Three new hotels are planned in Longyearbyen during the next few years. Spitsbergen Travel officials said they don't fear competition from those, but instead are planning to build one themselves.
"We will also expand and develop," said Knut Harald Holst-Hansen, the company's administrative director. "We have plans for a new hotel and have come quite far in the planning. Financing is okay, but we're lacking a site and we are working on that."
He said the company is in contact with the Longyearbyen Community Council about available lots in connection with a review of the city's land-use plan.
Spitsbergen Travel has blueprints for the new hotel, but is not revealing them publicly until the company has resolved the matter of finding a site. Holst-Hansen acknowledged, however, the company is envisioning a hotel with 150 to 200 rooms.
"If we are going to increase the total revenue of tourism in Longyearbyen, there must more beds," he said.
No fear of Thon
The Spitsbergen Travel director said he is not afraid of Thon Hotels, which has decided to build a hotels at Elvesletta.
"We welcome Thon Hotels in all respects," Holst-Hansen said. "I think we can handle our business and Thon theirs. In addition, I am of the opinion that we are better off cooperating, not working against each other."
In addition to building a new hotel, Spitsbergen Travel has refurbished the guest rooms at the Radisson Blu Polar Hotel. The rest of the hotel will also be renovated and expanded.
"Our investments are dependent on access to sites and a good working relationship with both the Longyearbyen Community Council and The Governor of Svalbard," Holst-Hansen said.
"If the market conditions are right, much will probably be settled during the spring regarding how much should be invested and when. Personally, I strongly believe that we will implement plans quite quickly."
The company plans to invest about 300 million kroner during the coming years, if all goes as planned.
Spitsbergen Travel is also in full swing refurbishing Spitsbergen Guesthouse in Nybyen, which has changed its name to "Coal Miners' Cabins." Expansions plans at Spitsbergen Hotel (Funken) are also envisioned, although some groundwork will be required first.
"A spa project there our project there is still of interest," Holst-Hansen said. "That is something we must take up with the Longyearbyen Community Council in the land-use plan."
Flights remain a challenge
In addition to Thon, Po Lin Lee is also planning to build a hotel at Elvesletta. Svalbard Adventure Group has started building its new hotel adjacent to Kroa. But Anne-Margrethe Tveit, hotel director for Spitsbergen Travel, said she believes there is a market for several major hotels in Longyearbyen.
"I think it's exciting that there are new competitors here," she said "It provides an increased focus on Svalbard as a tourist destination, creating an increased interest from a wider audience. The challenge is capacity on flights and the availability to get here. But to get more operators here also creates greater pressure to get more flights here in the long term.".
According to the hotel director, it is not just exploration-minded tourists that are coming to Svalbard
"I believe future tourists in Svalbard will represent a broader market than has been the case until now," she said. "More who have traditionally traveled on package tours to the south are now wanting other, more exotic, destinations. This should also be an exciting destination for families, friends and businesses. There's also going to be the sports-minded who have active holidays. An example is the ski marathon, where there is an enormous interest."
Something for everyone
She said she believes prices for lodging are reasonable for what is now available. During high season, that means about 3,000 kroner per night for a double room at the Radisson.
"It is the same here as at other destinations," Tveit. said. "During an initial phase there will be an overcapacity of beds and there is always someone then who will dump prices. But in the long run it is those who believe in and focus on their product who win. It is always easy to dump your price, but hard to build it up again. It is very dangerous to prostitute yourself on prices."
She said Spitsbergen Travel has several types of overnight accommodations, and something to offer to both price-sensitive customers and those willing to pay for premium lodging.
"It is one of our big advantages," she said.
Translated by Mark Sabbatini