Updated estimate: Coronavirus pandemic shrinks tourist spending by 40% in Finland in 2020
Despite a significant increase in domestic travel and tourism in summer 2020 compared to previous estimates, the volume was not sufficient to fill the gap left by foreign tourists. The Finnish tourism sector relies heavily on the recovery of international tourism. Tourist spending will decrease by approximately round 40% in 2020.
The Ministry of Economic Affairs and Employment, in cooperation with Visit Finland, Statistics Finland, the Finnish Hospitality Association MaRa, and the Association of Finnish Travel Agents SMAL has prepared official estimates of the development of tourism demand. The estimates were published for the first time on 6 May 2020 and have now been updated. In May, it was estimated that spending would decrease by 60–70 per cent this year.
Tourism demand, or the amount of money spent by Finnish and foreign tourists in Finland, amounted to approximately EUR 16.1 billion in 2019. According to estimates, demand will not reach last year’s level before 2023.
International tourism demand represents the biggest decline measured in euros
The coronavirus crisis will cut the foreign tourism demand by almost 70 per cent, or EUR 3.3–3.5 billion. This represents a significant proportion of Finland’s service exports, of which tourism accounted for 16 per cent in previous years, making tourism the third most important sector of service exports. Over the past few years, tourism exports − the money remaining in Finland from foreign tourist spending − have shown strong growth.
Finnish tourist spending in Finland on services related to foreign travel is showing the biggest relative decrease: almost 70 per cent, or around EUR 1.7 billion. Before the coronavirus crisis, travel abroad accounted for about 15 per cent of the total travel and tourism demand, which consisted largely of services provided by domestic airline and shipping companies, and travel agencies. This year, travel abroad accounts for just 7 per cent.
Domestic tourism demand is estimated to fall by 20 per cent or roughly EUR 1.6–1.9 billion euros in 2020. Before the crisis, domestic tourism demand accounted for nearly 55 per cent of Finland's total demand for tourism; this year the percentage has risen to 75. Domestic tourism demand generates the basic cash flow in many tourism companies. Lack of work-related travel slows down the growth of domestic tourism demand.
Passenger transport, particularly air and sea travel, account for the biggest reduction in tourism demand (EUR -2.5 billion) expressed in euros.
Estimates help to plan stimulus measures for the tourism industry
The recovery of tourism demand, particularly inbound and outbound tourism, will be significantly slower than the demand for domestic tourism.
The estimates reflect the effects of the coronavirus outbreak on travel and tourism in Finland as a whole. They do not provide for an assessment regional recovery of tourism demand. The estimates of future development are based on international and national studies and evaluations of the effects of the corona pandemic on the tourism sector, and the sector’s development during and after the pandemic. The views have been proportioned to the figures provided in the Tourism Account produced by Statistics Finland and Visit Finland.
The estimates are based on the situation on 4 September 2020 and will be updated regularly. The estimates will be used to plan national stimulus measures for the tourism sector. The key objective of Finland’s tourism strategy is to strengthen sustainable growth and renewal of the tourism sector. The key growth indicator is the development of tourism demand, in other words tourist spending.
Tourism demand reflects the amount of money tourists spend on purchasing products and services during the year. The total demand for tourism includes the spending of both Finnish and foreign tourists in Finland.
Inquiries:
Sanna Kyyrä, Chief Specialist, Ministry of Economic Affairs and Employment, tel. +358 29 504 7012
Katarina Wakonen, Manager, Research, Visit Finland, tel. +358 40 072 3088
Ossi Nurmi, Senior Statistician, Statistics Finland, tel. +358 29 551 2984
Ari Peltoniemi, Chief Economist, Finnish Hospitality Association MaRa, tel. +358 44 750 4511
Heli Mäki-Fränti, Managing Director, Association of Finnish Travel Agents SMAL, tel. +358 40 575 1303