Estimate: Coronavirus pandemic to cut tourist spending by up to 50% in Finland this year
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 EUR 6 billion. If, however, demand starts to recover only in the winter season of 2021–2022, total spending will decrease by about 50%, or around EUR 8 billion.
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 an official estimate of the development of tourism demand. The estimate used figures from 2019 for purposes of comparison.
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 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.
Spending by international tourists to fall the most
The coronavirus crisis will cut spending by foreign tourists by almost 80%, or EUR 3.8–4.2 billion, 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 EUR 1.8–2 billion. 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 EUR 0.7–1.6 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 (EUR 2.7–3.1 billion) measured in euros.
Estimates reflect pandemic’s effects on travel and tourism in Finland as a whole
They do not provide for an assessment of regional recovery of tourism demand. The estimates of future development are based on international and national studies and evaluations of the effects of the coronavirus pandemic on the tourism sector. 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 10 March 2021 and will be updated regularly. The estimates will be used to plan stimulus measures for the tourism sector. The estimate published now concerns the years 2021–2022. On 22 February 2021, tourism operators published their assessment of the sector’s development in 2020. According to preliminary estimates, the coronavirus pandemic reduced tourist spending by more than 40% in Finland in 2020.
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.
Sanna Kyyrä, Chief Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 047 012
Katarina Wakonen, Manager, Research, Visit Finland, tel. +358 40 072 3088
Ossi Nurmi, Senior Statistician, Statistics Finland, tel. +358 295 512 984
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
Press release by the Ministry of Economic Affairs and Employment, 6 May 2020: Coronavirus pandemic to cause a 60–70% decrease in tourist spending in Finland in 2020
Press release by the Ministry of Economic Affairs and Employment, 22 February 2021: Estimate: Coronavirus pandemic reduced tourist spending by 40% in Finland in 2020