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Thursday, July 18, 2024

Battle flares over popular North Cape

Norway’s North Cape is one of the country’s foremost tourist attractions where visitors have long had to controversially pay for access to the Arctic plateau. Now coastal voyage line Hurtigruten is challenging the Scandic hotel chain’s operating monopoly on the North Cape, through a complaint to the European Free Trade Association’s surveillance authority ESA.

Monopoly busters hope the sun will soon set on the Scandic hotel chain’s exclusive right to operate tourism infrastructure on the North Cape, and which also allows them to charge hefty tolls just for access to the mountain plateau. PHOTO: Berglund

Conflicts over how the North Cape is run have flared for years, and tourists have often been unpleasantly surprised by high tour fees or the toll they’re charged if arriving by their own car: NOK 285 (USD 33) per person this season. Many feel they’re being gouged, especially in a country which otherwise prides itself on open access to both public and private land through its friluftsloven, a national law ensuring access to the great outdoors.

Now the battle is raging primarily between Scandic and Hurtigruten, two of Norway’s largest tourism firms, with local politicians and the public landowner caught in the crossfire. Their rhetoric has fired up on the eve of a decisive meeting Thursday among members of the local Nordkapp municipal council that has authority over operating rights for visitor facilities at the North Cape. Scandic’s boss claims Hurtigruten is motivated by “greed” itself and just wants to take over Scandic’s monopoly. Hutigruten’s boss calls that claim “dishonest, bordering on a lie.”

Land grab
Svein Arild Steen-Mevold, chief of Scandic’s Norwegian operations, even went so far as to compare Hurtigruten and its chief executive Daniel Skjeldam to “a big seagull” that threatens other birds. Claiming that Hurtigruten has become a more aggressive company in recent years, Steen-Mevold told newspaper Dagens Næringsliv (DN) this week. “When the big seagull comes, it’s a bad sign for the other birds. They (the gulls) steal the food the others have caught. Hurtigruten has become a big seagull along the coast.”

Others argue that Steen-Mevold’s Scandic chain profitably inherited the “food the others have caught” when it took over Norway’s former Rica Hotel chain five years ago. Rica’s property firm Rica Eiendom, which still exists, had a long-term lease on the North Cape for years, first through the state land agency Statskog and more recently through Finnmarkseiendommen, a public entity to which official ownership of around 95 percent of Finnmark was transferred under the terms of a new law that took effect in 2006.

Scandic and Rica in its time invested in the visitor center on the North Cape and are keen to keep running it. Hurtigruten criticizes the North Cape’s visitor facilities and claims it could offer better visitor services. PHOTO: Berglund

That in turn led to the establishment of FeFo, which admiministers Finnmark’s huge land mass “for the benefit of the people of Finnmark.” Most of its revenues come from leasing the land. Rica Eiendom’s lease on the North Cape was transferred from Statskog to FeFo and Rica is currently paying around NOK 80,000 a year, a sum widely viewed as “modest” also in the eyes of FeFo.

Rica’s lease on the North Cape was due to expire at the end of last year and was up for renegotiation. FeFo wrote in a press release last June that it had warned Rica of “a big increase in what up to now has been a modest lease rate, while the host municipality (Nordkapp kommune) wants more revenues from the North Cape.”

Rica in turn subleases the North Cape to Scandic, which thus enjoys the benefits of its exclusive tourism operating rights, which in turn yield an estimated NOK 50 million in annual revenues for Scandic, based on the roughly 300,000 people visiting the North Cape every year.

Secret meetings
Newspaper Klassekampen, meanwhile, recently reported on a series of allegedly secret meetings held between officials of the Nordkapp municipality, Rica Eiendom and Scandic in Oslo last August. The municipal officials planned to reform their regulation of the North Cape and turn portions of it into open public space. In December there reportedly was another meeting.

In February, however, Nordkapp officials including Nordkapp Mayor Kristina Hansen of the Labour Party (who also sits on the board of FeFo) reversed their position and claimed they wanted to privatize the area. FeFo, meanwhile, claims it’s bound by a legal agreement that they must extend Finnmarkseiendommen‘s lease with Rica Eiendom and thus Scandic.

A winter’s view of the North Cape and its characteristically flat plateau, as seen from a naval vessel patrolling the Barents Sea. The North Cape has now turned into a battleground of sorts itself. PHOTO: Forsvaret/Bjarne Riisnes

That’s put Rica and Scandic on the defensive, and explains why Scandic’s boss bristles at the attempts by Hurtigruten to gain a foothold on the North Cape as well. DN reported on Wednesday that Hurtigruten has now won support for its efforts to bust Rica/Scandic’s monopoly from the national tourism industry employers’ organization Virke Reiseliv.

“Natural attractions must belong to the people,” Astrid Bergmål of Virke Reiseliv told DN. “Virke is critical of individual players being granted exclusive rights to the North Cape plateau.” She now thinks the Norwegian government needs to get involved, even though the state itself no longer has any rights to the North Cape.

“I can understand that Scandic wants to hang on to the special advantage it has received,” Bergmål added, but she claims it’s not good for the development of Norwegian tourism or the concept of free competition if a single player is in charge of the terms.

Steen-Mevold points to the investment Rica and Scandic have made in the North Cape’s visitor center, entertainment, food and drink. He also claims Scandic is not alone in earning money on the North Cape, with everyone organizing tours to the plateau also charging fees and being able to use Scandic’s infrastructure.

‘Always been run’ by a single operator
Hansen has said she takes all the fuss over the North Cape seriously, but told DN that the single-operator “concept” has simply always been in force. “If that’s in defiance of competition regulations, it’s been so for a long time.” The municipality of which she’s been mayor for many years is in charge of deciding who can charge entry fees to the plateau, with Nordkapp administration recommending in a new “area plan” for the North Cape that Scandic’s exclusive lease be renewed for another 10 years.

Hurtigruten officials, meanwhile, claim Scandic’s current facilities on the North Cape are poor. They want to build a new visitor center with free entry for its 200,000 cruise passengers every year and everyone else visiting the plateau, but are hindered by Scandic’s current monopoly.

“The municipality is not opening up for competition on the North Cape,” Anne Marit Bjørnflaten of Hurtigruten told DN earlier this month. “Rica and Scandic are earning enormous amounts of money on their monopoly. We had no choice but to complain to ESA over violation of the EU’s competition rules.” Even though Norway is not a member of the EU, its trade deal with the EU obliges it to follow EU rules.

Petter Stordalen, another large Norwegian hotel operator who also owns an 11 percent stake in Hurtigruten, joined the fight this week. “The North Cape is an enormously important tourist destination that Scandic gets to lease for small change,” Stordalen told DN. “Nordkapp municipality can take control over its most important resource, it’s able to allow in more players. That will create more jobs and generate higher income.” Scandic’s Steen-Mevold disagrees, arguing that Scandic already has created jobs, does a good job and that Hurtigruten is simply “trying to grab what we have created.”

Thursday’s council meeting was thus shaping up as its most important in history, according to state broadcaster NRK, with the outcome unclear. Hansen’s Labour Party holds nine of the council’s 19 votes, with the Socialist Left party (SV) opposed to privatization and favoring public management of the North Cape. That means the result “can swing both ways,” Jan Olsen of Nordkapp SV told NRK on Monday. Berglund



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