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A year in which strength was decisive

2021 was another challenging and turbulent year. The new year began as the old one had ended – with severe restrictions and very low demand in the hotel market. As the infection situation improved, the pace of vaccination programmes increased and the most severe restrictions were eased, demand slowly began to pick up again at the start of the second quarter. After the UK pushed ahead with phasing out many restrictions on 17 May – a date of particular significance to all Norwegians – demand really took off. It was against the background of this new dawn that we suffered the huge shock of Anders Nissen’s tragic passing on 30 May.

Crisis management was challenging but sound
Anders Nissen’s death was a great loss on both a professional and a personal level. It is impossible to underestimate Anders’ contribution to Pandox. He was a forward-looking captain who steered the ship knowing the value of skilled employees and a strong organisation. This became very clear following Anders’ death. As soon as the tragic news broke, my inbox and mobile filled up with messages from employees expressing their grief – but also how determined they were to continue developing Pandox in the spirit that Anders represented. It created a great sense of security in a very difficult situation.

During the year the Board of Directors has had many difficult and time-consuming matters to deal with. There was the recruitment of a new CEO and CFO, as well as ongoing management of the Covid-19 crisis from an operational and strategic perspective. With Anders’ death, of course, the recruitment of a new CEO and a new CFO became the priority activities.

New CEO and CFO in place
Following a systematic recruitment process and careful deliberation, the Board appointed Liia Nõu – Acting CEO since 21 May 2021 and Pandox’s CFO since 2007 – as the Company’s new CEO on 23 August 2021. Liia is a modern leader with many years of experience in the hotel property market and is a person in whom both the Board and the organisation have very great confidence. The Board sees Liia Nõu as the person who can best achieve the required balance between Pandox’s need for both continuity and change. Liia also retained her responsibilities as CFO until Anneli Lindblom took up her position as the new CFO on 1 December 2021. In Liia and Anneli the Board has secured a very strong leadership duo who – along with other employees – will pilot Pandox safely out of the pandemic.

Other important areas that remained in focus in 2021 were the tenants’ ability to pay, Pandox’s cost levels, the value of hotel properties, investments and, not least, internal and external communication. The Board has also provided active support to executive management on banking and financing matters, particularly through the Finance Committee.

Many interests to balance
Pandox is a pan-European hotel property company interfacing with many different stakeholders in multiple countries. In a crisis of this magnitude there are many difficult decisions that must be made, not least in balancing tough discussions on rent in the short term with constructive dialogue on continuing profitable partnerships in the longer term. We have great respect and understanding for the difficult position that Pandox’s business partners are in because we share the same market. Through its business model, with a majority of revenue-based leases and the hotels we operate ourselves, Pandox has direct exposure to the hotel market. Through its hotel properties, Pandox is an important part of the tourism and travel industry infrastructure. Pandox’s fixed rents and contractual minimum rents cover the administration costs and capital costs of the hotel properties, providing the foundation required to run hotel operations.

Sustainability increasingly important
In recent years Pandox has moved up a gear in its sustainability efforts. The Company has a clear agenda that is being driven forward with great commitment and a clear business focus. Sus-tainability is a key matter for the Board and will be an important driver of Pandox’s operational and financial development in the long term. Examples of projects that the Board considers to be of particular importance include the green investment programme, BREEAM certification of hotel properties, and the importance of diversity and inclusive workplaces. Green financing is also an area of interest, with potentially positive financial effects for Pandox.

A strong position for value creation
Pandox holds a strong position in the hotel property market, which secures good opportunities to be part of future growth in the hotel market and also to create our own growth. The recovery that we saw in the second half of 2021 shows that individuals and companies are keen to travel and stay at hotels when re-strictions are lifted. The underlying growth in the hotel market is strong and I am convinced that Pandox will once again generate substantial value.

I would like to express my gratitude to Pandox’s employees, shareholders, Nomination Committee, Board and business partners for their solid combined efforts in 2021.
It is my firm conviction that Team Pandox is well equipped and ready for a better 2022.

Oslo in March 2022
Christian Ringnes