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Scandic corporate presentation
Ready to grow
Contents
A word from the CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Scandic in brief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Brand value/revenue generation . . . . . . 6
Growth strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Service philosophy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Human capital management . . . . . . . . . . . . . 12
Efficient operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Sustainable business operations . . . 16
Design & construction . . . . . . . . . . . . . . . . . . . . . . . . 18
Contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
3
A word from the CEO
Welcome to Scandic!Dear reader,
This publication has been created to give you insight into our “new” – and fast-growing – European hotel com-
pany. We are pursuing an active growth strategy since April 2007, when we became an independent company.
Consequently, we have announced ten new hotels in the last half year!
As you flick through these pages, it is my hope that you will notice what a young-at-heart, creative and
modern company we are. Also, Scandic is one of the largest hotel operators in Europe, running over 130
leased hotels. We are proud to be a recognised leader in sustainability. Since 1994, we have made sustainable
operations an integrated part of our business. Whether you are a hotel owner, a customer, a developer, an
industry advisor or a student, I do hope that you will find the booklet useful. Again, welcome to Scandic!
Frank FiskersPresident & CEO
4
Scandic in brief
Scandic is a leading mid-market hotel operator. At the end of 2007, we operated 134 hotels in 9 countries, offering 24,000 rooms. Ever since we started in 1963, our business has been based on the idea of offering trouble-free and accessible accommodation for all. Since 1994, we are also committed to making sustainable operations an integrated part of our business. We are proud to be a recognised leader in this area. Scandic is embarking on a new growth phase. Over the next few years, we are planning to add 20,000 new rooms by further strengthening our position in the Nordic market and extending our footprint to Northern and Eastern Europe, the Baltic states and Russia.
Key success factors
• A leader in sustainable business
• Growth-oriented
• Market leader in the Nordic region
• Clear mid-market focus
• Easy to do business with
• �Omtanke – to show consideration –
for customers and stakeholders
• Centralised and efficient approach
• People-driven
The Scandic Compass is our guide to creating value for our customers, our team mem-bers and our owners whilst actively contributing to a more sustainable future.
5
Strong geographical coverageKey figures, 2007
Revenue €744.9m
EBITDA €102.9m
RevPAR growth (06–07) 8.4 %
One of Europe’s largest hotel operators
Team members 5,700
Hotels 134
Rooms 24,000
Locations
Sweden 67
Denmark 21
Finland 23
Norway 15
Belgium 2
Estonia 2
Netherlands 2
Germany 1
Lithuania 1
Our vision :
“Creating value by being the place and inspiration for conscious people in a better world”
6
Brand value and revenue generation
The choice of pride and value
From our beginnings in 1963, when we opened our first 25-room
hotel, Scandic has grown to assume a market leadership position
in the Nordic region. In fact, Scandic is one of Europe’s largest
hotel operators. At the end of 2007, we operated 134 hotels in 9
countries, offering 24,000 rooms. The strength of our brand and
the resilience of our business model are clearly demonstrated by
the fact that a Scandic hotel generally maintains a RevPAR pre-
mium over a full business cycle in relation to its local competition.
In effect, Scandic’s RevPAR Penetration Index* generally exceeds
the average by as much as 25–40 % in the Nordic market. Our
attractive mid-market service concepts and our unmatched pres-
ence in key locations have given Scandic a uniquely well-balanced
guest mix, including business from over 2,000 corporate con-
tracts. This is an important driver of the stability of our revenues.
Customer loyalty also translates into stability. Scandic’s loyalty
programme, with more than 200,000 active members, drives
close to 40 % of our business.
Scandic’s approach to revenue generation and revenue man-
agement is highly process-led and focused, supported by state-of-
the-art technology. Our centralised sales and marketing organi-
sation creates significant synergies, while also offering control
and coordination of all sales and brand development activities.
Scandic’s IT system incorporates innovative techniques and tools
for optimising revenue on a day-to-day basis, e.g. through proac-
tive pricing strategies. We can remain agile and fine-tune our mar-
ket offerings, with a view to maximising RevPAR, by continually
reviewing, analysing and aggregating local market data. Owing
to our seamless and integrated systems infrastructure, this deep
market knowledge can instantly be put to use in all sales chan-
nels, not least on our new five-language website, incorporating
a unique 3-click booking functionality. Between 2003 and 2007,
online bookings grew at an annual rate of 46 %. In addition, the
weight of our efficient central call centres in the sales channel mix
has increased substantially.
We are convinced that the strong recognition and loyalty
that the Scandic brand enjoys today originate from our belief in
building our business on smart, value-for-money concepts and an
unrivalled consistency of service delivery. An unflinching commit-
ment to sustainable business operations is also a fundamental
part of Scandic’s corporate identity. Since 1994, we have devel-
oped an environmentally, economically and ethically sound busi-
ness that is setting a standard for the industry. The significance
of this dedication to our brand equity is growing as people every-
where become more conscious and discerning as consumers. In
a nutshell, we want Scandic to be the choice of pride and value.
Scandic’s brand equity is built on a distinctive promise to our customers and stakeholders,
first-class execution and consistency of service.
* The RevPAR (Revenue Per Available Room) Penetration Index is an indicator of a hotel’s market share versus its local competitive set. It is a function of both room rates and occupancy.
7
DIAGRAMThe online share of our bookings has increased shar-ply in the last few years, as has the weight of our ef-ficient central call centres in the sales channel mix.
= RevPAR penetration 125–140 %*
• Strong revenue drivers in all segments
• Market leading position and a strong, attractive brand
• Loyalty programme with 200,000 enthusiastic members driving 40 % of our business
• Over 120 sales professionals manage more than 2,000 accounts
• Strategic partnerships drive 10 % of our business
• Easy 3-click booking functionality on our brand website, in five languages
• Sophisticated revenue management practices
Scandic connects well with our stakeholders
Need
For t
he fe
w
Traditional upscale brands
Traditional mid-market and budget brands
For a
ll
Pride
Room nights by segment, 2007
Business 47%Leisure 45%Meetings 8%
Scandic’s balanced guest mix lends stability to revenues
Online channels are growing in importance
Gross bookings via Scandic websites, 2003 – 2007
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
0403 05 06 07
8
While the European hotel industry is still highly fragmented,
consolidation is on the rise as independent hotel owners and
operators seek to link up with larger brands that offer greater
stability of revenue and stronger operational support. Further-
more, most new hotel development projects involve well-known
branded chains that aim to leverage international synergies and
economies of scale. Scandic is determined to take active part in
shaping the mid-market segment of the industry by adding some
20,000 new rooms over the next five years. Our new growth strat-
egy is based on further strengthening our position in the Nordic
market as well as extending our footprint to Northern and Eastern
Europe, the Baltic states and Russia. The approach to realising
our growth agenda will be multifaceted, including the acquisition
and conversion of existing hotels as well as new development
projects. Although Scandic generally favours variable lease agree-
ments, we plan to increase our use of both franchising and man-
agement contracts.
We took an important first step in the autumn of 2007 by
commencing development of a 572-room hotel at Potsdamer
Platz in Berlin, due to open in February 2010. In addition, construc-
tion has begun on the 300-room Scandic Khimki Moscow, also
due for completion in 2009. Scandic will operate the hotel while
our partner, IKEA, will build and own the property. At the begin-
ning of 2008, nine Scandic hotel projects, counting 2,750 rooms,
were in the pipeline.
Scandic’s growth platform is characterised by its flexibility,
scalability and efficiency. Our centralised support organisation
and the fact that we operate our own hotels, often under a lease
agreement, allow us to quickly and smoothly roll out new con-
cepts and adjust service delivery across all our hotels. Our history
of operating in a high-cost environment has required us to contin-
ually look for creative solutions, remain flexible and maintain a flat
organisational structure. This frame of mind is part of our Nordic
heritage, and it will remain with us as we embark on our journey
to become a major European mid-market hotel operator. We will
also nurture, develop and clarify our position as the smart choice
for the conscious traveller. Scandic is neither a player in the luxury
nor in the hard budget segments. We will maintain this strict
focus. Our smart, sustainable and value-for-money services and
solutions are appreciated by the corporate and leisure segments
alike, resulting in a very balanced guest profile and consistent rev-
enue and profit generation over the business cycle.
Growth strategy
A new agenda for growthWe will strengthen our position in the Nordic market and extend our
footprint to Northern and Eastern Europe, the Baltic states and Russia.
9
24,000 rooms in 200744,000 rooms by 2012
The 300-room Scandic Khimki Moscow is currently under construction and will open in late 2009.
The 400-room Scandic Kista Stockholm will open in 2010.
The 572-room Scandic Berlin Potsdamer Platz is under construction and will open in early 2010.
The 181-room Scandic Norra Bantorget in Stockholm was acquired and converted from a Best Western in November 2007.
10
Showing consideration for our guests and the world around us is at the core of Scandic’s service philosophy.
Service philosophy
More than just a place to stayAt Scandic, we have a desire to be more than just a place to stay.
We want our hotels to be places of inspiration, where people can
recharge their physical, mental and emotional batteries. Our goal
is quite simply to have our guests leave us with more energy than
when they arrived. This is what Scandic’s service philosophy is all
about: our hotels should be accessible, and staying with us should
be easy and invigorating. Our job is to make sure that our guests
are able to fully focus on the purpose of their stay with us, whether
it is leisure or business. Omtanke, a Scandinavian word meaning
to show consideration, is one of Scandic’s core values. It is truly
fundamental to the way we operate, in that it not only guides our
interaction with guests and colleagues, but also deeply influences
the way we think about sustainability and how we relate to the
world around us. People are becoming more and more conscious
of the choices they make, and Scandic’s long-time position as a
leader in sustainability contributes to making Scandic the best
conscious choice.
All elements of Scandic’s service offering are founded on our
core value of consideration and are integrated in our centrally de-
veloped and managed service concepts. These concepts are high-
ly appreciated by our guests for their creativity and innovative-
ness, as well as for their consistency and the high level of comfort
they create. Hotel owners and investors value their contribution
to an efficient and profitable operation.
Our service concepts:
Breakfast
Meeting
Internet access
Shop
Frequent guest programme
For families
Fitness centre
percentage of respondents who gave either a ”completely satisfied” or ”very satisfied” rating
Overall guest satisfaction
79%percentage of respondents who responded either by ”definitely would” or ”probably would”
Willingness to recommend
78%
percentage of respondents who responded either by ”definitely would” or ”probably would”
Willingness to return
81%Scandic’s customer satisfaction survey for full year 2007.
11
Scandic hotels are meeting places for thousands of people every-
day. In fact, Scandic is the leading conference organiser in the
Nordic region. Our events range from get-togethers for a handful
of people to conventions for thousands. Our goal is to provide a
framework for effective meetings in a peaceful – yet productive –
environment. Our practically appointed meeting rooms, our deli-
cious and healthy meeting menus and the professional support of
our dedicated staff appeal to people who look for a fresher kind of
conference setting.
Free unlimited wireless internet access in all areas of our ho-
tels makes life easier for our guests, as does the in-lobby Scandic
SHOP where lighter food, snacks and drinks are on offer 24 hours a
day, as are toiletries, toys, clothes and something to read. Scandic is
also in the planning stages of introducing 24-hour fitness centres
into all our hotels. We expect the roll-out to be complete by 2008.
To many people breakfast is the most important meal of the
day. Our fresh and contemporary buffet selection offers every-
body the opportunity for a good, healthy start to the day. There is
something for all tastes and preferences, including a vast number
of ecological and low-calorie products.
Families have always been a core segment for Scandic and
SIGGE the Hedgehog – the mascot and friend of our young guests
– is at the centre of our family concept, designed to ensure that
parents and children alike enjoy their stay with us. Amenities in-
clude a play area in most hotels during weekends and public holi-
days, special family rooms with extra beds and cots for the young-
est children, changing tables, and microwaves for heating up baby
food. Of course, we have a children’s menu in our restaurants.
Fresh and modern Nordic design – based on distinctive princi-
ples of comfort, value and sustainability – is an integral part of our
overall service concept, offering Scandic guests a positive hotel
experience whilst making a good conscious choice.
12
At Scandic, our team members are not just helping our customers to a pleasant stay.
They are building, protecting and strengthening our brand, everyday.
Human capital management
Being part of a winning team
Scandic has always been a value-driven company and, by living
our values everyday, we create an atmosphere of loyalty, busi-
ness focus and service-mindedness, while at the same time
building our employer brand. Our commitment to sustainable
business operations also serves to strengthen our attractiveness
as an employer.
Being a large international employer with a rapidly expanding
business, we know that having a well-developed talent manage-
ment programme is crucial in order to attract, develop and retain
talented people. Providing continuous development opportuni-
ties for our team members and future leaders is imperative, and
this is a central part of Scandic’s talent management strategy. In
our own Scandic Business School, we offer a broad range of inter-
nal leadership programmes as well as an extensive training port-
folio on how to improve work procedures and customer service.
In order to make Scandic Business School accessible to as many
team members as possible, we use both classroom training and
e-learning. We have delivered over 11,000 e-learning courses since
1998. A large part of the training portfolio can also be accessed on
the Knowledge Portal on our intranet – an efficient self-service
tool for personal development.
We believe that only highly motivated people can deliver top-notch
service and efficiency. We also believe that a good hotel manager
makes all the difference to the success of a hotel, which is why
we invest so much in providing them with effective management
tools and training. Having good management in place contributes
greatly to the commitment and satisfaction of our team members,
and Scandic’s extraordinarily high employee satisfaction scores are
a true testimony to the successful combination of our local hotel
managers and our central corporate support.
We believe in shared values with our customers, team
members and partners. New employees soon discover that we
are not just talking about our values, but that we are living them
everyday. All new joiners go through an e-learning program,
“CheckIn@Scandic”, in order to find out about Scandic’s values
in the economic, ethical and environmental areas. This ensures
that every new team member quickly gets up to speed on our
company. Health and safety is something we take very seriously
at Scandic, both for ourselves and our guests. We want to make it
easier for our team members to lead healthy lives, e.g. by offering
non-smoking programmes and by promoting physical exercise
and healthy food choices.
13
At the end of 2007, Scandic had over 5,700 team members in 9 countries.
Over the next five years we will welcome over 3,000 new team members.
Are you proud to be working in a Scandic hotel? 85 % positive, 12 % neutral, 3 % negative
85%Do you enjoy your work?83 % positive, 13 % neutral, 4 % negative
83%Are you motivated by your current duties? 78 % positive, 15 % neutral, 7 % negative
78%In general, do you feel that Scandic guests receive very good service? 88 % positive, 10 % neutral, 2 % negative
88%Based on 4,856 respondents (in the Internal Satisfaction Index survey carried out by Netsurvey, 2007).
Our industry-leading scores on team member satisfaction and motivation
14
Scandic’s renowned efficiency is built on relentless bottom-line focus, a high degree
of centralisation and our long-time commitment to sustainable operations.
Efficient operations
A hotel chain, as opposed to a chain of hotels
Scandic’s business is based on a very simple concept: to offer
trouble-free and accessible accommodation for all. This idea is
pervasive in our organisation and it deeply affects the way we
manage our business, everyday. Our guests appreciate the de-
pendability of our service and the consistency in our execution,
regardless of which of our hotels they choose.
We like to think of ourselves as a hotel chain, as opposed to a
chain of hotels. While the difference may be subtle, it captures the
essence of what sets Scandic apart from many of our competitors.
Firstly, it means that we are highly experienced in running our own
hotel operations. Our relentless bottom-line focus partly derives
from the fact that our portfolio is dominated by leased hotels.
It can also be traced to our roots in the high-cost Nordic region:
continuously striving to improve productivity and profitability has
always been natural to us. Secondly, it means that our business
model is characterised by a high degree of centralisation. Our sup-
port organisation ensures that our tried-and-tested concepts are
implemented in the same way across all our hotels, assuring qual-
ity, reliability and profitability. Scandic’s way of doing business
means that everyone is truly on the same team. Our company
is built on openness and inclusiveness, enhancing information
sharing and the leveraging of relationships across functions and
locations.
This all adds up to considerable benefits in terms of opera-
tional efficiency and economies of scale. As we expand and lever-
age our capabilities across an increasing number of hotels, these
gains will continue to accrue. Scandic’s business model is highly
scalable. The strength of our support organisation allows us to
bring new hotels into the Scandic family quickly and economically.
They reach full operational capability in a very short period of
time, owing to our standardised service concepts, effective train-
ing programs and strong infrastructure, not least in the areas of
marketing, sales, purchasing and HR. Also, our long-time commit-
ment to running our business in a truly sustainable way improves
operational efficiency and thus contributes to the overall profit-
ability of a Scandic hotel.
15
Efficient operations enable our service concepts while sustaining margins• Centralised functions for IT, technical services, HR, marketing
and sales provide considerable economies of scale• Buying power through unrivalled central procurement
agreements
The average Gross Operating Profit margin for a medium-to-large Scandic in 2007.
47.5%
Only six weeks passed from signing the agreement to acquire a hotel at Norra Bantorget in
downtown Stockholm to the opening as a Scandic. In this short period of time, the hotel was
rebranded and integrated into the Scandic infrastructure.
16
For Scandic, sustainability is not just about being part of and contribute to a sustainable society and environ-
ment; it is about driving new business, working smarter and lowering costs. It is about being part of the solu-
tion, not part of the problem. Since the start, our sustainability programme has saved us over €18M.
Sustainable business operations
Showing the way in sustainable business
In this age of rapidly increasing environmental and social aware-
ness, concern for the impact of business on the world around us
is very much in focus. Recent years have seen the climate change
issue, and sustainable business operations in general, propelled
to the top of the global agenda, making people everywhere more
conscious as consumers. For us at Scandic, after 15 years of com-
mitment to sustainable practices, it is just business as usual.
Working with sustainability is good for our business. Scandic’s
leadership position in this area has made us the preferred hotel
company for numerous major companies and organisations and
we believe that we have only seen the beginning of this change.
Since 1994, Scandic has worked closely with The Natural
0
20
40
60
80
100
■ 1996
■ 2007
Energy Unsortedwaste
Single-packeditems
Carbon dioxide
Water
Resource consumptions per guest night, 2007 vs. 1996%
• Half of Scandic’s top 50 corporate clients requested detailed information on our sustainability programme before signing with us
• Scandic’s public sector conference contracts increased by 37 % in 2007, as the weight of sustainability para-meters increased in the purchase decision
400 million single-packed toiletry items have been eliminated since 1996.
We have significantly increased our use of ecological foods.
17
Step, an organisation with focus on promoting global sustaina-
bility by guiding companies, communities and governments onto
an ecologically, socially and economically sustainable path.
For more than eight years, Scandic has been associated with the
Swan Label, a non-profit organisation whose mission is to contribute
to reducing the consumer burden on the environment. In 1999, we
opened our first Swan-labelled hotel. Today, all our 107 Swedish ho-
tels are certified by this eco-label, one of the toughest in the world.
Our partnerships with The Natural Step and The Nordic Swan
have been very successful, not just in terms of being environmen-
tally sound, but also in financial terms. Our programmes have,
for example, resulted in savings of €9.6M in energy costs as well
as the elimination of 400 million single-packed toiletry items.
Together with our guests, we have decreased unsorted waste by
67 % since 1996.
Our team members are the most important part of our sus-
tainability programme. All new starters go through an extensive
training programme in order to ensure that our sustainable prac-
tices are implemented and further developed at each level in the
organisation, everyday.
Our sustainability programme involves every area of Scandic’s
operations, including sustainable design and construction. By
using better-designed water taps, toilets and showers, we have
managed to cut our water consumption by 15 % since 1996 –
enough water to fill 863 Olympic swimming pools.
All hotels report their resource usage in SIR, our Sustainability
Indicator Reporting system. We track each hotel’s individual de-
velopment over time, as well as compare it to other hotels’ results.
The objective is to constantly benchmark, learn and improve.
We do not strive to be a part of our community; we are a part
of our community. Each Scandic hotel runs its own local “society
programme”. Activities vary depending on location, but include
the donation of bed linen to shelters and the support of local
youth activities. We believe that being an attractive employer im-
plies being a good citizen. In turn, this means shared values with
our guests, team members, partners and society at large.
Scandic’s major awards in sustainable business, 2006 – 2007
“S:t Julian Disability Award” City of Stockholm, Sweden
“Glassbjörnen Environmental Award” GRIP Forum, Norway
“Oslo’s Urban Environmental Prize” Oslo City, Norway
“Best Environmental Program” Grand Travel Awards, Sweden
“Stilpriset Hjärter Ess” accessibility Stil, Sweden
“Swedish Recycling Award” Recycling & Miljöteknik, Sweden
The Sustainability Award, “SLEEP” European Hotel Design Awards, London, UK
“Best CSR Programme” International Hospitality Awards, Paris, France
Scandic is a 2008 finalist in the World Travel & Tourism Council’s “Tourism for Tomorrow Award”.
Partners
Scandic uses environmentally friendly detergents and cleaning products.
18
Scandic’s guiding principles of comfort, value and sustainability deeply
influence the way we approach hotel design and construction.
Design & construction
Efficiency, comfort and sustainability begin with the design of our hotels
Scandic’s service philosophy and our dedication to sustainable
hotel operations form the foundation of our comprehensive hotel
design and construction guidelines. Our experts can provide
complete guidance on the construction and appointment of the
hotel, including exteriors as well as interiors. We can also give
advice on the latest in energy efficient technologies as well as
on sustainable materials and construction practices. Involv-
ing Scandic early in the design and construction process also
benefits hotel owners and developers by ensuring tight financial
project control, economical sourcing of high-quality materials
and equipment, in addition to professional management of exter-
nal suppliers and contractors.
In the end though, the main advantage of working with Scandic’s
technical services team is that it guarantees a building with opti-
mal efficiency and space utilisation that also contributes to pro-
viding guests with an experience that meets their high expecta-
tions. Our design reflects our Nordic heritage; it is light, practical
and simple while also being comfortable and pleasing to the eye.
All Scandic hotels have a local maintenance crew that is
continuously supported by our technical specialists, based in our
head office as well as in regional offices. This set-up ensures that
hotel assets are always maintained and serviced in an optimal
way. These specialists also provide support and guidance to local
hotels during large rebuilding or refurbishment projects.
19
Join us!We would be delighted to speak to you about any development opportunities.
Please contactNevio Sagberg Sr Vice President Business Development
Jesper Engman Director Business Development
ScandicP.O. Box 6197SE-102 33 StockholmSweden
Telephone: +46 8 517 350 00
