Finnish tourism companies face another difficult year, marked by lost revenue due to the coronavirus restrictions.
According to an estimate from the Ministry of Economic Affairs and Employment, tourist spending in Finland will decrease by 40–50% in 2021. If demand starts to increase in late summer, total spending is estimated to shrink by around 40%, or more than 6 billion euros. If, however, demand starts to recover only in the winter season of 2021–2022, total spending will decrease by about 50%, or around 8 billion.
This official estimate of the development of tourism demand has been prepared by 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).
Tourism demand, or the amount of money spent by Finnish and foreign tourists in Finland, amounted to approximately 16.1 billion euros in 2019.
According to estimates, demand will not reach the level of 2019 before 2023. The recovery of tourism demand, particularly inbound and outbound tourism, will be significantly slower than the demand for domestic tourism.
"The tourism sector must also prepare for a scenario where demand will remain below the figures of 2019 for a longer period. Restrictions regarding travel may slow down the recovery of tourism," the document reads.
The coronavirus crisis will cut spending by foreign tourists by almost 80%, or between 3.8 and 4.2 billion euros, this year. This represents a significant proportion of Finland’s service exports, of which tourism accounted for 16% in previous years, making tourism the third most important sector of service exports.
Over the past few years, tourism exports have shown strong growth. Tourism exports refer to the money remaining in Finland from foreign tourist spending.
Finnish tourist spending in Finland on services related to foreign travel will decrease about 80%, or between 1.8 and 2 billion euros. Before the coronavirus crisis, travel abroad accounted for about 15% of the total travel and tourism demand, but it will drop to just 5% this year. This spending consists largely of services provided by domestic airline and shipping companies, and travel agencies.
Domestic tourism is estimated to decrease by 8–18% or roughly from 0.7 to 1.6 billion euros in 2021.
Before the crisis, domestic tourism accounted for nearly 55% of Finland’s total demand for tourism; this year the percentage will rise to 82–86%. Demand for domestic tourism supports the basic cash flow of many tourism companies and reacts quickly to the tightening and loosening of restrictions. 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 (between 2.7 and 3.1 billion) measured in euros.
Government says the estimates are based on the situation on 10 March 2021 and will be used to plan stimulus measures for the tourism sector.