Hotel Sodankylä Expansion and Internationalization Project

Project Summary:

After over 50 years of operation, the expansion of Hotel Sodankylä’s accommodation and restaurant facilities has been planned to better meet growing international demand and to enhance the international tourism potential and service offerings of the Sodankylä town center.


The Schedule for the Hotel Sodankylä Expansion Project Has Been Confirmed
A €13 Million Investment in Sodankylä’s Town Center Will Be Completed by Summer 2025

Since 2022, Peerâ Hotels & Cottages has been working on the expansion project for Hotel Sodankylä, and the financing and implementation schedule for the project have now been confirmed.

The project, initiated in 2022, faced delays as the original banking partner withdrew, citing uncertainties caused by the COVID-19 pandemic and the war in Ukraine. Given the global political situation, financial markets have been cautious about new projects in recent years, which has also affected the financing of new construction investments.

Now, the situation in the financial markets has improved, and preparatory work on the hotel expansion site resumed at the company’s own risk in August 2024. The project applied for EU investment support granted by the ELY Center, which was a prerequisite for the economic feasibility of such a large-scale project in Sodankylä. In late November 2024, the project received a positive funding decision, providing the necessary confirmation for the hotel expansion to move forward.

With financing secured, the company aims to complete the new hotel building by summer 2025.

The company’s CEO and entrepreneur, Hilla-Rina Palokari, is delighted with the decision:

“I took on the role of CEO in this company at the end of 2018. The expansion project was already being planned at the time, and after 2019 we began exploring the conditions necessary to move the project forward. Then the pandemic hit and completely upended our plans. At times, the circumstances truly tested our resolve, but perseverance is a family trait. Together with our current partners and team, we have worked for years toward this goal, and I can finally exhale a little, knowing that the project is now moving forward to completion.”

The VAT-inclusive budget for the expansion project is currently estimated at around €13 million. The approved investment grant covers 35% of the VAT-exempt costs of the investment. The project also includes internationalization-related development measures, with a subsidy share of 50%. Once the expansion is completed, the existing hotel building will also be renovated to match the standard of the new hotel section.

The construction project management is being handled by Insinööritoimisto Projektijohtajat Oy, led by construction engineer Kari-Antti Virkkula from Kemijärvi. Additionally, Vesa Palokari, chairman of the board of Oy Rova-Rest Ab and with decades of experience overseeing hotel construction across Finland, plays a key role in the implementation of the project.

The hotel expansion strengthens Sodankylä’s tourism growth and dynamic spirit of development.

The goal of the expansion project is to increase and better serve the growing accommodation demand in Sodankylä. There is a need for updated hotel services in the center of Sodankylä to cater to the increasing demand for business travel and to further develop this aspect in the future. At the same time, the development of Sodankylä’s international leisure tourism could take new strides forward.

“Sodankylä’s town center has the same potential for developing international tourism and the positive communal impact it brings, as other neighboring municipalities in Lapland. It has been a pleasure to witness the long-term efforts, as last winter we welcomed new purchasing power in the form of French tourist groups, thanks to the actions of our Peerâ team,” commented CEO Hilla-Rina Palokari. “One of the project’s goals is also to foster a positive spirit of development and growth in the town center of Sodankylä, in collaboration with the municipality of Sodankylä, our Peerâ family, and other industry stakeholders,” Palokari continues.

The expansion will more than double the number of rooms.


The hotel expansion will be located to the north of the current hotel, where the previous parking lot was, and will connect to the existing building through its façade. The expanded hotel’s new parking area will be located on the company-owned former “Veikkolan talo” plot. The expansion will add 75 new rooms, some of which will be superior rooms, bringing the total room count to 127. After the expansion, the hotel reception will move to the new section, which will also feature a bar, restaurant spaces, and meeting facilities. The fourth floor of the new section will house a new sauna and wellness area with rooftop terraces. A winter garden will be placed between the old and new hotel buildings.

The construction company behind the project has over 50 years of experience in the tourism industry

The founders of Peerâ Hotels & Cottages, operating under the business name Oy Rova-Rest Ab, Vesa & Raili Palokari, have been entrepreneurs in the hotel and restaurant industry for over 50 years and are currently serving on the company’s board. The family behind the company has extensive experience with the growth phases, management, and even the most challenging times of Finland’s largest private hotel chain. Today, the operational activities of the company are led by the founders’ youngest daughter, Hilla-Rina Palokari, whose goal is to expand the family hotel chain under a new brand.

The growing company currently has seven accommodation properties in Northern Finland: Hotel Sodankylä and Hotel Karhu in Sodankylä, Hotel Kajanus and Kartanohotelli Karolineburg in Kajaani, Budget Hotel Raahe in Raahe, and two cottage properties: Tietotunturi KeloVilla in Pyhätunturi and Peurasuvanto Cottages and Camping, located 50 km north of Sodankylä. The chain employs approximately 40 people year-round, and the revenue has already reached six million euros in 2024.

The word Peerâ is Inari Sámi and means “family.” With this name, the company owners aim to highlight their roots and, above all, the family values that are upheld at every level of their operations. “At Peerâ, we want to make chain accommodation less rigid and ensure that it’s always a homey and easy place to come to, whether you’re a guest or working at Peerâ,” says CEO Hilla-Rina Palokari.

The company was awarded the Great Place to Work recognition in spring 2024. In addition, Peerâ Hotels & Cottages donates €0.10 from every overnight stay to support Sámi languages and culture, as well as annually supporting local children’s and youth activities.

CONTACT INFORMATION:

Construction site contact:
Project Manager Kari-Antti Virkkula
kari-antti.virkkula@projektijohtajat.fi

Media contact:
CEO Hilla-Rina Palokari
hilla-rina.palokari@peerahotels.fi