Finland is suffering from a stubborn economic crisis that has managed to turn the former Nokia wonderland into the sick man of Northern Europe. At the same time, the number of Russian tourists, a key visiting demographic, has seen a significant decrease. Furthermore, pessimists fear that Finland might not see the flows from Russia it used to thanks to increased internet retailing in the latter country, which has a harmful impact on Finland as an attractive shopping destination, even if the rouble strengthens again in the future. So, where to turn to for new income to help the economy recover?
Partly because the lifeline of Finland’s flag carrier, Finnair, is connecting Asia to Europe via its hub at Helsinki Airport, a new project by Visit Finland has started targeting independently travelling visitors from China, Japan and South Korea, trying to increase the currently low numbers of them staying a few hours or days in Finland on their way further afield. The ongoing Stopover Finland project has been benchmarked to similar concepts in Singapore and, perhaps more relevantly, to Keflavík Airport, the hub of Icelandair near Reykjavík. Unlike Singapore, Keflavík is also a transfer-orientated airport strongly dominated by one key player, despite the ever increasing number of new airlines entering the booming Icelandic market.
Stopovers are actively marketed on the Icelandair website…
At the same time, Helsinki Airport is a peculiar one among equals in Europe due to the near total monopoly of Finnair in intercontinental connections. In 2014, Helsinki was also the biggest airport in Europe, excluding airports such as Moscow-Sheremetyevo that are not the only ones serving a certain city and airports primarily catering for seasonal holidaymakers such as Palma de Mallorca, which was not flown to by Emirates, Etihad and/or Qatar Airways, and neither is the airport served by Norwegian to North America or Asia, unlike Copenhagen, Oslo and Stockholm.
All the above naturally highlights the crucial importance of Finnair in the success of the project. Finnair is currently expanding its wide body fleet and has ambitious growth plans in Asia. As Finnair’s ticketing system already allows booking tickets with a stopover, the crucial question now is how well the option is marketed and what kind of activities wannabe stopover tourists will be offered.
Less than a decade ago, a relatively similar project called Gateway was organised. Afterwards, it was found that many of its recommendations were not followed up on, but another reason behind the failure was also the lack of a key player, ie Finnair, in the effort – which should not be the case in the ongoing one.
…but, while flights with multiple destinations, giving a stopover opportunity, are available on the Finnair website, finding them is not at all straightforward…
… although this has now changed and stopovers are being marketed on the Finnair website:
Geography creates a market in Iceland and Finland
Icelandair, which is something of a mirror-image airline to Finnair, benefiting from geography and connecting Europe to about a dozen North American destinations via Iceland, has already been marketing stopover packages for almost two generations. Unlike the plan in the Stopover Finland project, aiming at three key Asian markets, while also allowing stopover bookings from other source markets, the Icelandic benchmark targets both North American and European travellers, with 60% of stopover tourists coming from the US. It has been estimated that, in 2014, around 80,000 stopover stays were made in Iceland, leading to around 230,000 guest nights and close to €50 million revenue.
In the same year, an estimated 23,000 Chinese, Japanese and South Korean passengers stopped over in Finland on a trip to elsewhere in Europe, representing about half the stopover travellers from the whole of Asia. The public aim of the project is to increase the number of overnight stays by Asian tourists by 265,000 to 850,000 between 2013 and 2018 and generate €80 million a year more revenue than before the project. The growth is obviously coming from a relatively low base – these days a little over every 10th tourist arrival in Finland is from an Asian (including the Asian part of the Middle East) source market, and the whole continent still accounts for less than half as many arrivals as Russia alone.
Iceland gives you perhaps the most exotic corner of Europe, but what does Finland give you?
While making a stopover of a couple of hours or days in Finland is already possible and done by many thousands of visitors a year, more could be attracted through better marketing. The previous Gateway project mostly led to successful packages in the Nuuksio national park close to Helsinki and Lapland, and little else. Other bottlenecks for improved sales include the lack of offerings in major Asian languages, limited chances to buy packages online, scarce availability of packages through hotels, few strong incoming agencies and that many offers are not suitable for individual tourists. In December 2015, it was announced that the travel agency Matka-Vekka, part of Primera Travel Group, would be in charge of creating the service platform for stopover packages.
In different markets, different demographics are targeted for sales. The project has estimated that Chinese tourists are interested in products related to winter activities, the Japanese in nature, Helsinki and cruises, and South Koreans in urban tourism, aurora borealis and Santa Claus. For the two last-named countries, women are seen as a potential target demographic, while, in China, it is travellers from key cities such as Beijing, Hong Kong and Shanghai who have already seen the main sights in Europe and are looking for less famous attractions.
Even if it is second time lucky, risks should not be forgotten
Probably the biggest question marks about Visit Finland’s Stopover Finland project are the obvious ones – will the partial failure of the earlier Gateway project be avoided this time and why Finland as a stopover destination for Asian tourists has not been actively marketed before.
However, even if the marketing succeeds this time, industry players would do well to avoid expectations that are too high. While everybody is after heavily spending Chinese visitors, the steep decrease in revenue from Russian tourists shows the impact that currency exchange rate issues or economic hiccoughs can have, no matter how appealing the destination itself is. Other potential issues to consider include the short holidays Asians typically have (how many would spend two days of a week-long holiday in Helsinki instead of Paris or Vienna?), the fact that many bookings are done through intermediaries, the users of which might not know about the stopover concept and, in the long term, the negative population growth in Japan.
Nevertheless, the approximate €2 million cost of the Visit Finland project looks like an investment worth making. By 2018 or even later Helsinki will still not be a new Keflavík as far as its impact on stopover tourists in the overall tourism industry is concerned, but any improvement in the currently sadly under-utilised potential is a definite step in the right direction.