Hello, and welcome to the Scandic Hotels Group audiocast for teleconference Q3 2021. Today, I'm pleased to present Jens Mathiesen, President and CEO, and Jan Johansson, CFO. Throughout the call, all participants will be in a listen-only mode, and afterwards, there will be a question- and- answer session. 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. 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 500 million . Results did include state aid and some temporary effects from our quarantine business in Norway. 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. Scandic's occupancy rate more than doubled from the second quarter to the third quarter, and it was 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. 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 2019, i.e., before the pandemic. We expect that to improve even further into November. We have increased the staffing since the first half of 2021 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 remain focused in our ambition to permanently strengthen our profitability level. If you please turn to page three. We are, of course, very happy to show a clear turnaround in earnings in the third quarter, following a year and a half 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 four, 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 occupancy was around 60% in Sweden, Norway, and Finland, and around 50% in Denmark.
Thereafter, we saw relatively stable development in Sweden, Norway, and Denmark in August and September on the back of increased corporate travel and meeting activity. That managed to more or less fully offset the gradual decline in leisure travel 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 restriction and especially I would say in Helsinki 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 five, we show market RevPAR development, index to the corresponding month in 2019. So for instance, September 2019, 2021 is indexed versus September 2019, etc. The Norwegian market has and was slightly above the 2019 levels in July and around 85% of 2019 levels in August and September. The other Nordic markets were at between 50%-70% of 2019 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 six. Where you can see Scandic's recent seven 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 loosening 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. All in all, we will enter November with a slight positive trend, which is of course very encouraging. Please turn to page seven. This is a very good slide to see how corporate demand has been growing recently. This graph shows Scandic's occupancy rate for weekdays since late August until the end of last week, and if you look at all Saturdays, as you can see, have been the busiest day of the week for us recently.
There has been a robust improvement on Monday to Thursdays in the past two 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. 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 eight. 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 2019, 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 three-month rolling, we are now slightly ahead of 2019 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 2019 levels. Handling staffing in a smart way is of course crucial for us in order to reach that target. Please turn to page nine. 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 four hotels with lease agreements during 2021, and we will open one more hotel this year, the Hamburger Börs 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, 2021. We have a solid pipeline for 2022 with nine hotel openings with a total of 2,700 rooms, and also three planned exits of 360 rooms. 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 that 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 is on the 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 380 million. That corresponds to a margin of around 10%. Of course a normal Q3, if you compare with the pre-pandemic level, that should be a margin maybe between 15%-20%, and that's the reason I think we can label this as a little bit more than halfway through. If we turn to the next page here, on page... We have a little bit of a delay here. Here it comes. Yeah. Thank you. Thank you. You can see the segment development here. Also last year, we had a lot of one-offs here.
It's SEK 370 million in total in one-offs last year, and that is attributable to state aid in the countries. 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. I think what we lack in Sweden right now to take the last step into the old levels is, of course, a much better demand in the big city, especially Stockholm here. We can see that development in regional cities is quite strong actually. There is a way to go in Stockholm. In Norway, we would say that the underlying development here is around SEK 240 million, if we correct for one loss 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 had been, I would say internally in Scandic, the leader when it comes to productivity development. We are actually already now on better level than we had pre-pandemic there, which is of course very helpful when it comes to driving margins long term. In Finland, the underlying development there is that we have an EBITDA increase of SEK 120 million, if we correct for one loss 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. One of the main explanations there is of course that they had restrictions 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 loss there.
Also here we see a good development in the big cities right now, Frankfurt, Hamburg and Berlin and Copenhagen, and there has been quite a rapid improvement in those big cities. As you probably understand, we need to have high occupancy levels in these cities in order to generate EBITDA. That's that. I think with that, we go over to the cash flow. That is, as I said earlier, quite easy to understand here. If we adjust for the one loss here, we expect that we have an underlying cash flow 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 break-even 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. I think in longer terms, I think the 50% is a rather good guidance over where our cash flow level is. I will come back to the interest net a little bit later on. This is a normalized interest level in a quarter would be around SEK 60 million-SEK 65 million, but there are some timing issues here. Very little working capital changes here during the quarter. As you can see, small numbers.
Investments, you have seen that we have basically only done or served the pipeline of new hotels during the pandemic here, which we are contractually committed to. We have a run rate of investment expenditures of around SEK 150 million a quarter. The current planning we are doing, we will probably stick to that number during the next foreseeable future, maybe five or six quarters ahead. We have, as Jan said, a significant pipeline from next year. This means that we will be very restricted on investment 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 the investments in existing operations a little bit. We believe that we can do that without jeopardizing customer experience and so on, as we need to restore Scandic to old debt levels. I think that is all for 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's a little bit complicated now because we have the IFRS 16 effects.
I mean, the interest expense there is a part of the rent, is the explanation, and this is of course non-cash. It materializes as cash for a rent payment, which is, if we exclude that, we arrive on a financial net of SEK 100 million in the quarter. One third of that is the payment in kind interest on the convertible bond which will settle. The convertible bond expires in three years time from now. The underlying financial cost is around SEK 55 million-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-SEK 60 million a quarter you can count on that. Then next page is just a very sensitivity analysis here.
I mean, already in the recovery there is an extremely good profit conversion use that you don't pay variable rent. We are closing in on hotels right now and which means that we need to start to pay variable rent that will pressure down the conversion a little bit. We will probably be closer to SEK 10 million in this interval when you have 1% change in occupancy. When the occupancy now starts to increase a little bit, Jens will talk a little bit more about the outlook a bit later on. We should be a little bit more cautious with the profit conversion as we enters into the interval of paying variable rents. However, we think that this guidance which we have done earlier is still very accurate here.
I mean, that's probably one of the few upsides with the pandemic that we have really learned how the business model works here and where the occupancy levels are or break-even levels are. Finally done on IFRS, which we have on next page here. 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 them to get lease discounts. We started with I think Q4 2020. There will be also lease discounts during quarter four this year, but they will start to fade out as of second half of 2022.
That is of course the main difference here, why we have such a big difference between non-IFRS and IFRS. This will converge down to zero and it will converge quite fast during 2022 due to that this 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. Then the convertible bonds, just to remind you on the IFRS accounting there, that equity split in the balance sheet is 78% debt and 22% equity. Of course now as we have a positive net profit in the quarter, we calculate with full dilution.
However, that will be very digital. If EPS turns negative, then it will go away and vice versa. That is that. With those comments, I will hand the word back to Jens.
Thank you. 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. We expect occupancy to reach at least 60% in November. As a slight positive curve on the occupancy for the near term. 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. The last weeks have been more positive. Better demand in the capital cities now when we see more increased internal Nordic business versus just a few months ago. All in all, a positive view on the coming period. With that, I hand it back to the operator.
Our first question comes from the line of Jamie Rollo from Morgan Stanley. Please go ahead.
Thanks. Morning, everyone. Thanks for taking my questions. 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, you've helpfully given us again the October and maybe November occupancy levels. Could you remind us what those two months were in 2019? We've got the quarter, but I don't think you've given us the individual months just so we can work out the decline.
Also any sort of flavor on pricing overall for the group in those two months. Is that also improving along with occupancy? If it's just one more on the rent numbers.
I think you've given us the discount you've negotiated for next year. 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? Thank you.
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 more stable price development in the market following the trends we have seen on the occupancy. Actually, when we look at the different markets, looking at, let's say, Norway right now, where we are very close to 2019 levels, you know, almost equal to the 2019 levels, that also comes to pricing.
When it comes to some of the other markets where we are, you know, when you see we are hitting around 90% in certain areas, we also see that prices follow. 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 relevant question, there's kind of a lot that's happening a lot on prices all over, not only our industry, but all over all industries right now, you know, with increased prices for food and for goods and for building workers, et cetera.
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. It's very early days when it comes to corporate contracting for next year. In the beginning of this process so far, we don't see pressure on the prices. We feel that we have a good way of continuing to grow prices also in the time to come. Then you have some questions on maybe some of the occupancies. I don't know, Jan, if you want to support that.
We had the rents, I think here also, which if we start in that angle, I mean, obviously, we have negotiated a lot of rent rebates here. 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-SEK 100 million a quarter there. There will be some rent rebates also next year, but I would probably say that not over SEK 70 million-SEK 80 million in total, something like that, for the full year and predominantly the first half. They will be much more insignificant but still helpful, I would say there.
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. Of course, as we mentioned here, we are halfway through in many aspects. 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 customers in those destinations to achieve that, those price levels. I think if you go out a little bit more to the regions, region cities also, I would say in many areas we are already at pre-pandemic level when it comes to pricing. It's a little bit that we need the extra momentum in the big cities, and that's a combination of more corporate and also that you get more events in the big cities, fairs and stuff like that, because we haven't seen that so far. I think Copenhagen and some of the other areas, they are still in ramp up those cities to attract people into the cities, both from a professional or business-related point of view, but also from a...
I mean, there hasn't been any big concerts or sports events and things like that, and we need that to get this extra price momentum, Jamie. We are not there yet. If we can keep the pandemic in where it is right now and we can continue to travel, I mean, those events will come through, and that will of course support our business.
Well, 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. We know the third quarter was 55%. You're not giving us the monthly data for 2019, but we can sort of triangulate it. Also we know that the third quarter in 2019, your occupancy was 76%, and this quarter you are 55%. Q4 2019, the company was 62%, so there's quite a lot of seasonality actually. Now you're running at about 60. Is it not correct to say that the reduction in occupancy is significantly less in October, November, the Q4 to date, than it was over the summer? Is that not correct?
Yeah, that's correct, Jamie. 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. We see a sequential improvement. I think
When you compare with 2019, that was an extremely strong autumn, especially in Finland, as there were so many events held in that city during Q4. It's a little bit unfair to compare with 2019. We see definitely sequential improvement in the business. How strong that momentum is remains to be seen a little bit, I would say.
Jamie, one thing which is a bit interesting and for us encouraging, of course, in this is that up to now, I would say individual bookings has been extremely stable, a bit fairly stable from summer and up to now. What we see is increasing is actually the group business, meaning a lot of meeting business, which is picking up. 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. 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. Also when we look at the inter-Nordic traveling, that has increased quite a lot lately. 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 is the drivers right now, and that's positive also for the major cities.
Okay. Sorry, just clarifying the rent point. Thank you for giving us the SEK 70 million-SEK 80 million expected rebates for next year. 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-2019. I mean, you've still got a similar sort of variable percentages and similar fixed minimums. Yeah. Okay. Thank you.
Yeah. Absolutely.
The next question comes from the line of Adela Dashian from Handelsbanken. Please go ahead.
Yes. Good morning, everyone. I'm still on the business traveler questions. 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 look 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? Also, is it, you know, smaller meetings or even larger conferences? Just some more flavor on the guest profile for business travelers at the moment.
Thank you for that. 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. 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. That is a bit new that we are picking up larger and larger meetings.
We also see that to Jan's 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 kind 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. We do see you know that 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. I think a lot of events, et cetera, which will drive that and larger meetings and things, we will see an increasing trend in the coming period. Of course Q1 will be a bit slower, especially in the beginning. 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. 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 have the exact figures around this. 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. We see quite a huge increase, but from very low numbers of course. When I look at the intra-Nordic traveling, that is increasing day by day.
We see also here quite a strong increase in the inter-Nordic traveling, which is also positive because that is driving up occupancy levels, especially in the capital cities, which we have been lacking. 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. That is absolutely positive. We see quite a stable pattern for the domestic traveling right now.
Got it. Okay. My next question, this might go back to the pricing questions. I'm sorry if I'm repeating myself. Obviously this segment is vital for your recovery, at least in the near term or the immediate term. I'm wondering if you've initiated any specific strategies or activities to capitalize on the pent-up demand, and that could be, you know, price reductions, or other things.
We do not need to do price reductions in order to get in the occupancy. I think what is good with our industry is versus 10 years ago, where we had a lot of fixed agreements on prices with our big corporate clients, then that is not the case anymore. We have less fixed corporate agreements. Much of most is this variable 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.
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. 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 current booking trends? Then do you view that that's 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?
We feel quite comfortable. I think when I say this, I got some estimates for October 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. When we say you know, 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. With what we know right now, we think we will be at a minimum of 60% for November, and I feel comfortable about that.
Great. That's all for me. Thank you very much.
May I just comment quickly on the occupancy in 2019 on Jamie's question. Our occupancy in the fourth quarter of 2019 was 62.2%, and we were around 69% both in October and November in 2019.
I have to remind ourselves that this was a very, very strong quarter, especially in Finland.
Especially in Finland. Absolutely.
Yeah. It's a hard benchmark. Yeah. It's a tough benchmark.
Okay.
The next question comes from the line of Karl-Johan Bonnevier from DNB. Please go ahead.
Good morning. Good to hear that you're going up against tough benchmarks again, and good to see that the recovery seems to be gaining momentum. Yeah. 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 at the end of Q2 into a peak in July with a lot of demand and then getting in 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. Also in Denmark, we had another solution almost like the furlough.
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 chefs in certain markets. 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 agreed with the union. This is stable for until we need to renegotiate in a year and a half from now. That is pretty stable. We do not see pressures on salaries. It has more been difficult really to find the people.
The problem is much lower now than it was just a few months ago. We have solved it. Of course, we have had a lot of people running fast. 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. 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 two again. We try to run a bit faster here now.
Of course, we pay extra salaries to those that are working more. That's also to balance out this risk when it comes to next quarter. 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. Continue on that note. When you're looking in, you will have a very busy new opening pipeline in the first half of next year. Is that 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 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. What we do 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 Scandify these, what we call Scandify these operations and secure that we have you know a steering model that is well-known with Scandic, the operational model. That is actually creating, let's say, problems in some of the existing hotels, and then it's easier.
It is easier for us to pick up people in well-known hotels, of course, that way. I think of course it's not easy under the current conditions, and I definitely hope that all of the Nordics opens much more up for also foreign workers, et cetera, which we need in our industry. Until we see that happening, we will try to steer it internally as well.
Excellent. Just looking at the pipeline, obviously we in the markets are now maybe turning our perspective into the opportunity in sort of 2023, 2024. Looking at the pipeline, obviously busy 2022, but then there's not much to come in 2023, 2024. When do you think you are ready to start to go for new projects and say build the growth profile for the next couple of years?
We have definitely been slow in doing that in the last period. Naturally because we have concentrated on getting the company solid through the crisis, and it has not been really the time to sign a lot of new deals. We are on the side of this negotiating quite a lot of contracts. I feel comfortable that during the coming 12 months, we will add new hotels to this portfolio of pipeline. Of course 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 2022, which is a lot with nine openings. We have
I can't recall we have had nine openings even before the pandemic in one year. We normally were between six and eight openings in a good year. We will add to the pipeline in markets where we feel there's a need for that.
Excellent. Thank you very much.
Thank you.
We have one more question from the line of Benjamin Sandland-Taylor from Berenberg. Please go ahead.
Hi, good morning. Thank you for taking my question. In terms of the occupancy figures 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. Thank you.
Yeah. We will not disclose that separately. It's a very special business system. I admire our Norwegian sales organization though, because they have been extremely successful bringing that business into Scandic because it's hard competition there. I think the nature of this also of course creates a displacement because you cannot sell this room to other customers. I think the reason why we point it out is that we actually get paid for non-stay, and that is possible for us to calculate here. That's the reason why we comment on this result effect separately. Of course the non-stay is excluded from the occupancy numbers.
To say that what had the occupancy been without that, it's impossible because you need a full-scale test. Because would it been possible to sell this room anyway? To some extent, yes, but we don't know to what extent.
Okay, thank you.
As there are no further questions, I'll hand it back to the speakers.
Okay. Thank you very much, as always for dialing in to this reporting. I would say as always, feel free to come back to us and just contact Henrik Vikström directly if you have further questions, then we are ready to answer those as well. Otherwise, we look forward to speaking to you again, on... 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.