Government predicts tourism demand will shrink 60% this year

May 6, 2020 at 2:03 PM

The tourism demand, this is the amount of money spent in Finland by domestic and foreign tourists, will undergo a strong contraction this year due to the coronavirus crisis. And it is very likely that it will not recover its pre-pandemic level until 2022.

This is the main conclusion of an assessment on the impact of Covid-19 in the tourism sector prepared by the Ministry of Economic Affairs and Employment in collaboration with Visit Finland, Statistics Finland and the Finnish Hospitality Association (MaRa ry).

According to official figures, tourism consumption in Finland was estimated at 16.1 billion euros in 2019, but a large part of that turnover evaporated in 2020.

The report predicts that, if the recovery in business begins in September, the total demand in the tourism sector will shrink by about 60% (about 9.8 billion euros) in 2020. But if the recovery is further delayed and does not start until December, the reduction will be about 70% (10.9 billion euros).

Huge decline in domestic demand

The consumption of touristic services is declining particularly among domestic tourist. Their demand is estimated to contract by 50–60% (4.5–5.1 billion euros), in 2020. Domestic tourism accounts for almost 55% of Finland's total tourism business, and thus supports the basic cash flow of many companies.

Also, the coronavirus crisis is cutting foreign tourism demand by more than 70% (or 3.5-3.9 billion euros). This is a significant share of Finland's service exports (16%) and makes tourism the third most important service export sector. Tourism exports have been growing strongly in recent years.

Foreign tourism accounts for about 15% of total tourism consumption.