Isavia Looking for development partner for a unique airport hotel development

Isavia, the operator of Keflavík International Airport (KEF), is exploring the feasibility of developing a new airport hotel at KEF in cooperation with an experienced developer and operator. As part of the preparation of a Tender, and to create awareness about the potential opportunity, Isavia has invited interested parties with extensive experience in developing and operating hotels, to answer a short questionnaire about the project. The questionnaire is part of an ongoing conversation Isavia strives to have with future partners.

“Our main goal is to enhance the overall experience and services at the airport for the growing number of passengers,” says Thorunn Marinosdottir, Commercial Director at Isavia. “We believe that a new airport hotel will not only address the increasing demand for high-quality accommodation but also contribute to the larger land development plan at KEF.“

KEF and the Hotel Opportunity

• Unique hotel development site adjacent to the terminal at Iceland’s largest and only hub airport
• Passenger numbers are expected to reach 7.8 million in 2023 surpassing 2019 level and projected to reach 12-14 million per annum by 2035
• Leading airport for transatlantic travel with even spread of passengers throughout year
• Potential to develop new sustainable 200+ bedroom hotel in a fast growing airport
• Limited competition with high rate and occupancy potential

KEF is the largest airport in Iceland and has long been established as a leading hub for transatlantic air travel as it is strategically located between Europe and North America. The airport is located a comfortable 30 – 40 minutes from the Reykjavík capital area with many attractions close by. In the past few years, passenger numbers have grown rapidly from 2 million passengers in 2009 to 7.3 million in 2019, with an estimation of over 10 million passengers by 2026.

Credit: Isavia.

Due to this rapid growth, there has been a shortfall in accommodation in the area, particularly for higher-quality rooms. With an ideal location near the future passenger terminal, the new hotel will feature a minimum of 200 rooms in the first phase with a possibility to double in size in the second phase, multiple F&B outlets, meeting rooms, a fitness center, and direct terminal access.

“It’s safe to say that KEF has established itself as a leading hub for transatlantic air travel between Europe and North America. Furthermore, Icelanders are frequent flyers, flying an average of 2.6 flights a year. We therefore think this would be a great opportunity for an experienced operator to fill this undersupply of bedrooms and provide facilities for growing regional business and KEF employee population,” says Marinosdóttir.

This initiative is part of KEF’s broader landside redevelopment program, which includes a new passenger terminal and a multi-story car park. Further details are available at www.kefplus.is/en.

Timeline

The PME will follow the principles of equal treatment, non-discrimination, and transparency, in compliance with Icelandic public procurement regulations. While Isavia plans to proceed with a Tender procedure, this PME is non-binding and mainly for gathering information.

Interested parties can submit their questionnaire responses via Isavia’s tender portal no later than 12.00 GMT on 30 November 2023. Subsequent stages, such as one-on-one clarification meetings, will take place between November and December 2023. The official Tender documents are expected to be published in 2024.

Isavia ohf. is the national aviation and air navigation authority of Iceland. A private limited company with 100 percent state ownership, it operates all public airports in Iceland, including Keflavík International Airport (KEF).