Last year, 2017, was a exceptional year for tourism in Helsinki. The year was the busiest ever for airline traffic flying in and out of Helsinki Airport, and record-breaking numbers have also been released for overnight stays in the city itself. The purpose of this article is to present a closer analysis of the travel statistics for 2017, and we will also cast an eye on the first half of the present year. The statistical examination will also be connected to the topical debate about how to approach the constant growth of global tourism, and sustainable tourism in particular.
Increasing interest towards Finland
In global regional travel statistics, Europe is still the world’s most attractive destination for tourism. At country level, France is the most popular travel destination, while London tops the list of cities. However, Europe now holds a one-third share in worldwide tourism. Asia and especially China has grown rapidly as a travel destination in recent years. From a global perspective, Finland remains a relatively small player but interest towards it has increased around the world.
Part of this interest is related to Helsinki’s strategically excellent location on the flight routes from Europe to Asia. The flight statistics of Helsinki Airport support this fact. International traffic to and from Helsinki Airport increased by 11 per cent in 2017, and the total number of flights taken by passengers was the highest ever recorded. Of the 19 million passengers flying to and from Helsinki Airport in 2017, the majority were on international flights. The biggest increase, 21 per cent, was recorded in international transit travel. The statistics released by Finland’s national airport operator Finavia reveal that the strong growth at Helsinki Airport has also continued in the first months of 2018, and this growth is boosted by increasing numbers of international transit passengers.
More than 4 million overnights in Helsinki
An interesting point of comparison for these air traffic statistics is offered by accommodation statistics, which are usually the most often used indicators when regions, countries or cities are measured against each other in tourism research. Air traffic statistics do not offer information on the citizenships of travellers, and for this reason, additional sources of data are needed.
Information on overnight stays and citizenships are collected from all registered accommodation establishments. It has to be noted, however, that only a part of all tourists stay in registered accommodation establishments. Estonians staying in Helsinki are a typical example of a traveller demographic among whom only a small proportion of overnights are recorded in registered establishments (see Mustonen 2018b). The weakness of register-based statistics – such as the overnight statistics – is often related to a lack of comprehensiveness.
As with the development of air traffic, 2017 was also a record-breaking year in terms of the number of overnight stays. Registered overnights increased in Finland by about 8 per cent compared to 2016. Overnights by Finnish visitors increased by 4 per cent and foreign visitors by 17 per cent. A particularly strong increase of foreign visitors was seen in Lapland, 22 per cent compared to the previous year. However, the number of Finnish visitors in Lapland went down.
In Helsinki, the growth of overnight stays by Finnish visitors was almost as rapid (16 per cent) as with foreign visitors (18 per cent). The total increase of overnight stays in Helsinki was 17 per cent in 2017.
Foreign visitors generated 54 per cent of all overnight stays in Helsinki in 2017. The share of foreign visitors was the highest in June and August, when they accounted for almost two thirds of overnight stays. In Lapland, the situation was the opposite: most overnight stays by foreign visitors take place in the winter months. For example, in December 2017, Lapland had more overnights than Helsinki in any month of last year.
The number of registered overnight stays in Helsinki totalled 4.2 million in 2017. This was the first time that the number of overnights in Helsinki surpassed 4 million. The total number of registered overnight stays in all of Finland reached 22 million. Thus the share of Helsinki in all overnight stays in Finland amounted to 19 per cent. Among Finnish visitors, Helsinki’s share was 13 per cent, while 33 per cent of overnights by foreign visitors to Finland took place in Helsinki.
Countries of origin of visitors to Helsinki
Russian visitors have dominated accommodation statistics in recent years, whether we look at the statistics at the national level or only the overnight stays in Helsinki. Russians accounted for 12 per cent of all overnight stays in registered accommodation establishments in Finland in 2017. In Helsinki, the share was smaller, remaining at 9 per cent. The share of Russian visitors in Helsinki’s overnight statistics was at its highest in 2013, peaking at 18 per cent.
After plummeting drastically in 2014–2016, the number of Russian visitors in Helsinki is now back on upward trajectory. In 2017, visitor nights from all source markets increased. Apart from the revived demand from Russia, other trends worth noting are the steady growth of Japanese overnights and, of course, the skyrocketing rise of Chinese visitors witnessed in Helsinki’s accommodation establishments in the past couple of years. If the overnight stays by Japanese and Chinese visitors in Helsinki are put together, the total amount is greater than that of Russian visitors. It can be argued that the growing demand from Asian source markets – particularly China and Japan – has compensated for the flailing Russian tourism in Helsinki in recent years.
For all the discussion about the growth of Asian visitors in Helsinki, it must be acknowledged that there are actually no Asian countries among the five biggest source markets for overnight stays in Helsinki. Russia is joined in the top five by Germany, UK, USA and Sweden, and these five countries together form the solid base for foreign bednights in Helsinki. 38 per cent of all foreign overnight stays in Helsinki originated in these five source markets. Top ten countries accounted for 58 per cent of all foreign bednights. In other words, almost 40 per cent of registered foreign overnight stays were by visitors from countries not in the top ten, which can be considered a relatively large share.
The importance of the top countries for the total number of overnight stays is a useful indicator when we analyse the split between different source markets. From the perspective of economic sustainability, it is desirable that the share of an individual country should not grow too large. An over-representation of a single source market can even have negative impacts (Mustonen 2018c).
Tourism growth in Helsinki outpaced rival cities
Other Nordic capitals are often regarded as Helsinki’s competitors in the world tourism market. Notwithstanding, Chinese tourists, for example, often travel to several cities during one trip, and from this point of view, Helsinki, Tallinn, Stockholm, Copenhagen and Oslo also form parts of one and the same target market. Thus the cities simultaneously compete for the same tourists and benefit from one another’s success.
Compared to the above-mentioned competitors, the growth of foreign overnights in Helsinki was in a league of its own in 2017. In Stockholm, the increase was 8 per cent and in Reykjavik, 6 per cent. In Copenhagen and Tallinn, the growth of foreign overnight stays was slower: 4 and 2 per cent, respectively. In Oslo, foreign overnights actually decreased by 5 per cent compared to the previous year. Also in absolute figures, the growth in Helsinki overtook all of these competitors.
Stockholm was by far the biggest tourist destination among the cities in the Nordic area when measured in the total number of overnight stays. In 2017, the registered accommodation establishments in Stockholm recorded 9.4 million overnight stays. Copenhagen was second, with approximately eight million overnights. Helsinki has more foreign bednights than Oslo, while the total number of stays in Oslo was higher than in Helsinki. Among the cities in our comparison, Oslo had the second highest number of overnights by domestic visitors.
If we only look at the number of foreign overnight stays, Copenhagen tops the list with 5.4 million stays. In foreign bednights, both Reykjavik and Tallinn had higher figures than Helsinki. On closer inspection, Reykjavik and Tallinn offer interesting points of comparison for Helsinki. Tourism to both of these cities is heavily dependent on a small number of crucial source markets. Of all overnight stays in Reykjavik in 2017, 30 per cent were generated by visitors from the USA and 22 per cent from the UK. More than half of all foreign overnight stays in Reykjavik were thus tied to demand from two source markets. Similarly, the role of Finnish visitors in Tallinn is immensely important. In Stockholm, by contrast, the ‘sustainability indicators’ describing the importance of individual source markets to the tourist industry of a particular city were the lowest among the cities in our comparison. Helsinki came second after Stockholm, while Copenhagen and Oslo were significantly more dependent on their top five source markets, which represented about half of all foreign overnights in the Danish and Norwegian capitals in 2017.
Accommodation capacities and room occupancy rates
With the recent rapid growth of tourism in Helsinki, the accommodation capacity and its sufficiency have been much debated. In 2017, Helsinki had 10,919 rooms in total (or an average per month of 10,085) and the entire Helsinki Metropolitan Area had 15,218 (14,130). The room occupancy rate calculated for the whole year in all the accommodation establishments in Helsinki was 73 per cent. For comparison: the occupancy rate for Lapland was 46 per cent, and 52 per cent for all of Finland.
Room occupancy rates show a considerable degree of seasonal variation. For this reason, a month-by-month analysis is more fruitful than the year-round perspective. The room occupancy rates of accommodation establishments are highest in the summer. In June, August and September the monthly occupancy rates in Helsinki were over 80 per cent. Accommodation statistics do not yet allow us to examine shorter ‘micro-seasons’ such as exceptionally popular weekends when the capacity is temporarily in full use.
In summer months, room occupancy rates are very high not only in Helsinki but also in all other reference cities. The highest occupancy in 2017 was recorded in the accommodation establishments of Reykjavik and Copenhagen. According to Benchmarking Alliance (2018), even the lowest monthly occupancy rates in Reykjavik surpassed 70 per cent, and the highest were over 90 per cent. Copenhagen had monthly occupancy rates of over 80 per cent from May to October, while Stockholm had the lowest percentages, remaining under 80 in all months.
Alternative types of accommodation – such as Airbnb – have become increasingly popular worldwide in the past few years. They are revolutionising the tourism industry and have been a topic of much lively debate in the past year (e.g. Mustonen 2018d). On one hand, Airbnb and similar operators help to ease the pressure during times when traditional types of accommodation establishments are fully booked. On the other hand, it has been argued that they distort the competition and lead to an increase in housing prices in destinations where landlords prefer to rent their properties to tourists.
A maximum of 2,400 flats and 500 separate rooms were available through Airbnb in Helsinki in 2017. This peak figure was reached in August, according to AirDNA, a company that collects and releases figures about the use of Airbnb services. In other words, the total number of Airbnb rentals amounted to almost 3,000 in Helsinki last year (AirDNA 2018). These had monthly average occupancy rates of over 50 per cent throughout the year, peaking at nearly 80 per cent in August. While these figures are only approximate and indicative, it must be noted that Airbnb has brought with it a notable increase to Helsinki’s total accommodation capacity with several thousand additional beds per month.
It is of course impossible to estimate the exact effect of Airbnb activities on the occupancy rates of accommodation services in Helsinki. Nonetheless, there has been no observable decrease of room occupancy rates in registered accommodation establishments during the past years. On the contrary, the occupancy rates have actually slightly increased (although not very significantly). In the light of these statistics, it would seem that Helsinki’s accommodation establishments have been at least somewhat underused, excluding the busiest times. This is not to say, however, that the changes in the room occupancy rates of registered accommodation establishments can be automatically linked to the existence of Airbnb, unless at some point we notice considerable increases in Airbnb’s own occupancy rates.
2018 – a year of changes?
If the scope of our examination were limited to 2017, we could end our analysis by stating that tourism in Helsinki is thriving and the Finnish capital is fast catching its Nordic neighbours. The first half of 2018 looks somewhat different from the same period a year before. The growth has slowed down slightly. The growth in the total number of overnight stays turned negative in March, and this change is mainly explained by the decrease of domestic overnights. The number of overnights by Finnish visitors in Helsinki had stopped growing in January 2018, when it remained 4.5 per cent lower than a year before. The growth of domestic overnights remained negative throughout the spring months, until the number increased again in June.
Foreign overnight stays continued to break the previous year’s records up until May 2018. January and February had still seen double-digit growth percentages. The downward turn came in June, with a 4.3 per cent decrease in foreign overnights compared to the same month last year. In absolute terms, the number of foreign overnights in June 2018 remained very high – had the same figure been recorded a year earlier, it would still have represented a staggering growth. Thus, despite the drop, the number of overnight stays by foreign visitors in June 2018 is 11 per cent higher compared to the same month in 2016.
Taking into account the high growth percentages of 2017, the continued growth of foreign overnights in the first months of 2018 can be considered almost astonishing. Since the total number of overnight stays has decreased only modestly from last year’s record level, it can be stated that tourism in Helsinki remains extremely busy. One notable feature in the first half-year’s statistics is the situation in the competitor cities. In contrast to Helsinki, the number of overnights has continued to grow in Stockholm, Copenhagen and Oslo.
Much attention has been paid recently to the development of Chinese tourism in the Nordic area. This source market offers one explanation to why Helsinki is now (in the first summer months) following a different trajectory than the other capitals. The overnight stays by Chinese visitors have decreased in Helsinki all through the spring, with the single exception of February. A similar fall has not been observed in the competitor cities. At the same time, however, border-crossings by Chinese travellers have increased at Helsinki Airport. Judging by these double-digit growth percentages, it seems that more and more Chinese tourists continue their trip directly from Helsinki Airport to other cities.
Interestingly enough, the same observation holds true for Japanese tourists. Border-crossings have increased but the number of bednights has declined. At the same in Stockholm, for example, the number of overnight stays by Japanese visitors has grown since March 2018 – precisely the moment when the drop was observed in Helsinki’s statistics.
The upcoming months will be interesting for those who follow travel statistics. During the first half of 2018, many important source markets have lost ground in terms of the overnight indicators. This fall has been at least partly compensated by the rise of new source countries. From this perspective, tourism in Helsinki appears to rest on a solid foundation. We cannot yet draw long-reaching conclusions about the possible diversion of Asian tourist fluxes to other Nordic destinations merely on the basis of the first six months of this year. However, clear signs about such a phenomenon are visible. The task for a tourism researcher for the autumn is to examine possible reasons underlying these developments. At this juncture, hypotheses are too uncertain to put forward.
How to reconcile tourism targets and sustainable development?
International travel has grown around the world for decades (UNWTO 2018). Although part of this growth is generated by people who had travelled previously, new customer groups have also entered the global tourism market. An increasing number of people have the leisure to travel and can afford it. If major catastrophes are avoided, international travel will also keep on growing in the near future, whether we want it or not. In this sense, the tourism business is different from other industries: as a phenomenon, it is extremely difficult to control.
The global tourism market is undergoing something of a revolution. Uncertainty factors for the future and functionality of the business are created by the immense volumes of tourism, as well as the pressure brought by climate change or political changes and movements. At the same time, the fast evolution of technologies is likely to affect the tourism market in ways that we cannot yet even anticipate. This vast and partly uncontrollable conceptual network is also closely linked to the demand for increasing sustainability in travel and tourism development.
Sustainable tourism – formerly mainly a preoccupation of the academic community – has finally also begun to filter through to the mainstream debate. This is partly due to the negative effects of tourism becoming increasingly evident. We have witnessed this also in Helsinki. In our new tourism roadmap (City of Helsinki 2018a), a chapter has been consecrated to sustainable tourism, with attention paid to each of its three dimensions: ecological, socio-cultural and economic. Ensuring sustainable growth is also a key goal of the Helsinki City Strategy, and the tourism roadmap reflects this priority.
From an ecological perspective, the growth of international travel is a global challenge, not least because of traffic emissions. It is necessary to discuss how the strain caused by tourism is distributed across regions, since it is already a major problem for many destination areas in different parts of the world. It can be ecologically more responsible to aim to direct the focus of tourism to areas where the necessary infrastructure is already in place and well-developed. Emphasising individualistic tourism may prove to be the wrong choice from the viewpoint of sustainable development. However, it must also be noted that areas where the number of tourists is consistently multiple times larger than that of local residents face a worrying future on all the dimensions of sustainability.
The infrastructure of cities is often better developed than in tourism destinations relying on nature attractions. Nevertheless, tourism has also grown in many major metropolises to the extent that its negative effects have changed the attitudes of local residents. This is a dilemma because tourism is a lifeline for many cities. To ensure that it is also economically sustainable, cities must monitor its impact on the local economic structure. Too strong an emphasis on tourism can sap the vitality of other industries and lead to a one-sided economic structure. This does not seem to be currently a major risk for Helsinki but it may be an issue worth keeping in mind.
From a socio-cultural point of view, the key challenges are related to the local population. As stated in Helsinki’s tourism roadmap, the city must ensure that it remains an attractive environment to live and work in, despite growing numbers of tourists. In other words, we should make sure that the local residents would consider the growth of tourism as a positive thing also in the future. If negative attitudes towards tourism become prevalent, this is likely to affect the demand for tourism services and consequently the multiple benefits of tourism.
Being the world’s most functional city – as Helsinki has outlined its vision for the future in the City Strategy – would constitute a major competitive advantage also in terms of tourism and the international interest towards Helsinki. The strategy also states that Helsinki will invest in developing tourism and encourages all local stakeholders to present ideas that help enhance the attractiveness of the city (City of Helsinki 2018b). When a city is liveable and functional for its residents, it also works well for tourists. Moreover, any services or infrastructure projects that are created for tourists in the first place will also benefit the local residents.
Promotion of tourism means not only a drive to boost up the tourist numbers but also creating better preconditions for the travel industry and – more generally – the strengthening of the city’s international profile and protecting its interests abroad. An essential part of tourism development is controlling the growth of tourism as well as deliberate and goal-driven efforts to direct it. A balanced split between source markets is one of the central aims for Helsinki’s tourism authorities.
This dimension of sustainable tourism is monitored regularly, and – as stated above – the situation in Helsinki remains fairly stable in this regard.
We cannot have full control of tourism in the sense of being able to select what kind of people travel to Helsinki. However, marketing and coordination activities and strategic choices allow us to influence the course of tourism to a certain degree. The impact of various development measures may be more far-reaching than we would initially expect. Focussing on independent travellers, who spend a lot of money in the destination, may diminish the number of package tourists and affect the larger cash flows they collectively bring in, but this could be a positive development from an ecological point of view. Advantages and disadvantages must be weighed up case by case – but without losing sight of the larger picture.
Global trends and economic fluctuations are not easily influenced. Although the growth of travel appears to us now as a mainly positive phenomenon, the situation may change in the future. We will be in a good position if we have weighed up our options beforehand. On a global scale, the dilemma of sustainable tourism has not yet been solved – and may never be. Almost all cities and regions have set some goals for the growth of tourism, but such goals are not unproblematic. On one hand, there is a desire to increase the volume of tourism (and consequently the income and international renown brought by tourists), but on the other hand, ensuring sustainability would probably entail some restrictions to tourism. Brave decisions, when taken voluntarily, can be the most difficult ones.
Pekka Mustonen is Senior Researcher at the City of Helsinki Economic Development Division.
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