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Industry Brief: Tourism

In many minds, Lapland is specifically associated with tourism. And it is no wonder as Lapland is the engine of Finnish tourism, both in terms of growth and recognition. International tourism, in particular, is growing strongly.

Facts

  • 3 million registered overnight stays (2018)
  • share of international overnight stays: 52%
  • 1.33 million air passengers (2018)
  • turnover of the tourism industry: EUR 630 million (2017); growth: 16%
  • the fastest growth in the program services sector
  • the goal is year-round sustainable tourism
  • major investment opportunities, including investments in accommodation capacity

Tourism is currently one of the fastest-growing industries in Lapland. In recent years, international travel in Lapland has grown faster than in the rest of the Nordic countries. According to Statistics Finland, international tourism grew by about 22 percent in 2017 and by 6 percent in 2018.

In 2018, a total of 3 million overnight stays were registered in Lapland, 3 percent more than in 2017. However, overnight stays from popular peer rental service Airbnb and more traditional private rental cabin accommodation are not included in this figure. Overall, Lapland’s accommodation capacity is over 100,000 beds.

The largest groups of tourists were the British, the Germans and the French, but the Asian market is growing significantly. The Chinese are the fifth largest tourist group in Lapland. The peak season of international tourism takes place during the winter and especially around the Christmas season, while the favorite months for domestic tourists in Lapland are March and April, and the fall season, especially September.

The economic and employment impact of tourism is increasing

The importance of tourism in the regional economy of Lapland is very significant, as the share of tourism in GDP was 5.7 percent, while Finland’s average was 2.5 percent.

The tourism sector consists of several different industries, such as accommodation, restaurants and program services. The development of this sector in Lapland has been on the upswing, as turnover in 2017 grew well by 15.5 percent, to EUR 630 million.

All industries of the tourism sector have been growing in recent years. Growth has been the fastest in the program service sector, where turnover grew by up to 23 percent and the amount of staff by 10 percent in 2017.

In 2017, Lapland accounted for over 4,000 man-years of work in the tourism sector, with up to 7,000 people taking into account the seasonal workforce. The availability of workers, especially for the winter peak season, is one of the challenges for growth in the industry. Tourism also employs many outside of the major tourist centers, for example, around the seven national parks of Lapland. Employment in the industry is projected to rise in the coming years as the tourist seasons grow longer and the demand increases.

The tourism business is positively reflected in many other industries in the region. According to Tourism Satellite accounts, tourists spend about five times the amount of euros they pay for their accommodation.

Travel increases traffic

In recent years, international tourists have been even more interested in traveling to Lapland. Passenger numbers at Lapland airports have increased over the past ten years, and in 2018 a record 1.33 million passengers passed through Lapland airports. The growth of international tourism has been accelerated, especially by the direct international routes opened for wintertime.

In spring 2018 Finavia, a state-owned aviation operator, announced that it will invest EUR 55 million in Rovaniemi, Kittilä and Ivalo airports. The goal of the investment is to enable to serve 2 million annual passengers at Lapland airports.

By rail, the annual passenger capacity of Lapland is 450,000 sleeping cars and one million seats, and the state-owned VR estimates that traffic will grow at an annual rate of almost 5%.

Lapland aims to develop year-round sustainable tourism

The attraction of Lapland is based on the unique Arctic nature. The air in Lapland is the cleanest in Europe, and in 2017, Finland was estimated to be the safest destination in the world. Tourism in Lapland is also expected to grow in the future, although climate change is expected to change tourism globally in the next few years. In addition to the allure of the Arctic nature, the success of the tourism industry in Lapland relies on decades of strong expertise and international trade.

Strong growth in demand has been reflected, in particular, in the program service sector, and many tourist areas have an increasing need for innovative tourism service companies. The accommodation capacity in many destinations is practically in full use during the winter peak season, and there is a growing demand for themed high-quality accommodation. The year-round capacity utilization rate has been relatively low but high winter sales have been compensating the quieter summer season. At the moment tourism companies are investing and heavily developing the summer season, and the results are already beginning to show.

Investing in tourism is not limited only to business investments in Lapland. The University of Lapland is the only university offering major tourism research in Finland, and the development of sustainable Arctic tourism is one of the strategic business goals of the region.