Air Greenland is so pressured on investment capacity that the airline is now shelving plans to build a low-cost hotel in Ilulissat, even though there is a great need for more accommodation capacity in Greenland’s largest tourist town, Ilulissat.

Air Greenland is now changing tack and abandoning building a new large hotel in Ilulissat.

Air Greenland sadler

The project has been dropped by the board of directors of the airline Air Greenland, which is 100 percent owned by the Greenland Self-Government.

Air Greenland is now changing tack and abandoning building a new large hotel in Ilulissat.

Air Greenland sadlerAnnouncement

The project has been dropped by the board of directors of the airline Air Greenland, which is 100 percent owned by the Greenland Self-Government.

This is confirmed by the chairman of the board of directors of the Air Greenland group, Malik Hegelund Olsen.

Air Greenland already owns the world-renowned four-star Hotel Arctic in Ilulissat through its subsidiary Arctic Hospitality Corporation.

Although there is a great need for more accommodation capacity in Greenland, not least in Ilulissat, there are Malik Hegelund Olsen various reasons why Air Greenland has abandoned the construction of a new hotel.

Although there is a great need for more accommodation capacity in Greenland and not least Ilulissat.

– It is of course a shame that we have to drop the project. The main reason why we are doing it is that our investment capacity is currently under pressure. At the same time, we can see that there are other local operators who have plans to build hotels. So that is why we have chosen to stop the hotel project, he tells Sermitsiaq.

Construction prices have risen sharply

Malik Hegelund Olsen explains that in 2023 and 2024, Air Greenland has invested over 400 million kroner in connection with the new international airports in Nuuk and Ilulissat.

– It ranges from hangars to cargo facilities to staff housing and handling equipment. In addition, construction prices have increased sharply. And that means we are abandoning building a new hotel in Ilulissat, he says.

Greenland Airports expects to open the new international airport in Ilulissat in the second half of 2026. Air Greenland has invested in leasing a new Airbus 320neo aircraft, which will be deployed on the route between, among others, Copenhagen and Ilulissat from spring 2027. 

– This means that there is a need for more hotel capacity in Ilulissat, and that is precisely why we hope that local investors will prioritize the construction of more hotels in the town, states Malik Hegelund Olsen.

He points out that the airline has to prioritize investments, and that means there is no room to invest in a new hotel.

The group has had plans for a budget hotel in Greenland’s largest tourist town for several years. The new hotel was supposed to be ready for the opening of Greenland Airport’s new airport.

Hotel Arctic has just under 100 rooms, and Air Greenlands originally planned to build a low-cost hotel with around 160 double rooms at an estimated cost of between 150 and 200 million kroner.

Hotel Arctic’s director Morten Nielsen told Sermitsiaq in March 2023.

The hotel plans were launched to meet the high demand for hotel rooms in Ilulissat during the high season from May to September.

Great shortage of rooms in Ilulissat

An analysis from the Greenland Tourist Board, Visit Greenland, published in the fall of 2024, has indicated that there will be a major shortage of hotel rooms in Ilulissat.

Visit Greenland has looked at what the hotel capacity looks like when the number of tourists with the opening of the new airport is expected to increase significantly as a result of larger aircraft being able to fly directly to Ilulissat from, among other places, Denmark.

“In all tested scenarios, there will already be a major shortage of rooms in Ilulissat from 2026, especially in July and August.”

This is the conclusion of the analysis that Visit Greenland has made in collaboration with Explore North Greenland.

Malik Hegelund Olsen says that there are several private entrepreneurs who plan to build a hotel.

– Our decision to withdraw may bring others closer to realizing their plans. We would like to support that.

– I hope that when we announce in Sermitsiaq that we are dropping the construction of a new hotel, it will speed up other hotel projects. Because we need more hotel rooms in Ilulissat. If others can benefit from our withdrawal, it is good for everyone, says Air Greenland’s CEO Malik Hegelund Olsen.

Air Greenland is now changing tack and abandoning building a new large hotel in Ilulissat.

Air Greenland sadler

The project has been dropped by the board of directors of the airline Air Greenland, which is 100 percent owned by the Greenland Self-Government.

Air Greenland is now changing tack and abandoning building a new large hotel in Ilulissat.

Air Greenland sadlerAnnouncement

The project has been dropped by the board of directors of the airline Air Greenland, which is 100 percent owned by the Greenland Self-Government.

This is confirmed by the chairman of the board of directors of the Air Greenland group, Malik Hegelund Olsen.

Air Greenland already owns the world-renowned four-star Hotel Arctic in Ilulissat through its subsidiary Arctic Hospitality Corporation.

Although there is a great need for more accommodation capacity in Greenland, not least in Ilulissat, there are Malik Hegelund Olsen various reasons why Air Greenland has abandoned the construction of a new hotel.

Although there is a great need for more accommodation capacity in Greenland and not least Ilulissat.

– It is of course a shame that we have to drop the project. The main reason why we are doing it is that our investment capacity is currently under pressure. At the same time, we can see that there are other local operators who have plans to build hotels. So that is why we have chosen to stop the hotel project, he tells Sermitsiaq.

Construction prices have risen sharply

Malik Hegelund Olsen explains that in 2023 and 2024, Air Greenland has invested over 400 million kroner in connection with the new international airports in Nuuk and Ilulissat.

– It ranges from hangars to cargo facilities to staff housing and handling equipment. In addition, construction prices have increased sharply. And that means we are abandoning building a new hotel in Ilulissat, he says.

Greenland Airports expects to open the new international airport in Ilulissat in the second half of 2026. Air Greenland has invested in leasing a new Airbus 320neo aircraft, which will be deployed on the route between, among others, Copenhagen and Ilulissat from spring 2027. 

– This means that there is a need for more hotel capacity in Ilulissat, and that is precisely why we hope that local investors will prioritize the construction of more hotels in the town, states Malik Hegelund Olsen.

He points out that the airline has to prioritize investments, and that means there is no room to invest in a new hotel.

The group has had plans for a budget hotel in Greenland’s largest tourist town for several years. The new hotel was supposed to be ready for the opening of Greenland Airport’s new airport.

Hotel Arctic has just under 100 rooms, and Air Greenlands originally planned to build a low-cost hotel with around 160 double rooms at an estimated cost of between 150 and 200 million kroner.

Hotel Arctic’s director Morten Nielsen told Sermitsiaq in March 2023.

The hotel plans were launched to meet the high demand for hotel rooms in Ilulissat during the high season from May to September.

Great shortage of rooms in Ilulissat

An analysis from the Greenland Tourist Board, Visit Greenland, published in the fall of 2024, has indicated that there will be a major shortage of hotel rooms in Ilulissat.

Visit Greenland has looked at what the hotel capacity looks like when the number of tourists with the opening of the new airport is expected to increase significantly as a result of larger aircraft being able to fly directly to Ilulissat from, among other places, Denmark.

“In all tested scenarios, there will already be a major shortage of rooms in Ilulissat from 2026, especially in July and August.”

This is the conclusion of the analysis that Visit Greenland has made in collaboration with Explore North Greenland.

Malik Hegelund Olsen says that there are several private entrepreneurs who plan to build a hotel.

– Our decision to withdraw may bring others closer to realizing their plans. We would like to support that.

– I hope that when we announce in Sermitsiaq that we are dropping the construction of a new hotel, it will speed up other hotel projects. Because we need more hotel rooms in Ilulissat. If others can benefit from our withdrawal, it is good for everyone, says Air Greenland’s CEO Malik Hegelund Olsen.