In 2004, in the aftermath of the devastation in the world economic markets, Swedish entrepreneur Per Hellsten was struggling to get his hotel business started. Six years later he has a company with more than 100 employees, hotels in four countries and three continents and plans for several more.
At a time when small businesses worldwide are stifled by indifferent government policies and the exorbitant cost of credit, Hellsten is succeeding — with government support but and credit from Nordea, one of Scandinavia’s largest banks.
The lessons for government are simple: Create a climate in which so-called low-tech businesses can thrive and grow. Work with those businesses. Make sure credit windows are open and accessible. You’ll see quick-fire development, job creation and economic growth.
Hellsten’s idea for a hotel came in the 1990s. An anthropologist by education, a former merchant marine and a PR executive, he had been working with some of the major music groups in Stockholm on building and developing production studio spaces. But the building he was using had a huge amount of unutilized space, which Hellsten felt could be converted into hotel rooms.
There were only two problems. He needed the City Council’s permission to convert the space, and he didn’t have the capital to build it out the way he wanted to. The fact that Hellsten was a neophyte hotelier didn’t help. But he kept on plowing the earnings from his music space management into developing the hotel rooms.
The going was slow. It took six years to get the planning permit. And when he got it, the music business imploded with the onset of Napster, and the going got even slower. Indeed dark clouds gathered when Hellsten heard that the owner of the building in front of his “hotel” was thinking of converting the building into a hotel as well. He saw the danger of a competitor nearby. By then he had spent so much time and energy and when he was able to find a major bank to lend him the money to buy the other building he began to build operating the building from his own company with his own workers and with himself as the engineer and designer.
Hellsten’s two hotels – the original property named Hotel Hellsten — and the property in front, Rex Hotel, opened in 2004. Neither were conventionally designed. In fact, Hellsten took painstaking care to populate each room with unique objects – old photographs he had collected in his trips to Asia and Africa, old furniture, decorative stoves. He worked to make sure that the objects and the design melded. The Hellsten hotels reflect the spirit and character of the city itself, traditional design and architecture combined with significant advances in technology. And then there are the little touches. Live Jazz on Thursdays; a recording studio in the basement; and an outdoor breakfast space.
Hellsten says that his marketing efforts have coincided with Stockholm’s rebranding of itself as a year-round destination, not simply a fair-weather tourist attraction. And as more visitors have flocked to the city — increasing annually by 15 percent — his occupancy rates have soared as well.
Increased occupancy has led to a new relationship with bankers. Per Hellsten is now able to borrow at interest rates as low as 1.8 percent, short term, and 3 percent for loans on a 10 year basis from Nordea. And the availability of capital has led to expansion. Hellsten has recently launched Rex Petit, a budget, full service hotel and plans to launch a 50-room boutique hotel in the city’s chic southern island. In the meantime he has also bought five new hotels – one in Lapland, three in Finland and one in Brazil. Not to forget that he is creating another one in the paradise island of Lame on the Kenyan coast in Africa.
In many ways Per Hellsten is an unusual entrepreneur. His vision of business is as much personal expression as it is financial. What he has achieved in six years – some of the worst in global economics – is remarkable. More remarkable perhaps is the fact that with a modicum of government cooperation and access to the financial markets others should be able to achieve similar results.
