Finland Times

Finnish government officials recently painted a glowing picture of the expansion of the tourism industry against the backdrop of an otherwise listless economy.

     However, observers close to the field said that the fallout from Ukraine issue and the tumble of Russian currency ruble have put a damper on the sector.

     Timo Lappi, head of the Finnish Hospitality Association MaRa, said that while end-of-year holiday reservations in Lapland are now the same as in 2013, thanks to a welcome increase in visitors from Asia and Europe. The situation has been far from satisfactory with respect to Finland's traditional and largest tourism source -- Russia.

     "In eastern and southern Finland, reservations (of Russian tourists) are down 15 percent. Statistics Finland estimates it may be as much as 30 percent in some cases," Lappi added.

     Lappi commented that overall, Russian overnight stays had dropped by 11.7 percent compared to 2013. He said that MaRa expected the reduction to settle at around 15 percent by the end of 2014.

    

The hospitality sector group doesn't see the situation improving in 2015 either, given that there is no end in sight to the situation in Ukraine and that the Russian economy is hurting from an unanticipated fall in crude oil prices and a dramatic deterioration of the ruble.

     Some analysts have estimated that during 2014 the ruble has depreciated by almost 50 percent against the U.S. dollar. All this has conspired to make foreign goods and services like travel increasingly expensive for Russian consumers.

     "We've also seen a change in Russian tourists. They are more everyday people and they are not as likely to spend on extras. So they are also not visiting restaurants or spending on activities like sledding," Lappi pointed out.

     He said that the ongoing deterioration of the situation in one of Finland's most important tourist markets had taken the sector by surprise.

     "We had previously anticipated growth of 10 percent for 2014 from this market. We have placed a lot of emphasis on marketing in Russia. There are many hotel projects under construction or in the planning stage in Helsinki that may be postponed because of the situation. So this has been a setback," Lappi said.

     Russian tourists have always made a beeline for Finland's magical landscapes in Lapland. However this year the northern region has seen visitor numbers plummet.

     Satu Luiro, Senior Tourism Advisor of the Lapland regional council said that overnight stays by Russian visitors were down 18 percent by the end of September.

     "The Christmas season has been difficult to forecast for this group. Many Russian tour operators have gone out of business and we need them to bring groups," Luiro explained.

     "There's also been a shift in Russian consumer behavior -- tourists are planning their own trips and it's a challenge for us to reach them. Consumption by Russian tourists is also down," she added.

     Luiro confirmed that the sector's ability to withstand the shock of the deep decline in visitors from across the eastern border rested on an uptick on tourists from other locations such as central Europe and Britain -- and brought in by direct charter flights from the continent.