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According to Statistics Finland’s tourism statistics, overnight stays by international tourists in Finland increased by more than 10 per cent in the summer months of 2024 compared with the previous year. Although the growth in the number of tourists gives rise to some optimism in the hospitality real estate sector, more tourists are needed, especially in Helsinki, to improve the profitability of hotels.
“In the light of the statistics, the tourist season of the summer of 2024 in Finland, from June to August, was strong. According to Visitory’s report (Source: Tourism Boom in the Nordic countries: The Key Figures of Nordic Tourism in Summer 2024), the number of overnight stays in Helsinki grew by 14% from the previous summer, in addition to which Helsinki attracted more domestic tourists than ever before. In total, the number of international overnight stays registered in Finland in June–August 2024 was 12% higher than in the year before,” comments Retta Management’s real estate analyst Anton Takkavuori.
According to Statistics Finland’s latest data, the number of passengers at Finnish airports increased by 7% in January–November 2024 compared to the corresponding period in 2023. Although the recovery in air travel has continued steadily, we are still a long way from the figures for 2019, i.e. before the pandemic: in January–November 2024, passenger numbers were 26% lower than the corresponding figure for 2019.
Before the pandemic, Helsinki served as an important hub for air traffic between Europe and Asia. However, the closure of Russian airspace and the resulting longer flight routes have significantly affected the city’s competitive advantage. As a result, it will take time for the number of tourists arriving from Asia to return to the pre-pandemic levels.
Although the number of Asian tourists has started to grow slowly, the peak years of tourism remain a distant memory. These challenges highlight the need to develop new markets and diversify Finland’s tourism service range to attract tourists from other regions as well.
The supply of hotel rooms has increased significantly in the Helsinki Metropolitan Area in recent years. Statistics Finland’s data shows that the number of hotel rooms in Helsinki increased from around 10,000 in 2019 to around 13,000 in October 2024. Growth has also been seen in other large cities such as Turku and Tampere, where the supply of hotel rooms has increased compared to the level of 2019.
Currently, however, hotel construction has pretty much ground to a halt in the Helsinki metropolitan area. There are also only a few individual hotel projects underway in other major cities, suggesting a short-term slowdown in the growth of supply.
According to the City of Helsinki’s Business Division, the development of tourism is hampered, among other things, by the lack of an indoor event arena that meets international standards and the small number of large meeting facilities for more than 500 people. In particular, these factors limit the growth of conference travel, affecting the city’s competitiveness as an event destination.
The event industry has also faced other challenges such as the indirect effects of the Russian war. For example, large international world tours no longer include Russia on their list of destinations, and consequently, fewer artists also come to Finland, which is reflected in the tourism and event sector operations.
A good occupancy rate for a hotel is generally considered to be 60–70%, but this may vary by location, season and target group. In Helsinki, hotel occupancy rates have been increasing since the slump caused by the pandemic and are already approaching 60%.
In Helsinki, the average room price has remained relatively stable in relation to the 2019 level. The equation is challenging because cost inflation has eroded profitability at the same time. The post-pandemic growth in the revenue per available room (RevPAR) seen in recent years is largely due to the increase in occupancy rates, reflecting the recovery of tourism. In the largest cities in the provinces, RevPAR has in many cases risen above the pre-pandemic levels, or at least very close to them.
The number of direct scheduled flight connections to Rovaniemi has increased significantly in 2024, almost doubling from the level of 2023. This year, there are 41 direct scheduled flight connections to Rovaniemi, compared to 24 a year ago and only 11 the year before that. In addition, long-term investments in extending tourist seasons and increasing the region’s year-round draw are starting to pay off, boosting the region’s attractiveness as a tourist destination throughout the year.
The robustness of Lapland’s tourist season is evident in the region’s air traffic. In 2023, Rovaniemi overtook Oulu as the second busiest airport in Finland. Tourism in Lapland has already exceeded the records set before the Covid-19 pandemic. The Regional Council of Lapland has also predicted that the 2025 season will break records. The number of foreign tourists in Lapland recovered quickly after the pandemic and continues to grow strongly. During the last winter season, Lapland’s tourism industry proved its resilience.
The sector is moving in the right direction, but there is still a long way to go
Visit Finland has set its sights on international tourism to Finland reaching the 2019 levels in 2025. The number of overnight stays has increased, despite the fact that tourists from Russia — normally a major country of origin for travellers to Helsinki — are absent, and Asian tourism to Finland has yet to recover fully. At the same time, the increased accommodation capacity has brought its own challenges. The Finnish tourism industry is facing challenges, but the recovery and diversification of tourism are promising signs.
“Sustainable tourism is one of the biggest opportunities that allows Finland to stand out in international competition. In 2024, Helsinki reached the top position in the international index measuring the sustainability of tourist destinations. According to Visit Finland, the reduction of the carbon footprint, longer stays for tourists in Finland and a more even distribution of tourism throughout the year are key factors that support sustainable tourism,” notes Takkavuori.
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Anton TakkavuoriKiinteistöanalyytikkoRetta Managementanton.takkavuori@rettamanagement.fiPuh. 0400 853 528
* Figures based on data and publications of the Helsinki City Board’s Business Division, Business Finland, Visit Finland, Visitory and Statistics Finland