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Challenges come with many new hotel beds

The tourism industry must expect lower occupancy and lower room rates with three new hotels being built in a short time.

Svalbard Adventure Group AS has started construction of a new hotel next to Kroa, and both Sandmo & Svenkerud and Po Lin Lee are planning to build hotels at Elvesletta. Last year, 51 percent of Longyearbyen's lodging capacity was utilized. The previous year the figure was 39 percent. Now there will be hundreds of new hotel rooms.

"That leads to a challenge to be able to fill up all the beds," said Ronny Brunvoll, director of Visit Svalbard. "When the capacity increases in a short time, experience shows lower occupancy and lower room prices."

He said during peak season accommodations are full, but during the mid and low seasons the industry is still facing challenges.

"If the scenario is that there is between 50 and 60 percent more space, we need to increase the number of tourists during the peak season and increase the number significantly during the low season," he said.

Must grow
The tourism director said the Longyearbyen Community Council has declared it wants the tourism industry to grow and become an important pillar for the city.

"They have certain targets for how many annual jobs will come via the tourism industry," Brunvoll said. "Should we reach that figure the logical consequence is a need for an increased capacity of accommodations, and that we must grow in the high season and
especially in the low season."

If more tourists comes, the travel industry must ensure it can receive them within the environmental and safety regulations imposed by the government and the industry itself.

"We do not want to put undue pressure on nature and cultural heritage sites, and there is good input into the thought process of how to do things," Brunvoll said. "It is not a given that all snowmobile tours must go to the east coast. Perhaps local experiences will be enough for many."

More overnight stays
The number of tourists and overnight stays has increased in recent years.

"As of October, we had a 13 percent increase since last year and we seeing that it is going in the right direction," the tourism chief said. "We see that the peak season is starting to get full, but the period from October to January is still a challenge even though we clearly are moving in the right direction. February and September are starting to get good."

Might the new hotels creating problems for established accommodations?

"We cannot look at that problem," Brunvoll said. "Competition must be expected and our job is not to limit competition. The challenge is that with capacity rapidly building, we expect pressure on occupancy and prices."


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