The International Hotel Law Review: Denmark
i Impact of the covid-19 pandemic
As in almost all countries, the Danish hotel industry suffered massively from the pandemic with an extreme decrease in the number of nights booked from around 1.5 million per month in June 2019 to around 0.5 million per month in June 2020.4
Relatively early (March 2020) in the pandemic, Denmark took strict measures to attempt to minimise the impact of the covid-19 pandemic, including strict travel restrictions, assembly bans, face mask requirements and temporary closing down of all unessential activities, including the closing down of restaurants, cafés and hotels.
At the same time, the government introduced a range of different compensation schemes to mitigate the financial impact of the restrictions, including salary compensation schemes, compensation for fixed costs, etc., undoubtedly significantly reducing the number of business bankruptcies.
During the late summer of 2020, the testing capacity (PCR tests) increased, and during the early winter 2020 the PCR tests were supplemented with rapid tests performed by engaged private suppliers at no charge and no prebooking requirement resulting in a daily test capacity of more than 200,000 at the peak (equivalent to approximately 3.5 per cent of the population).
With the introduction of corona passports in the spring of 2021 and an accelerated reopening, the industry is slowly recovering, seeing increased booking figures in 2021 compared to 2020.
As the impact of the pandemic is slowly receding, the sector is expecting further increase in bookings; however, with the uncertainty that follows from the pandemic and associated travel restrictions.
In combination with a rather advanced vaccination programme5 where Denmark relatively early decided to exclude vaccinations from Johnson & Johnson and Astra Zeneca that have shown to be less effective against the currently prevalent delta variant, Denmark is relatively well positioned in relation to taking further steps towards a full reopening of the general society, with the future impact of travel restrictions being the dark horse for the hotel industry.
ii Pre pandemic
The number of nights booked with Danish hotels increased by 42 per cent between 2010 and 2017, despite the rental of private homes experiencing considerable simultaneous growth.6
The pre-pandemic increase in the number of nights booked at Danish hotels is, in part, attributable to increased use of digital booking platforms, which create a two-sided market by bringing hotels and potential guests closer together.
Booking platforms have become particularly popular on both sides of the market over recent years due to the fact that they lessen guests' research-related expenses (as the use of the booking platforms are free of charge for guests) and because the booking platforms enable small and medium-sized hotels to reach potential guests across the world, making hotels in this size range better equipped to compete with larger hotels that are typically able to bear the costs of traditional marketing themselves.7
Similarly, the capacity in the industry is undergoing considerable growth, and a 40 to 50 per cent increase in the number of hotel rooms in Copenhagen is expected over the next three years.8
More specifically, HORESTA (the Danish trade association and employer's organisation for the restaurant, hotel and tourism industry) predicts an increase of 6,000 new hotel rooms in Copenhagen alone before 2021.9 This increase is likely to have an impact on the capacity in the near (post-pandemic) future.
Denmark does not have legislation specifically governing foreign direct investment, nor does it have any policies aimed at differentiating between domestic and foreign investors.
As a state with a small national economy and relatively large international trade and investments, Denmark is generally very positive towards foreign investments.10
Indeed, Denmark is the fourth easiest country in the world and the easiest country in Europe to do business in.11
Pre pandemic, foreign investors in Denmark were particularly active on the market for larger investments, surpassing £120 million, and they were estimated to be involved in approximately 54 per cent of investments in the real estate market in Copenhagen in 2018.12 13
The capital is especially attractive to foreign investors for a number of reasons, inter alia, because it constitutes the largest real estate market in Denmark and because the turnover is higher in the capital than in other parts of the country.
Certain restrictions may arise, however, in connection with acquiring ownership of property in Denmark for foreign parties.
The rules on acquisition of real estate for persons who are not domiciled in Denmark can be found in the Danish Acquisition of Real Estate Act.14
According to the Act, persons who do not reside in Denmark or who have not previously resided in Denmark for a period of five years can only acquire real estate in the country with the permission of the Minister of Justice.15
This residency requirement is similarly applicable to companies and associations.
Therefore, if a company has neither a registered office in Denmark nor has been domiciled in Denmark for five years, the company must apply for permission from the Minister of Justice to purchase real estate.
There is, however, an exception for companies that are (1) domiciled in another EU or EEA country, (2) established in accordance with the laws of an EU or EEA country, and (3) have established or will establish branches or agencies, or will provide services in Denmark.
Such companies do not need prior permission from the Minister of Justice to acquire real estate in Denmark as long as the acquisition is a prerequisite for the pursuit of independent business or the provision of services.
Furthermore, if a legal person or entity that does not have the above-mentioned connection to either Denmark, the EU or the EEA, acquires a company that already contains real estate in Denmark, prior permission from the Minister of Justice is not required. This is because the ownership of the real estate remains with the acquired company.
A hotel property in Denmark will most often be owned by a Danish company or a foreign company.
Private persons, associations, etc., either Danish or foreign, are also free to purchase hotels in Denmark (subject to certain rules as mentioned above).
Danish legislation does not directly limit nor restrict ownership of hotel properties or operation of hotels to specific types of companies (e.g., with a certain amount of net worth or the like).
When owned by a Danish company, the company is typically a special purpose vehicle (SPV).
An SPV is a subsidiary company created by a parent company to isolate financial risk and is either a public limited company (A/S) or private limited liability company (ApS).
The SPV's legal status as a separate entity makes the SPV's obligations secure even if the parent company goes bankrupt and vice versa. This separation protects the parent company from risks such as bankruptcy and insolvency issues if the SPV goes bankrupt.
An SPV owning a hotel property will typically only have the one function; to own and operate the hotel property.
Transactions involving the purchase of hotels can thus happen by purchasing the entire SPV (that owns the hotel property), buying only part of the SVP, for example, 50 per cent of the shares, or by purchasing the hotel itself from the SPV.
A prerequisite for the establishment of a public limited company (A/S) or private limited company (ApS) is formal registration with the Danish Business Authority and the raising of equity capital at a minimum of 400,000 kroner and 40,000 kroner respectively.
i Recent (pre-pandemic) acquisitions
In November 2019, the Swedish hotel investment company Midstar Hotels purchased Admiral Hotel in Copenhagen from CAH Holding A/S's subsidiary company (SPV), CAH A/S, for around 1–1.5 billion kroner.
In October 2019, Midstar Hotels AB also purchased Marienlyst Strandhotel from Artha Holding A/S' subsidiary (SPV), Artha Marienlyst A/S.
In January 2019, Deutsche Hospitality purchased the majority of the shares in Zleep Hotels A/S. Zleep Hotels A/S owns 10 hotels in Denmark via its subsidiaries.
Also in January 2019, Pareto Securities purchased a hotel project near Kastrup Airport from Skanska A/S for 670 million kroner.
In late 2018/start of 2019, Pensiondanmark purchased, via a subsidiary, hotel properties in Kolding from Comwell A/S for 475 million kroner.
Business lease agreements concerning hotels are regulated by the Danish Business Lease Act.
Lease agreements concerning hotel properties represent a unique type of lease agreement as various clauses differ from standard business lease agreements, such as those concerning office spaces.
The determination of rent, the state in which the premises (the hotel) shall be surrendered at the end of the lease, and the fact that inventory is most commonly rented are typical terms that differ from standard lease agreements.
The market rent in Denmark is typically determined by multiplying rent per square metre by the number of square metres. The rent per square metre is negotiated by the landlord and the tenant and will be determined by several factors, such as the general terms in the contract and, crucially, the location of the premises.
Regarding hotels, several factors in addition to the location of the premises, such as the revenue of the hotel, often combined with a square metre price or a fixed price per room, also apply.
Typically, it is agreed that premises should be surrendered in the same state as on the takeover date.
Dealing with lease agreements concerning hotels, however, it is typical that the hotel shall be surrendered well maintained and ready for reletting.
Another typical term in hotel lease agreements is one governing rented inventory and chattels. These are often required to be surrendered in a well-maintained condition, ready for reletting.
Pursuant to the Danish Business Lease Act, a landlord may impose an obligation on its tenant stipulating that the tenant must keep the hotel open and in good operation to the extent customary.
A landlord is entitled to terminate the lease agreement where the tenant fails to comply with this obligation.
Intellectual property and branding
IP rights issues in Denmark pertaining to the hotel industry are mainly related to the protection available under trademark law, design rights law, copyright law as well as under the Danish Marketing Practices Act.16
i Trademark law
Besides the protection of a hotel's name, brand, logo, etc., as trademarks, the issue of 'trade dress' draws special attention for hotels – in particular chain hotels that invest heavily in the design and layout of the hotels. The CJEU ruled in the C-421/13 (Apple Inc v Deutsches Patent- und Markenamt) that a representation of the layout of a retail store (the representation of an Apple flagship store) may be registered as a trademark provided that the sign is capable of distinguishing the services of the applicant from those of other undertakings. According to the Court, this could be the case when the depicted layout departs significantly from the norm or customs of the economic sector concerned.17
However, this is not an easy test to meet, which is illustrated by the subsequent refusal of protection of the representation of the Apple flagship store among others in Germany, Sweden and Norway.18
Besides the above, if a trademark registration is obtained, it might be difficult to enforce given that the trademark only possesses distinctive character when it significantly departs from the norm or customs of the sector.
See also an example of a trademark registration for the design of the Burj Al Arab (EUTM Reg. No. 009818055).
The protection of a design can also be obtained pursuant to the Danish Design Act if the design is new and has individual character.19
A design shall be considered to have individual character if the overall impression it produces on the informed user differs from the overall impression produced on such a user by any design that has been made available to the public.
As regards the hotel industry, it is particularly relevant to focus on the concept of 'get-up'; which typically consists of store designs, hotel interior, lobbies, etc.
However, the Danish Design Act does not specify what constitutes 'get-up'.
The preparatory works of the Danish Design Act suggest that the above-mentioned examples are included. Furthermore, there are many examples from the European Union Intellectual Property Office of design registrations of store designs and room interior (e.g., RCD 317920-0013 where the hotel room interior was registered as a get-up).
The regulation of copyright protection is partially EU-harmonised.
It is possible to obtain copyright for 'architectural works' (e.g., buildings, rooms, etc.) if the work is original.
However, it is the general perception in the literature and Danish case law that 'architectural works' has a narrow scope of protection.
Yet this may conflict with EU case law (C-145/10, Painer) where the CJEU stated that it follows from the Infosoc Directive that copyright protection must be given a 'broad interpretation' and that nothing in the Infosoc Directive or other directives 'supports the view that the extent of such protection should depend on possible differences in the degree of creative freedom in the production of various categories of works.'
It is good practice in contracts with designers to address the issue of exercising the author's non-transferable personal rights (moral rights). These are non-transferable as a whole. However, a provision in the contract that clearly states the circumstances relating to the transfer may be upheld.
iv The Danish Marketing Practices Act
If a creation does not meet the requirement of originality, such creation may in some instances instead obtain protection against imitation, spoofing and the like under the Danish Marketing Practices Act. Article 3 of the Danish Marketing Practices Act is often invoked and cited by the courts together with the laws governing copyright, design and trademarks.
Article 3 stipulates that entrepreneurs must exercise good marketing practices that take into account the interests of consumers, traders and general societal interests.
One of the aims of this provision is to protect entrepreneurs from disloyal marketing practices, which may risk confusion, free-riding or some other form of exploitation of another's efforts, as well as infringement of another company's right to a name, design, etc.
It is a prerequisite to the applicability of the act that the marketing practice in question is related to the Danish market.
Data and hotel tech
i Data protection
The hotel industry is processing vast quantities of personal data, primarily on guests (e.g., name, gender, nationality and other passport-related data) and hotel owners are typically considered data controllers in a General Data Privacy Regulation (GDPR) context.
However, the legal structure of group companies and franchisor or franchisee cases should be examined closely to identify each of the participants' roles (i.e., whether they are acting as data controllers, potentially joined controllers or merely data processors).
Corresponding processor or joint controller agreements must be concluded once the roles of each of the participants have been identified.
It is the responsibility of the data controller to ensure that a legal basis exists when processing personal data.
Additionally, the industry is also subject to special (national) legislation, all of which provides for various legal bases on which processing can be based.
Examples of relevant legal bases within the hotel industry include:
- a legal obligation to which the controller is subject;
- the performance of a contract; or
- the controller's legitimate interest.
However, the processing of special categories of data is typically consent-based. Hotels must inform data subjects about the processing of their personal data using privacy notices.
Cross-border processing is another important GDPR consideration.
Hotel groups and franchisor or franchisee hotels often operate in multiple countries both inside and outside of the EEA, and data being exported between the parties – especially to parties outside the EEA – is something for the hotel industry to be aware of.
The GDPR restricts the transfer of personal data to third countries that are not recognised as secure third countries with an adequate level of data protection unless an individual's rights are protected by using methods such as EU Commission standard contractual clauses, binding corporate rules, or if one of a limited number of exceptions applies.
Further, where the transfer is between data controllers, such transfers also require a legal basis for the disclosure.
Data controllers may only process personal data for legitimate purposes and for no longer than necessary to fulfil these purposes.
An important task for data controllers is to make a distinction between collecting data that is 'need to have' from data that is merely 'nice to have' to comply with the GDPR's 'data minimization principle' and 'storage limitation principle'.
Processing personal data digitally requires adequately secured IT systems in line with the GDPR's 'integrity and confidentiality' principle.
In addition, the Danish Data Protection Authority (DPA)22 has set out special encryption requirements for data controllers when transmitting special categories of personal data and confidential personal data in emails via the internet.
Failing to secure encrypted transmission of these special categories of personal data is considered non-compliant and a potential personal data breach that should be reported.
The Danish DPA follows up on reported data breaches to establish whether or not the security breach in question could give rise to a fine.
If data controllers fail to ensure GDPR compliance, they risk facing hefty fines for non-compliance of up to €20 million, or up to 4 per cent of the global turnover of the preceding financial year.
In Denmark, enforcement of breach of data protection rules is subject to judicial control by the courts, and the Danish DPA does thus not have the authority to issue fines but must refer the matter to the prosecutor's office. The only fine so far sentenced by the courts was 100,000 kroner in a matter where the Danish DPA had recommended a fine of 1.5 million Danish kroner (which so far has been the highest fine recommended).
The case concerned a furniture company that had failed to comply with the storage limitation principle, by processing the personal data of approximately 385,000 persons held in their old ERP system without a retention policy in place (no data had ever been deleted in the system).23
Consumer legislation largely resembles the European Consumer Directive setting out certain requirements for the operators of e-booking platforms.26
As in other European jurisdictions, operators of booking platforms are required to provide the consumer with general information regarding the operator's business. Operators must also provide consumers with terms and conditions that are storable.27
The services offered by operators of booking platforms are required to clearly demonstrate prices when entering into an agreement with a consumer conducting a booking. Additionally, the operator needs to provide the consumer with technical guidance on the process of the purchase, as well as provide confirmation once the booking is complete.28
Contrary to the general rule in Danish law, consumers do not have the right to withdraw from a booking once it has been concluded.29
Hotel owners are subject to rules regarding the use of customers' email addresses for unsolicited marketing purposes; unsolicited communication requires prior consent.30
This applies to electronic marketing to both consumers and businesses. However, the use of email addresses obtained in the context of a sale by hotel owners is permitted because the customer is given the opportunity to refuse the use of their email addresses.
Franchising of hotels
In Denmark, there is no legal definition of a 'franchise' and the area is not regulated by one specific law, but rather by a number of different laws, including the Marketing Act, the Competition Act and the Product Liability Act.31
Owing to the piecemeal nature of franchise regulation in Denmark and the fact that franchise agreements are initially regulated by the contract, franchise agreements are often subject to lengthy and detailed negotiations.
Furthermore, according to Danish law, franchisees are not considered consumers, and a franchise relationship is therefore regarded as a business to business relationship.
The vulnerability that arises for the franchisee by not being regarded as a consumer further adds to the need for intense pre-emptive negotiations.
While franchise agreements in Denmark are not subject to regulation by one specific law, and while the franchisee is not subject to consumer protection, a 'catch-all' provision is found in the Danish Contracts Act, Section 36.32
Pursuant to this provision, the Court may disregard any provision in a given franchise agreement wholly or partially if it is deemed unreasonable. This 'catch-all' provision applies to franchise agreements, as well as any other type of contract in Denmark.
Hotel management agreements
As in most European countries, hotel management agreements (HMAs) are popular with hoteliers in Denmark because they allow hoteliers to minimise obligations and responsibilities associated with the daily management of hotel operations.
This is because HMAs, contrary to traditional business lease agreements, are not covered by the Danish Commercial Leases Act, which contains mandatory rules for the protection of both the tenant and the landlord.33
When a hotelier and a hotel operator enter into an HMA, considerable effort should be put into negotiation and contract writing, because although the parties have a shared vested interest in the overall success of the hotel, they may have different motivations owing to their contrasting income and risk profiles.
An example of such misalignment may be found in the fact that an operator's fees usually consist of a percentage of the hotel's sales while the hotelier also profits from an eventual sale of the hotel as a real estate asset.
Therefore, the operator may be focused on increasing sales, as opposed to profits, which may not align with the owner's strategy of increasing the value of the hotel as a real estate asset.34
Given that HMAs in Denmark are not covered by a specific regulation and that the parties, therefore, have no mandatory protective legislation to fall back on, an HMA should be subject to intense pre-emptive negotiation.
White label operators (i.e., third-party management) are frequently used in Denmark.
An example is Core Hospitality, which is a relatively new white label hotel operator.
Core Hospitality is a sister company to Zleep Hotels, but unlike Zleep Hotels, Core Hospitality is completely independent of brands and is thus able to offer hotel management services to other hotels as well.
Its first project was with the relatively new Marriott hotel branch, Moxy Hotels, which officially opened in Copenhagen in 2019.
The central and material financing source of real estate in Denmark is mortgage loans, which play an important part when financing real property.
A mortgage loan is a loan granted against a mortgage on real property by a mortgage bank.
The Danish mortgage system is unique as the mortgage loans are based on a principle of matching a loan and the underlying bonds funding it.
The annual interest payment is typically substantially lower in comparison to many other countries in Europe.
The financing structure in Denmark for acquiring an SPV owning a hotel is similar to other financing structures concerning real property in general.
The mortgage loan is combined with other types of security including change of control, negative pledge, subordination of other loans and limitations on dividend distribution as commercial properties may only be funded with 60 per cent of the value of the property. The rest of the purchase price will normally be funded by equity, or a bank facility with secondary rights to the mortgage loan.
Finally, the security package may well consist of a share pledge on the shares of the SPV owning the real estate, as well as a variety of assignment agreements, in which the operating company assigns certain (potential) claims and other receivables, including, but not limited to, intra-group shareholder loans and insurance agreements.
i Employment disputes
HR-related court proceedings are typically settled by the civil courts.
However, HR-related proceedings relating to a collective bargaining agreement are settled by the labour court, by an employment tribunal or by an industrial arbitration tribunal, depending on the issue.
Employees may act on their own behalf before the civil courts or be represented by counsel.
Employee claims are considered as a normal civil claim and a court fee is payable, dependent on the size of the claim as well as the risk for payment of legal costs to the counterpart (the employer).
Proceedings before the civil court are both time consuming and expensive.
ii Employment types
Danish law overall distinguishes between 'white collar employees' (also referred to as 'salaried employees' if certain requirements to the position are fulfilled, as specified below) and 'blue-collar employees', both of which are contrary to the category of 'self-employed' persons.
Part-time and fixed-term employees generally have the same status and rights as permanent full-time employees, although some exceptions exist.
Salaried employees working for more than an average of eight hours per week are covered by the Danish Salaried Employees Act that, among other things, provides protection against unfair dismissal after one year of employment and gives the right to a full salary during sickness (without limitation) and statutory notice periods.
In Denmark, the standard working time for a full-time employee is 37 hours per week, which excludes a half hour lunch break per day. An employer must be aware of the '48 hours rule', which stipulates that an employee cannot work more than an average of 48 hours per week over a four-month period.
Blue-collar employees who are covered by a collective bargaining agreement enjoy protection through the terms contained therein and will also be protected against unfair dismissal after nine months of employment.
Employees who are not covered by the Danish Salaried Employees Act or by a collective bargaining agreement are, therefore, not protected against unfair dismissal, except for the protection provided in the statutory Danish discrimination laws, or if the employee is considered as a specially protected employee.
iii Pay and benefits
There are no legal provisions setting a minimum wage for employees in Denmark.
However, collective bargaining agreements (if present) can set such minimum wages.
Employers typically offer a pension contribution. However, in Denmark there is no legal requirement to offer a contribution unless the requirement is stated in a collective bargaining agreement.
All employees are covered by the Danish Holiday Act and are entitled to 25 days per holiday year (with pay or holiday allowance if accrued).
All additional benefits are subject to negotiation unless set out in a collective bargaining agreement.
iv Termination of employment
As stated above, only salaried employees with one year seniority, or employees covered by a collective bargaining agreement that have nine months seniority, are protected against unfair dismissal and may claim compensation following such an event.
The size of the compensation depends on the employee's seniority and age.
However, all employees are protected by the Danish discrimination laws from the start of their employment, pursuant to which an employee cannot be dismissed on the basis of their sex, pregnancy or leave, age, disability, or on various other grounds listed in the acts.
In addition, there are certain protected categories of employees, such as shop stewards and working environment representatives, who enjoy extended employment protection in redundancy situations and a higher degree of protection against redundancy in general.
There is also a special procedure for mass redundancies.
An employee may challenge a unilateral termination at any time up to five years after (due to statutory limitation rules) and claim compensation payment. The option to reach amicable settlement is always available and recommended.
Dispute resolution and management
There is not a lot of case law in relation to hotels in Denmark, but some of the most prominent recent matters include the following.
In October 2017, the Danish High Court Western Division passed a judgment on whether Booking.com was liable for the fulfilment of a booking of a hotel room made by a guest through Booking.com at a Swedish farm hotel.35
The High Court ruled that Booking.com's terms and conditions had been accepted by the guest. The guest should have understood that he had made an agreement with the hotel and that Booking.com alone acted as intermediary, and that Booking.com by trying to solve the problem after arrival had not incurred a responsibility as landlord.
This ruling shows that booking platforms may not be regarded as a contracting party, with regards to the booking of a hotel room, provided that it is stated clearly in the booking platform's terms and conditions that it is only a facilitator for the agreement between the guest and the hotel.
In such cases, booking platforms are only to be considered as an intermediary, or as a provider of hotel rooms.
Another noteworthy case was the 2014 High Court Case regarding Bella Sky Hotel.36
To accommodate an increased demand from female guests, the hotel had reserved one of its floors for female guests only.
Following a complaint from a male guest, the Board of Equal Treatment found that Bella Sky Hotel did not have adequate grounds to exclude male guests from the floor. Bella Sky Hotel objected to this decision and the case was brought before the courts.
The High Court Eastern division ruled in favour of the Board of Equal Treatment and found (in a 2-1 ruling) that Bella Sky Hotel had failed to establish that the requirements of equal treatment had not been violated.
This ruling shows that while hoteliers generally are at liberty to accommodate the wishes and concerns of their guests, they remain bound by strict equal treatment regulations that can outweigh even safety concerns, if not adequately substantiated.
Before the pandemic the Danish hotel industry was booming, and a high number of foreign investors had recently entered the market. Several of these investors however suffered significantly as a consequence of the pandemic, leaving the market relatively open for financially strong investors. Foreign investors should pay particular attention to the potential restrictions pursuant to the Danish Acquisition of Real Estate Act and the Holiday Home Act when entering the Danish hotel market.
Regardless of whether the legal person or entity wishing to partake in the Danish hotel industry is foreign or local, they may do so in a number of different ways, some of which have been touched upon in this chapter:
- first, a legal entity may own hotel property typically through an SPV that, by virtue of its function as a subsidiary, is designed to isolate financial risk for the parent company. The most prevalent financing source of real estate in Denmark is mortgage loans;
- second, a lease agreement may be entered into. Commercial leases are governed by the Danish Business Lease Act. A lease agreement may be preferable in some cases as it contains mandatory rules for the protection of both the tenant and the landlord;
- third, a franchise agreement may under certain circumstances be preferable. However, it should be noted that the agreement itself represents the main legal foundation, and that the legislation on franchise agreements in Denmark is piecemeal in nature, offering no special protection for either party to the agreement. Franchise agreements should therefore be subject to detailed and thorough negotiations; and
- fourth, HMAs in Denmark are, like franchise agreements, not subject to one specific piece of legislation. Therefore, while they may be preferable to other types of agreements as they allow the hotelier to minimise obligations and responsibilities associated with the daily management of running a hotel, HMA contracts should be subject to thorough negotiation.
Regardless of how parties involve themselves with hotel operations or investments in Denmark, several legal areas must be taken into consideration, some of which have been considered in this chapter.
With regards to intellectual property rights pertaining to the hotel industry, these are, to a large extent, regulated by national legislation that supplements the European rules on intellectual property rights protection. In particular, the trade dress of hotels (i.e., the characteristics of the visual appearance of the hotel) in which significant investments have been made may be subject to not only trademark protection.
In relation to data and tech within the industry, it is of crucial importance to identify the data controllers involved in the operation of a hotel as data controllers are subject to strict regulation under both the GDPR and national legislation.
Finally, the Danish hotel industry is subject to strict employment regulation pursuant to which different types of workers may be entitled to different forms of protection. It is also important to note that workers may enjoy rights pursuant not only to legislation on employment, but also to the rules of collective bargaining agreements. Discrimination considerations also weigh particularly heavy in Denmark and may even outweigh some safety concerns.
As for the future of the Danish hotel industry, the aforementioned pre-pandemic boom is expected to continue once the pandemic hopefully soon comes to an end, but investors should display patience as the level of bookings is expected not to reach the pre-pandemic level until 2024. The industry thus currently has overcapacity as already pre pandemic it was predicted that the number of hotel rooms available would surpass the expected consumer demand for the first time since 2010.37 This is partly due to the high number of new hotels being constructed and partly due to the growth of private holiday rental sites such as Airbnb, and the situation has been further accelerated by the pandemic.
1 Søren Narv Pedersen is a partner, and Marie Grønlund, Mogens Dyhr Vestergaard and Claudia Vindbjærg Mortensen are associates at Bird & Bird Denmark.
2 Copenhagen Property Market Report; Sadolin Albæk, 2018, p. 60.
3 Colliers expect that the bookings will be approximately 90 per cent in 2021, 95 per cent in 2022 and 97 per cent in 2023 compared to 2019 – https://www.colliers.com/da-dk/nyheder/2020-06-16-hotelbranchen-efter-corona-puls">https://www.colliers.com/da-dk/nyheder/2020-06-16-hotelbranchen-
4 Statistics Denmark: https://www.dst.dk/da/Indberet/oplysningssider/overnat_hoteller.
5 As per 9 August 2021 59.5 per cent of the Danish population has completed their vaccination and 73.2 per cent have had their first jab.
6 The number of nights booked at Danish hotels in 2010 was approximately 9 million, while this number increased to approximately 15.5 million in 2017: Bookingplatforme, hoteller og forbrugere; The Danish Competition and Consumer Authority, February 2019, p. 11.
7 ibid, p. 19.
8 Articles from Finance and from HORESTA: https://finans.dk/erhverv/ECE11064709/hotelboom-kan-
afslutte-fire-fede-aar-for-branchen/?ctxref=ext and https://www.horesta.dk/vores-branche/hotelerhvervet/.
9 Bookingplatforme, hoteller og forbrugere; The Danish Competition and Consumer Authority, February 2019, p. 17.
10 The Foreign Investment Regulation Review, Fifth Edition, September 2017, p. 67.
12 Article from Real Estate Watch: https://ejendomswatch.dk/Ejendomsnyt/Raadgivere/article10284496.ece.
13 Due to the pandemic no more current statistics provide relevant trend data.
14 The Danish Acquisition of Real Estate Act No. 265 of 31 March 2014.
15 This applies to all real estate; not only residential property.
16 The Danish Marketing Practices Act No. 426 of 3 May 2017 with subsequent amendments.
17 Case C-421/13, paragraph 20.
18 See IR 1060321; see also case R 1135/2015-1 (KIKO S.p.A.).
19 The Danish Design Act No. 89 of 29 January of 2019.
20 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data and repealing Directive 95/46/EC (GDPR).
21 The Danish Data Protection Act No. 502 of 23 May 2018.
22 Datatilsynet in Danish.
23 The Danish legal system does not provide for administrative fines as prescribed in Article 83 of the GDPR. Therefore, the sanctioning process under Article 83 is instead initiated by the Danish DPA filing a police report. Hereafter, the Danish courts may impose a fine taking into account the Danish DPA's recommended level of fine.
24 The Danish Consumer Contracts Act No. 1457 of the 17 December 2013 with subsequent amendments.
25 The Danish E-Commerce Act No. 227 of 22 April 2002.
26 Directive 2011/83/EU.
27 The Danish Consumer Contracts Act 1457 of the 17 December 2013 § 8.
28 The Danish E-Commerce Act 227 of 22 April 2002, §§ 8 and 10.
29 The Danish Consumer Contracts Act 1457 of 17 December 2013 § 18, (2) No. 12.
30 The Danish Marketing Practices Act 426 of 3 May 2017 § 10.
31 The Danish Product Liability Act No. 261 of 20 March 2007 with subsequent amendments.
32 The Danish Contracts Act No. 193 of 2 March 2016.
33 The Danish Commercial Leases Act No. 1218 of 11 October 2018 with subsequent amendments.
34 Article from the hospitality university EHL: https://hospitalityinsights.ehl.edu/hotel-management-agreements.
35 UfR 2018.574V.
36 The High Court Eastern Division's judgment of 25 April 2014 in the matter 3rd section No. B-2983-12.
37 Pre-pandemic articles from Finance and from Danish Industry Analysis: https://finans.dk/erhverv/ECE11064709/hotelboom-kan-afslutte-fire-fede-aar-for-branchen/?ctxref=ext & http://danskbrancheanalyse.dk/hotelbranchen/hovedkonklusioner/.