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Thursday, June 13, 2024

Tough times for outlying hotels

While hotels in many Norwegian cities and around airports are enjoying high occupancy rates, those in outlying areas keep struggling to fill their rooms. Nearly seven of 10 rooms are empty at inland hotels, and owners fear new rules restricting foreign tour bus operators will only make things worse.

A new analysis from Nordic Hotel Consulting (NHC) showed strong figures for overall hotel operation in Norway, but newspaper Dagens Næringsliv (DN) reported that the situation varies widely from region to region. Those located outside metropolitan areas, especially in mountain areas popular with tourists, have been losing out to Norwegians who opt to buy their own hytter (cabin) or holiday condominiums, and foreign tourists who visit Norway on large cruiseships or stop coming because touring Norway by land is expensive.

“Both the domestic and the international competition is very tough,” Hilde Charlotte Solheim of business organization Virke told DN last week. “Not all of the hotels are going to survive, and it only will get worse if the authorities set up more obstacles.”

Among them are new, highly controversial regulations that will severely limit operations of foreign tour bus firms in Norway that can offer much lower tour package prices than Norwegian operators. District hotel operators are furious that they weren’t consulted when the regulations, aimed at protecting the Norwegian bus industry from foreign competition, were adopted. The hotels fear a big drop in business from foreign tourists, if the foreign tour bus operators are kept out of Norway.

Calls by Virke and many of its hotel and tourism industry members to overturn the regulations have met refusal from state officials including Transport Minister Magnhild Meltveit Kleppa of the Center Party, who otherwise champions the interests of outlying districts. Now the hotel owners and Virke are considering a class-action lawsuit against the state, arguing that the so-called “cabotage” restrictions violate European free trade rules. Several hotel owners have resigned in protest from the employers organization NHO, which backed the bus rules, and joined Virke instead.

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