Christie & Co Shows How the Hotel Sector in Finland Recovered from the Pandemic: a Trilateral Perspective

HELSINKI - In its latest analysis of the Finnish hotel market, hotel real estate expert Christie & Co shed light on how Finland as a whole, its capital region and key provincial markets have fared in 2022 compared to 2019.

The number of tourists visiting Finland in 2022 was only 5.4% less than in 2019. The lack of Russian and Asian tourists was compensated by the increased share of visitors from Germany and the United Kingdom, which became the most tourist-sending nations. Sweden, France, and the USA complete the list of top-five feeder markets. The seasonality in 2022 repeated the trends of 2019, except for the poorer success at the beginning of the year, causing seven percentage points lower occupancy. Driven by the gradual resurgence of international travel, strong domestic demand, and rising inflation, the country-wide average room rate in 2022 (€106) has surpassed the 2019 level (€99), thus setting a new record.

Rapidly evolving power hub of Finland, the Helsinki Metropolitan Area, a cluster formed by Helsinki, Vantaa, and Espoo, has been an object of keen interest even before the pandemic. However, like so many other densely populated urban markets worldwide, it suffered from restrictions brought on by the pandemic. According to Christie & Co’s analysis, the HMA has arrived close to the 2019 level in average room rates (-€7), but significantly suffers from a lack of both Russian and Asian travellers, which generated every fifth hotel night pre-pandemic. This was reflected in the capital region’s occupancy rate, which is still 20 percentage points behind (52% in 2022 vs 72% in 2019). Vantaa’s hotel market is perhaps the least affected among the HMA municipalities, where revenue per available room is 20% below 2019 figures, whilst 32% and 37% behind in Helsinki and Espoo, respectively.

In key provincial markets, the overall picture is two-folded: occupancy-wise, it is still clearly behind (56% in 2022 vs 72% in 2019), but the average rate recovery has been promising, +13%! Rates have continuously increased since April last year, and the seasonality factor has been very similar to 2019. When it comes to room revenues, the most robust

performance was registered in Tampere (+15%), followed by Lappeenranta (+9%) and Rovaniemi (+5%). Turku was in the most challenging situation where room yield was -11%; despite a reasonable price increase, weakened demand dragged down the turnover.

It remains to be seen to what extent macroeconomic events, such as the ongoing war in Ukraine, the effect of inflation on travel demand, and the resurgence of Asian and Russian tourism, will impact Finnish destinations in the future. In general, we remain optimistic and believe that demand will slowly return and that the market’s recovery will continue during 2023. Kimmo Virtanen – Director Scandinavia and the Baltic States

Click here for the Report Hotel Market Snapshot Finland 2022".

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