Value of travel products grows in 2012 but most categories remain at pre-economic downturn levels
Overall value sales of travel products and services increased in 2012 thanks to increased demand and unit prices. Regardless of these positive developments, the sales of many categories continued to remain behind the pre-economic downturn level. For example, in travel retail unit prices increased in 2012 but it suffered from slow recovery of business travel sales, while in air travel sales continued to be hampered by discounting in unit prices. Discounting within travel accommodation ended and this helped to increase the sales of the category to the pre-economic downturn level. Car rental was the only other category that reached pre-economic downturn sales by 2012.
Online channel has an established position, mobile channel emerging
Online channel is the leader in the most significant categories of travel products and services including travel retail and air travel. Travel accommodation and car rental strengthened the sales in online channel notably during the review period, although it remains behind the leading categories. Most potential exists in smaller categories such as tourist attractions and other transport that still have low penetration of online sales. The importance of mobile channel is still low, but business travel retailers especially are investing in the channel and it is likely to become more established during the forecast period.
Proximity to Russia alleviates the impact of Eurozone crisis on travel products and services
The sales of travel products and services in Finland were boosted by increasing number of inbound tourists from Russia. This helped to balance the declining number of tourists from the worst-affected European markets such as Italy and Spain. Better transportation connections between Russia and Finland, easier visa application process online and increased knowledge of Finland as a holiday destination made Finland more frequently a choice of Russian middle-class tourists. The high growth of inbound tourists from Russia resulted in several travel and tourism developments taking place in Eastern Finland. In addition to traditional shopping trips Russians also showed an interest in new destinations such as skiing holidays in the north of Finland.
Tailored holidays in demand
When booking a holiday Finns increasingly look for characteristics that offer them experiences based on their personal interests. Finns are also willing to take part in planning their holidays, and this resulted in an increased demand for dynamic package holidays. Personalised tailored holidays that enable holidaymakers to express their personal interests are emerging as an important way of holidaying. Activity holidays from playing golf to scuba-diving are becoming more popular and travel retailers are required to offer such services in addition to transportation and accommodation. Finns increasingly also want to choose customised accommodation and are willing to pay more for special services.
Sales of travel products will increase towards the end of the forecast period
Although the economic outlook is expected to hinder the sales of travel and tourism products in Finland, they are not expected to become negative. This is mainly because Finns consider holidaying as a basic need and they are likely to reduce spending from other recreational categories. Secondly, sales of travel and tourism products within Finland will be boosted from continued high growth of inbound Russian tourists. The value growth will increase towards the end of the forecast period, when the economy is expected to recover. In case of continued economic depression, value growth could be threatened by price discounting similar to 2009-10.
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The Travel and Tourism in Finland market research report includes:
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