Friday. 02.12.2022

Government warns: Finland's tourism recovery will take years

After four consecutive years of growth, the Covid-19 pandemic brought the sector to a halt in spring 2020.

Lapland By Juho Kuva Business Finland
A woman enjoys a sunbath in the middle of the winter in Lapland. Photo: Juho Kuva/Business Finland/file photo.

The economic crisis and border closures caused by the coronavirus pandemic have dealt a severe blow to the Finnish tourism sector when it was developing well, with increases in the number of companies, employees and turnover.

According to the Ministry of Economic Affairs and Employment, the turnover and staff numbers of companies in the tourism sector increased during 2015–2019. But after four consecutive years of growth, the Covid-19 pandemic brought the sector to a halt in spring 2020.

"According to estimates, the recovery of tourism will take a few years, with sustainability and security among Finland’s key assets in future," the ministry said in a press release.

These are the conclusions of the sector report on the tourism industry published by the Ministry of Economic Affairs and Employment on Wednesday 10 February. In 2019, the number of companies in the sector was about 29,000 and they employed directly about 119,000 persons. The total turnover of companies in the sector was 21 billion euros.

“The figures in the report describe the situation before the coronavirus pandemic and show that there is a demand for tourism in Finland. As we all know, the pandemic has had a dramatic impact on tourism, but Finland has several strengths in the sector. We are a safe country and we can also stand out due to our sustainability,” says Lea Marski, Sector Manager from the North Ostrobothnia ELY Centre, who compiled the report.

In 2019, passenger transport and its services had the largest turnover among the tourism industry groups, while food and beverage services were the largest employer. Over the past few years, the number of new companies in the tourism sector has increased moderately.

Tourism sector accounts for about 2.7% of Finland’s GDP. "Tourism supports the development of regions, especially outside growth centres, thereby strengthening a balanced regional structure," the government says in its assessment.

The pandemic

In spring 2020 the tourism sector collapsed due to the coronavirus pandemic and the travel restrictions imposed to prevent its spread. The restrictions have successfully reduced the spread of the disease, but also driven the tourism sector, in particular, to serious financial difficulties.

The turnover of tourism companies has decreased dramatically and the number of people laid off has multiplied from the years before. The state has introduced different kinds of support instruments to address the harm caused by the coronavirus crisis.

It is estimated that the demand for tourism may recover from the pandemic in a few years’ time, but its impact on the industry may be extensive and long-lasting in many ways. It may take a long time before the financial situation of tourism companies improves, which may slow down investments for growth. The pandemic has also affected the consumer demand and behaviour of tourists, which should be taken into account in service production and its development.

According to the Ministry, Finland’s country image "as a safe and stable country provides a solid foundation for the development and growth of tourism industry after the pandemic." Government says Finland’s aim is still to achieve the most sustainable growth as a destination for tourism among the Nordic countries.

Government warns: Finland's tourism recovery will take years