People in Sweden and in Europe have been traveling a lot more lately. Because of the economic boom that has been in a lot of countries people do have more money to spend. Sweden and especially Stockholm has lately become a very popular destination. Also big congresses and business meetings like to choose Stockholm for their meetings. The capital as it looks today does not have the capacity to let all those people stay at the hotels at the same time. Especially at the peak season the city can not offer enough beds to all their guests. A lot of new hotels are right now being built in Stockholm. More and more hotels compete to draw the best paying guests to their hotel. The companies that are building the new hotels are often already existing companies, but it still increases the competition on the market for the already existing hotels. The hotel industry is quite sensitive for changes of the business cycle. Some people talk about an incoming recession and in what way it is going to affect the hotel industry. There are shared opinions about the future for the industry.

The purpose of the study is to see how the companies deal with their market- and competition strategies when the hotel industry expands. We have also investigated what the hotel industry looks like today.

The essay is built on two interviews with two different hotels in the inner city of Stockholm. This essay is a qualitative study and we have used the deduction approach, with other words we tested the theories towards reality. We used a case study to investigate the reality and to see how the hotels deal with their strategies and to get an insight in what they think of the hotel industry today. We have also interviewed Göran Granhed who works at the organization for Sweden’s hotel- and restaurant companies and Ann-Charlotte Jönsson who works at the tourist organization Stockholm Visitors Board. We applied the theories of Michael Porter on the interviews.

The conclusion of the study is that the hotels do not change their strategies very much over time even though there is an expansion in the industry. We have discovered that the strategies for the hotels are very strong and well shaped and that is nothing they can very easily change. They have positive thoughts about the development of the increasing industry because they think it will generate a lot of benefits. The possibilities are bigger than the threats because the destination can handle bigger incoming congresses and business meetings. But they are still aware of the increasing competition and they have it in mind when they plan their purchases, their projects and their strategies.