Latest Christie & Co report analyses Finnish hotel sector

The Finnish Hotel Market Snapshot 2022 reveals the number of tourists that visited Finland last year was only 5.4% less than 2019 levels. The lack of Russian and Asian tourists was compensated by the increased share of visitors from Germany and the United Kingdom, which saw the most outbound tourists. Sweden, France, and the USA were also amongst the top-five feeder markets.

The seasonality in 2022 mirrored trends seen in 2019, excluding the beginning of the year, which resulted in a 7% drop in occupancy. However, the country-wide average room rate reached €106 in 2022, surpassing the 2019 level (€99), thus setting a new record. This was likely driven by the gradual resurgence of international travel, strong domestic demand, and rising inflation.

The Helsinki Metropolitan Area (HMA), a cluster formed by Helsinki, Vantaa, and Espoo, is considered a rapidly evolving power hub of Finland and has been an object of investor interest even prior to the pandemic. However, like so many other densely populated urban markets worldwide, the region was greatly impacted by restrictions brought on by the pandemic. According to Christie & Co’s analysis, in 2022 the average room rate in the HMA was just below 2019 levels (€-7), as the market suffered significantly from a lack of both Russian and Asian travellers, which generated a fifth of hotel occupancy pre-pandemic.

This was reflected in the capital region’s occupancy rate, which is still 20% lower than occupancy rates 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 being 32% and 37% behind in Helsinki and Espoo, respectively.

In key provincial markets, the overall picture is two-fold; occupancy remains clearly behind (56% in 2022 compared to 72% in 2019), but the average rate recovery has been promising at +13%. Rates have continuously increased since April last year, and the seasonality factor was 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 experienced the most challenging situation, with room yield down by -11%. Despite a reasonable price increase, weakened demand dragged down turnover.

It remains to be seen, the 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 have on Finnish hotel 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.

To read the full publication online, click here.

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Kimmo Virtanen, Director – Scandinavia and the Baltic States
M +358 (0) 40 358 1414 or E kimmo.virtanen@christie.com