
Given the higher pace of development, which is partly reflected in the higher central cost for the quarter, I'm pleased with the performance and how we maintain high efficiency throughout the organization while investing more in the future. So looking into 2024, we anticipate growth group costs around this level per quarter, which you see in the fourth quarter. It's according to plan, and it's in line with our strategy building a stronger Scandic for the future. I also want to remind you that we had a positive one-off last year in the first quarter of around SEK 40 million, and we don't expect any notable one-offs in the first quarter of this year. Please turn to page 13. Both net sales and Adjusted EBITDA reached a new all-time high level, with all markets improving compared to last year.
Net sales increased 14.1% to almost SEK 22 billion, and with a slightly improved Adjusted EBITDA of SEK 2.6 billion. Adjusted for one-offs, we deliver a strengthening margin of 11.4% compared with 11.1% in 2022. The performance was driven by a strong commercial focus and high operational efficiency. Please turn to page 14. In the quarter, free cash flow amounted to SEK 549 million, and we report a strong SEK 1.1 billion in free cash flow for the year. Working capital was negatively impacted by the repayment of variable rent debt for 2022 of SEK 715 million. For 2023, variable rent debt amounted to SEK 430 million, which, let's say, the majority of this to be settled and paid back during the first half of 2024.
Backed by our strong financial position, we are going to return to a maintenance CapEx now and a level ranging between 3%-4% of net sales yearly. Additionally, as we have more openings also in 2024 and 2025 compared to last year, we expect somewhat higher CapEx expansion. I want to highlight that only around 50% of the planned maintenance CapEx is committed at current state. This gives us very good financial flexibility. Please turn to page 15. Some additional comments on the financial position and the convertible bond. We continue to lower the debt, and comparing with year-end 2022, we lowered net debt from around SEK 3 billion to SEK 1.5 billion, including the convertible. We had a net debt in relation to adjusted EBITDA of 0.6x. This is significantly lower than our target of between 2x-3x.
Available credit facilities amounted to SEK 3.4 billion, and we had a total available liquidity of SEK 3.5 billion at the end of the year. Our financial position is, in other words, very strong. Lastly, a few more words on the convertible. The bond has its conversion price of SEK 43.36 and it matures in October this year, 2024. With the buyback, we reduced the extent of potential dilution from 17.8% to 12.7% of the total share capital. The potential dilution effect is, in terms of number of share, decreased from around 41 to now 28 million new shares. A significantly lower potential dilution in total. And given our strong financial position, we have available funding to handle a non-conversion scenario if that becomes necessary. With that, I would like to give some concluding comments on the outlook. Please turn to page 17.
We believe in an overall good Nordic hotel market in 2024, supported by continued solid demand and positive price development. The year has started off stable, with booking levels in line with last year but at higher prices. I want to remind you all about the earlier Easter holidays this year compared to last year. Easter is now in March, compared with April last year. For the first quarter, we therefore expect slightly lower occupancy level than last year but at continued higher prices. After two record years in row, we are commercially and financially stronger than ever. Our ambitions are very high, and we are now accelerating the pace of development to take Scandic to next level.
With my over 15 years of experience in this company, I'm confident that the initiatives that we are now driving within IT and commercial will lead to greater digital transformation in the next 2-3 years than what we have seen in the past 2 decades. Now we really are laying the foundation for the future, and we expect to see financial gains from this already in 2025 and ahead. Focus for 2024 is now to deliver on our strategy, to improve and grow the portfolio, and to maintain a high pace within digitalization to create better guest experiences and higher operational efficiency. At the same time, it's important that we keep a sharp focus on the commercial and operational performance, making sure that we drive prices well while also working with high efficiency and cost control.
With that, I would like to take the opportunity to thank all of Scandic's team members and all our guests for another fantastic year. So thank you, and back to you, operator, for the Q&A. If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from André Juillard from Deutsche Bank. Please go ahead.
Good morning and congratulations for these good results. A few questions, if I may. First one about Finland. What is the trend you are recording at the moment in this country, which is close to Russia and probably suffers from more tension compared to the rest of your locations? So could you give us some more color about what you are seeing in this country? Second question about the MICE segments. You were saying that you were still not back to the level you were in 2019. Could you also give us some more detail about the trend you are seeing and the pipeline of the events you can see in the Nordics? And third question about the convertible bond. We've seen that your free cash flow regeneration was pretty good, that your leverage is very low.
Could you give us also some more visibility about your intention, considering that the bond is now in the money, which means that it could be converted? What is the plan? Thank you.
Thank you very much for good questions. First of all, starting with Finland, what is important, of course, to see in the trends? We saw that Finland is developing. We see that the Finnish hospitality sector has grown and is developing versus the year before. We, of course, still have a negative impact from lacking the long-haul business, especially Asia. And as long as the war is continuing and Finland cannot fly over Russia, we expect that to continue. But I think the Finnish market has started to adjust their initiatives and are focusing a lot on also the, let's say, alternative tourist markets like Europe and U.S. So we have seen that they are starting to grow. And you saw also in the latter part of the quarter how it's growing compared to earlier, and you see that price is developing.
I think the Finnish market is recovering steadily but still lacking some of the long-haul business. That is also to your next question when it comes to MICE. I think MICE segment has been very stable. We are seeing a lot of the normalized, let's say, stable meetings when it comes to the domestic meetings, and both small and mid-sized meetings have been growing. What is lacking in the MICE is definitely the big congress segment and the global congress segment. It takes years when you start booking in those until they come to your market. It's not a Nordic issue. It's a global issue that some of these big congresses, they disappeared during the pandemic, and now they have booked in big congresses for the future. Most of them starts, I would say, in a more normalized way from next year and ahead.
So we see that 2025 is an even stronger congress year than actually 2024. But it is recovering, and we expect, let's say, long-term that this will bounce back and recover as well. And that's a big upside for us in the years to come. But we are lacking the congress market. But meeting market, MICE segment is stable. And then lastly, to the convertible bond, what is most important for us to say is that we have a very strong financial position, as you know, and you see it in the numbers. And that creates all flexibility on our side. We have a lot of different scenarios that we eventually can work with, and of course, you know them all.
We will discuss this with the board of directors later this year, what to do, especially when you see if we are at a share price at current level, then you will probably see new shares being issued and thereby a dilution. If it's below the strike price of the 43, then we have financial muscles to just buy it back. And of course, we have a lot of flexibility. We have a lot of other things we can do in the future: pay dividend, buy back shares, things like that. But the most important thing is that we, as a company, have the flexibility to deal with this convertible bond, which is only SEK 1.2 billion. And having such a low debt situation as we have, 0.6x EBITDA, then we have, let's say, all flexibility on our side. Okay. Thank you very much. Maybe one additional short question.
If we have a negative effect from Easter in Q1, do you expect a natural positive one in Q2, or the effect should be relatively limited?
Yeah, that's spot on. Of course, we only comment on the first quarter in this one, but it's spot on. You can say, yes, we have a negative effect in March, but it's equally positive in the months after. For the first half, it doesn't have a negative effect.
Okay. Thank you very much.
Thank you.
The next question comes from Karl-Johan Bonnevier from DNB Markets. Please go ahead.
Yes. Good morning, Jens Mathiesen. Good showing, and then congratulations to good execution in 2023. Just coming back to the lack of big congresses. But if you look at, say, the event calendar for 2024 compared to 2023, how does it look when looking at big events like concerts, sports events, or similar kind of things that could affect you?
Yeah, but it's also very interesting to see because, as you know, last year we had a lot of concerts and events. This year, we also have concerts and events. It's other type of events. We have Bruce Springsteen coming this year. We have Taylor Swift coming this year, which, of course, will be you see all the buzz around Taylor Swift right now. So I'm sure that will create a lot of good energy, and we definitely see a high booking pace. You also have Eurovision in Malmö. And what is interesting with that is also that we have a lot of bookings in Copenhagen at the same time during Eurovision. Last year, we had Coldplay and a lot of other bands that were playing. If you look at the concert calendar, it's a bit lower this summer, the coming summer, versus what we saw last summer.
But still, I spoke to Live Nation, that stands for a lot of these, and they still work on and plan more concerts than what we have heard about so far. So it might change during the year that you see more bands coming in. But this will be, I would say, quite a good event calendar all in all. So we see no issues with this year versus what we saw last year. When it comes to congresses, we see that we get more bookings in, especially in the future. So for 2025 and 2026, we have more bookings on the big congress market in Gothenburg, Copenhagen, than what we see for this year. But there's a lot of events going on and also smaller and mid-sized congresses. But the very large, 15,000+ people, those are for 2025 and ahead.
Now, good to hear. And I saw you alluded to in your comments that you saw both good business and lesser demand growth in 2023. How do you see the best business segment developing in 2024, given what you might have done in pre-agreements with big corporates and similar kind of things?
No, but I think we, of course, as you know, we negotiate all the corporate agreements where we, of course, do not know exactly how much they will deliver, but we agree on the price levels for this year. We had a very good and stable, I would say, renegotiation period during this autumn and in the beginning of this year, meaning that we do not get signs from corporate clients that they have, let's say, travel restrictions or things like that. The companies we work with, all the corporate clients, they expect quite a normalized, let's say, level of activity for this year. We see it's being very, very stable. When we look at the leisure market, it's also continuing. You could say right now it's early days. It's only six weeks into the year.
We see that bookings are in line with the same period last year at higher prices. When we look at the bookings and interest for the seasons coming up and for the future of this year, it looks very stable. Comparing with last year, we should see no, let's say, signs and early signs that people are traveling less or spending less. That's very promising because now we should see effect from, let's say, household costs and things like that privately. It's holding up. You see a lot of activity. You see from airline figures. I'm traveling a lot with SAS, and I see a high number of people on those flights. For several days on Fridays, it has been fully booked. You need to book it early sometimes. That is promising for us this early in the year.
No, good to hear. Good to hear. I appreciate your comment about the step-up in central cost. But do you see? I also heard your comments about, say, having higher efficiency on the country level. Do you see part of that higher central cost being balanced by lower cost in the country segments?
Absolutely. We do see that we are more and more efficient in the operation and in the hotel level. We have also centralized certain functions to become more lean as one company, one Scandic. Yes, we are seeing that. I think the most important for you to be aware of, all of you, is that we really now are investing and investing quite a lot centrally in order to take Scandic to yet another level when it comes to digitalization. It might be a modern word, but it's everything with automating the way we work, the manning plans, how we work with that, how we have now centralized, let's say, a lot of the financial positions with one ERP system, whereas just a few years ago, we had different platforms.
We are now moving into a cloud-based platform for all hotels, which we are as we speak, we are nearly 130 hotels already on this platform, and the rest will be on the platform before summer. So it's according to timetable. And then we invest quite a lot in the new web and new app and also in our loyalty program to make it even more interesting for the guests. And being an old commercial guy, I have a lot of expectations to this because we are creating a guest journey that will be easier, more exciting, and with much better features. And of course, that should drive revenue. But also internally, with the workforce management plans and things like that, that we are changing into even better systems is also helping us in the admin work so that we save a lot of hours.
I'm very confident to say that we expect that this will improve our numbers when you look from 2025 and ahead.
Excellent. Excellent. One final for me. Looking at the Go segment, how quickly do you think that can develop? Because I guess that looks to be one of your better growth engines going into maybe 2025, 2026, if you can get it working.
The positive is that two things, that the interest is high. We had a very good start with the first, and we're opening the next during the summer now in Stockholm. But the interest is high on this one. So there's a lot of positive feeling around it, both from our guests. We had a very high NPS, so guest score has been good from opening. We also see another guest mix. We see more international guests, also good because then you're not cannibalizing on our current guest mix. But what is also interesting is that the landlords see a great potential in this because it's easy for us to convert an office building into a hotel and those things. So it is less back-office demanding, kitchen demanding, and things like that. So all in all, there's a high interest for this.
And then the other positive thing is, of course, that interest rates are expected to go down. So we see a growing appetite to invest more in new hotels going forward. And currently, we do have more than a handful that we sit and look at actively of new Go potential hotels. So there's quite a high activity level in the business development department right now talking about Go hotels .
If I remember correctly, before the pandemic, when you talked about the Go segment and the idea, you had a list of hotels in the current portfolio that you might contemplate changing into Go concept. Is that idea, say, gone? So we're just looking at new capacity, or is there some opportunities for converting existing Scandic Hotels into the Go concept?
No, but there are fewer than we had in the list because we see a large potential of adding new. But we do have a few internally that we are looking at, whether we should convert them into Go hotels. And as you know, we also operate some franchise hotels. And once, like you saw, now we will rebrand one of the Holiday Inn hotels into a Scandic hotel. It might be that we have hotels there. We will rebrand into Scandic Go in the future as well.
Excellent. Thank you very much, and all the best out there.
Yeah, thank you.
The next question comes from Raymond Koo from Nordea. Please go ahead.
Hello. Good morning. So a couple of questions from me, starting with the first one, also building on the higher central costs there. Have I understood that this is not something that's maybe that you adjust for, for example, the Oracle implementation that you talked about, and that maybe this higher figure should be at a higher level sustainably over time?
Yeah, it's a good question, Raymond, because let's say we have, as I mentioned before, we have a lot of initiatives going on. And I'm very, very excited about it because it is initiatives that will give us a lot of opportunities going forward and also create a lot of upsides, both internally, operational efficiency, and also for the guests. But as you see, you should expect, I would say, a cost level, which is maybe centrally between SEK 100 million and SEK 150 million for the year, which is additional cost to what you saw before. We started that already in Q4, so we actually have cost already linked to this in Q4.
Those central cost levels, you could expect continue quarter by quarter because this is, let's say, when you look at the central cost, it is more commercial and IT-related cost, especially where we now really push the speeder in order to take Scandic to a new level. I dare to say also to all of you that this means also that we have high expectations for how we can improve both growth on top line and operational efficiency going forward. But as many of these initiatives are going on during the year, the effects will be seen as of next year and ahead. I would say that's very early. So already next year, I see great potential to improve both our commercial capabilities and guest journey, but also some of the efficiency areas.
Okay. So I understood it as the implementation specifically for Oracle was to be completed by summer. So we should not be expecting that one to maybe trail off, or that's not something that you remove from your numbers adjust for, I mean.
No, I think, of course, it's a new platform we move everybody into, but it has been received very well. And as I mentioned, we are nearly at 130 hotels by the end of this week. So it's really progressing well. It is easier for the front office staff. It is easier to work with. And it is also taking less time to get the customers through the system on that. But most of this is actually, you could say, it's the hotel platform. And that enables us to then upgrade all the systems around when we talk about the web and the app and the loyalty program that gives us advantages. And those we can only benefit from after being fully rolled out with this system. So I would say, of course, I hope that I can see some things in the very latter part of the year.
I think as Q4 is also a small quarter, I don't think we should expect any effects during this year, but definitely as of 2025 and ahead.
Got it. Second questions. You wrote about maintenance Capex being maybe 3%-4% for this year. If we look at Capex as a whole, where should we expect that to be, including IT investments and sort of expansionary Capex?
No, but I think we have, if you remember, if you look at last year, we had just over SEK 500 million in Capex full year. And this year, we will spend, I think you should probably estimate around 3.5% around that area, ±, on maintenance Capex for the hotels. And then on top of that, we do have some minor investments on the IT Capex. But a lot of the initiatives we are taking running now within digitalization is actually OPEX. So that's running cost. We take it in. It's hitting, you could say, the EBITDA right away. But that's also because it's less system, and it's more manning and IT and commercial people that needs to do this transformation into the new platforms than it's actually, let's say, system-related and thereby Capex-driven. So I don't know.
The Capex for the year within IT is less than SEK 100 million, I would expect.
Okay. That's very helpful. And just finally one, on the convertible bond there. If you decide that it is appropriate to buy back them given the strike price trading at where you want it to trade, you used a Dutch auction before. Is it fair to assume sort of a different strategy if you were to buy them back again? And how are you reasoning around that?
Yeah. Raymond, it's a very good question because you can say we are getting time is running fast, and we are getting closer to October as days go by. What is very key for me is to have all opportunities and alternatives on our side. And I think I'm very proud to be a CEO in a company that has the financial muscles to do whatever is needed to deal with this situation. But we have not decided, and the board of directors has not decided, whether we want to do one or the other of these opportunities. And you can also imagine why should we today pay a premium to get rid of it when it matures in some seven months or so from now? I think we are not in a stress in this company.
I don't run this company just looking quarter by quarter to fulfill all analysts' expectations to a quarter. That's why I also are so proud of Q4 because we deliver a result in line with last year, even though we invest much more in the company. You could say underlying, it's actually a much stronger result. We are investing into the future, and that's the most important thing. For the convertible, I will be able, together with my good colleagues in this company and the board of directors, to decide whatever we need to do and to fix the convertible. For me, convertible bond, it's SEK 1.2 billion, yes. It creates a dilution if we issue the shares. Of course, we are here to do our maximum.
Let's say we have all focus, and I have all my focus in creating shareholder value long term. That I will do whether we do one or the other with the convertible.
Okay. Thank you. I'll get back in line.
Thank you.
The next question comes from Adela Dashian from Jefferies. Please go ahead.
Good morning. Just one question from me on the German expansion. Do you see additional opportunities to continue to invest outside of the Nordics? And should we also include maybe some Scandic Go expansion outside the Nordics as well? Thanks.
Very good question, Adela, because yeah, definitely, we want to grow outside the Nordics. I think Scandic, we have a leading position in the Nordics, and we want to maintain our position. So we will continue to grow in the Nordics, both with Scandic Go, Scandics, and Signature Hotels. But you're definitely right. I think for Germany, I think Germany is a very, very interesting market for Scandic Go hotels because there's a lot of economy hotels in that segment. So we really want to compete in those segments in the cities. And it's a huge, huge market with a lot of opportunities. It has been difficult to grow very fast because whenever you want to grow in one of these locations and prime locations, all hotel operators in the world, they want to get hold of such a hotel.
So it's not that easy in a German market as you might say it would be on our home turf in the Nordics. But yes, we will grow more in Germany. And we are looking at more opportunities in Germany as we speak. And we are doing that, I would say, constantly. And now we even step up in our business development. We are employing two new business developers, taking care of Germany, and of course, also looking at the northern part of Europe to see if we find other opportunities long term that could be of interest. But right now, we focus on Germany and German growth, but also invest more to speed up growth there.
Got it. That makes total sense. Would you say if you were to exclude your very strong market position on your home turf, would you say that competition outside of the Nordics tends to generally be higher? Is it less of a more consolidated or fragmented market outside of the Nordics?
Yes, it is. It is because you see, even though we are a market leader in the Nordics, we spend for approximately 15% of the market. If you look at the German market, the very big operators, they have a very low share of the total market. So it's a very fragmented market. And I think we have spoke about that also earlier. For us to compete in a Berlin market with close to 900 hotels, that's very interesting because we are a very strong Nordic brand. And we have a, let's say, respect for the brand in Germany is very, very high. We see we get very high NPS figures. So guests are very happy with the product. And we also say we see when we build Scandic hotels in Germany, we enter Germany with what we call a mid-market Scandic in the Nordics.
That is kind of an upscale hotel in Germany. In many of these cities, we do have some of the prime hotels in the city and have taken a very strong position in those cities. Scandic, even though we only have 7 hotels, I think we have achieved a very strong brand position in Germany already. That is giving me hope for the future growth.
All right. Thank you. That's what I figured. Thanks a lot. That's all from me.
Thank you.
There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.
But thank you then all for listening in. We wish you a very good day and a good first quarter. Talk to you soon. If any further questions popping up, you know where to find us. Just give Rasmus or myself a call, and then we're here to help you. But have a fantastic day.