Icelandair Hotels is the largest and the leading hotel company in Iceland. The company runs and franchises two hotel chains: Icelandair Hotels, a chain of 3 and 4 star hotels and Hotel Edda a chain of summer hotels with a total of 1,500 rooms, which are located all around the country. In 2007 Nordica, the flagship, was separated from IH hotels and a franchise agreement was signed with Hilton International.
The market environment is still dominated by a steadily growing last-minute booking trend. The Internet plays a bigger role than before, resulting in a higher yield per guest. The Hilton brand gives us access to valuable resources and customers, which are intended to be utilized to the fullest, especially in the field of meetings and conferences. Furthermore, the company’s leading position in the domestic market has secured for its flagship hotel, the Hilton Reykjavík Nordica, an excellent reputation and a high level of satisfaction in the very demanding local corporate market.
Competition in the 4 star-category in Reykjavík grew by nearly 500 new rooms in 2007, leaving the Icelandair Hotels with 20% market share. Measures have been taken to secure the company’s continued leading position as a reliable, quality hotel provider in Iceland by signing on two new hotel properties in the city centre, as well as expanding the network in the countryside. Aggressive sales & marketing targets have been set for 2008, along with a strong focus on cost. The agreement with Hilton will strengthen the operation; it brings international recognition and a brand image second to none. Our intentions are to survive in a fierce market, where supply outweighs demand, by maintaining a position of leadership founded on quality and professionalism.
We are committed to profitable growth of the Icelandair Hotels operation, and this agreement with Hilton is a major step for us in that direction. With a continued focus on cost and aggressive marketing, we expect healthy growth over the next few years.