1. Introduction

Covid-19 pandemic was a shock to the tourism industry in the Nordic countries. In the years before the pandemic, the number of tourists had grown in all the Nordic countries and autonomous areas, in some cases so much that there were concerns over tourism and visible decay in most popular tourism destinations.

Karlsdóttir and Bogason, 2022.

The focus of the sector was on increasing the number of inbound tourists, and developing domestic tourism was mostly low on list of priorities. The closure of borders in the Nordic countries in early 2020 and in subsequent loss of inbound tourists sent ripples through the tourism sector. Suddenly, the domestic tourists overlooked earlier were the most important target group for the tourism enterprises and organisations. With the international traveling being severely restricted during the 2020 and 2021, the tourism enterprises and development organisations had to adapt their products and services to meet the needs of domestic travellers.

In this report, we examine the domestic tourism sector, its significance and future in the Nordic countries, autonomous areas and in selected border regions between the Nordic countries. This is the final report of the research project ‘Exploring Domestic Tourism in the Nordics’, initiated by the Nordic Council of Ministers. The project stems from the increased role of domestic tourism during the Covid-19 pandemic and aims to gather insights into the recent and future developments in the Nordic domestic travel markets. This is done by exploring the best practices of developing and promoting domestic tourism in the Nordic countries during the Covid-19 pandemic in years 2020-2021. The purpose is to identify and describe operating models developed during the crisis that would be useful for developing both domestic and inbound tourism in the Nordic countries in the longer run and to strengthen the Nordic tourism cooperation.

The study was conducted by a research group with researchers from different Nordic countries. The group was led by research manager Juho-Matti Paavola from Innolink Research Oy. Paavola and research consultant Ilkka Tiensuu formed the core team of this project, and they were responsible for coordination of the project, organisation of the final report and the writing process. They were assisted in different parts of the study by Jens Holm, Simo Saari, Inna Jauhiainen, Maria Levola, and Mikael Rautamo from Innolink Research. Additionally, the research team included country researchers from different Nordic countries. Oxford Research AB was responsible for the country cases for Denmark, Norway, Sweden, the Faroe Islands and Greenland with a team consisting of Thomas Westerberg, Roe Langaas, Louise Fabricius, Klaramaria Pollak, Maja von Beckerath and Sally Andersson. Eyrún Jenný Bjarnadóttir, from the Icelandic Tourism Research Centre, was responsible for the Iceland case.

The project was funded by the Nordic Council of Ministers and coordinated by the Ministry of Economic Affairs and Employment of Finland. After the tendering process, a steering group was formed to guide the work in this study. The steering group was chaired by Sini Markoff and Ida Honkanen from the Ministry of Economic Affairs and Employment, and its other members included project manager Guðný Hrafnkelsdóttir (05/22-12/22) and Director of Development Elías Bj. Gíslason (12/22-04/23) from the Icelandic Tourism Board and Linnea Johansson from the regional government of Åland. Invitation to join the steering group was sent to all Nordic countries and autonomous areas, but no representation outside Finland, Iceland and Åland was received. The steering group discussed and commented on research questions, materials, initial findings and final form of this report. The main authors of this report were responsible for the incorporation of the comments into the report and the views represented in this report are only theirs. We want to thank the steering group for invaluable support throughout the process.

1.1. Methods and sources

The basis for this project is mixed-methods approach, where both qualitative and quantitative research methods are utilised extensively. This allows the triangulation of data in order to ensure higher validity and reliability of the conclusions. The methods utilised included a desk study, where relevant existing literature about domestic tourism on the Nordic level is analysed. The desk research also included statistical analysis of key indicators in each Nordic country. In addition to the statistical analysis, the quantitative research methods of the project included an online survey directed to SMEs and other tourism sector stakeholders.

Data received through quantitative methods were enriched with qualitative interviews with representatives of the business support organisations, that can be non-profit, public, or for-profit resource organizations that serve tourism sector businesses and support their growth and success. In addition, country case studies in each Nordic country and autonomous areas were conducted by local researchers, who interviewed key stakeholder representatives and conducted a desk study of the national literature and statistic. Finally, a workshop was organised online to engage and gather views from a wider network of stakeholders.

The Nordic literature review and the contextual framework of the study

At the beginning of the project, we conducted a literature review to form a basis for the study and its design. There is an ample number of empirical studies that have been done in the past two years about the impact of Covid-19 pandemic on tourism. The literature reviewed focused mostly on the effects of the decline in international tourism, but there are several studies that examine, for example, the impact of the Covid-19 pandemic or quarantine decisions had on the domestic tourism travel flows,

Altuntas & Sahin Gok, 2021, Falk et al., 2022.

the effect of interventions made to increase domestic tourism during the pandemic,

Volgger et al., 2021.

the impact of domestic tourism on the economy during the Covid-19 pandemic

Wu et al., 2022.

or the effect of the pandemic on domestic tourism preferences and views.

Mkono et al., 2022; Wendt et al., 2022.

The empirical parts of these studies were mostly conducted with data gathered from outside Nordic countries.

The study by Wendt et al. (2022) is the exception to the rule since they examine domestic nature tourism in Iceland during the pandemic.

Review of the academic literature revealed some interesting theoretical insights. However, in this research project, our main aim was to find practical information about domestic tourism’s development in the Nordic countries and we were more interested in the Nordic perspective on the issue of domestic tourism and the Covid-19 pandemic.

There are a number of reports, policy papers and other grey literature found in each Nordic country that deal with domestic tourism nationally. These are included in the country reports. For the main report, we examined recent studies that covered all or most of the Nordic countries. Most of these wider reports have been mainly interested in inbound tourism, especially before the Covid-19 pandemic. For example, the Nordic Council of Minister’s report Nordic Tourism Policy Analysis offered insight into organisational frameworks and common thematic areas – digitalisation, sustainability and seasonality – in the Nordic countries and autonomous areas.

Árnadóttir, 2019.

Yet, the focus in the report is on inbound tourism and Nordic cooperation to promote it, and as such it was not very useful for our work, which is focused on domestic tourism.

After the Covid-19 pandemic domestic tourism, alongside inbound tourism, has been more prominent issue in the tourism-related literature covering several Nordic countries. In the State of the Nordic Region 2022 report, Karlsdóttir and Bogason

Karlsdóttir and Bogason, 2022.

make a statistics-based review about the impact of the pandemic on tourism, the decline of inbound tourism and the rise of domestic tourism, which inspired our statistical investigations. They also pointed out the possibility of a more transformative change in the tourism industry, a shift from high volume business model with inherent risk of overtourism towards a more moderate and less consuming mode of operation in the Nordics. Shorter traveling distances and increasing domestic tourism are part of this change.

This transformation and the role of domestic tourism in it are echoed in other recent reports examining the Arctic area. Arctic Tourism in Times of Change,

Jóhannesson et al., 2022.

a report issued by the Nordic Council of Ministers, calls for not only restarting or recovering tourism but also for reconsidering tourism in order to make it more sustainable by focusing on individualised services for smaller groups and on the domestic market. In the future, the report envisions normative tourism in the arctic, increased interest in nature-based tourism and an increased role for local, regional and domestic tourism in the industry.

In addition, the Ethical Tourism Recovery in Arctic Communities research programme – a collaboration between the University of the Highland and Islands, the University of Lapland and Karelia University of Applied Sciences – provides practical research-based tools for tourism entrepreneurs to develop more sustainable business models. In their survey-based study and strategy for ethical tourism recovery, an ‘increased focus on domestic tourism was identified as a potential pathway towards responsible and ethical tourism, with a focus on nature and cultural tourism’.

Macaulay et al., 2022, p. 5.

Another report looking into sustainable tourism development is Nordregio’s project Planning for sustainable tourism in the Nordic region.

Bogason et al., 2020.

It focuses on exploring regional tourism development plans which are written before the pandemic. Hence, domestic tourism is less visible in the report, but the report still provided important insights into the economic significance of tourism, the collaboration and organisation of tourism development, and sustainability concerns in the Nordic countries.

Looking at the recent literature, we can summarise that there is a lack of comparative information about the domestic tourism in the Nordic countries in general and especially a need for more information about domestic tourism target groups, behaviour and how the Covid-19 pandemic affected the development and future outlook of domestic tourism in the Nordics. In this report, we aim to provide practical insights into the domestic tourism in the Nordic countries and how to develop it in the future. Yet, earlier research into the issue provides a contextual framework and starting point for our exploration. We will be examining domestic tourism in the time of a (possible)

There is some debate amongst the research community and tourism industry about the magnitude and timeframe of the transformation, see e.g. Mkono et al., 2022.

transformation of the industry and business models. Covid-19 served as a catalyst for change, but it was not the beginning nor the end of it.

Country reports

Five country reports were conducted in the autumn of 2022. They form the backbone of this study and were the main method of gathering the research material. The reports cover each Nordic country in detail. Additionally, country studies were conducted in autonomous areas.

The country reports were conducted by local research team members. A team consisting of Thomas Westerberg, Roe Langaas, Louise Fabricius, Klaramaria Pollak, Maja von Beckerath and Sally Andersson from Oxford Research AB were responsible for the country cases for Denmark, Norway, Sweden, the Faroe Islands and Greenland. Eyrún Jenný Bjarnadóttir, from the Icelandic Tourism Research Centre, was responsible for the Iceland case. Innolink Research Oy and a team consisting of Inna Jauhiainen and Ilkka Tiensuu conducted the Finnish country case and Mikael Rautamo the Åland case.

The country reports are based on a report template provided by the core team from Innolink Research in September 2022. The steering group also commented on the template before it was finalised. The country researchers then conducted desk research of literature and statistics and interviewed a minimum of three experts – and in some cases, several more – per country to answer the research questions posted in the template. The interviewees included representatives from the central government agency responsible for the development of domestic tourism, as well as representatives of national or regional business support organisations and destination management organisations (DMOs) and, in some cases, representatives from tourism enterprises. For the autonomous areas, a desk study and an interview with a representative of the main tourism development organisation per area were conducted. In total, 24 interviews were conducted for the country reports.

The initial findings and first drafts were presented to the steering group by the country researchers in a mid-way seminar in October 2022. The steering group and the core team from Innolink Research commented on the draft versions and then the country researchers made amendments to them. The finalised country reports were received in November 2022.

The country reports cover three main areas:

A general overview of domestic tourism in the country
This section aims to give an overview of the domestic tourism in the country – its size, share, significance and how domestic tourism has changed during Covid-19. A short section about same-day visitors is included. Additionally, this part also includes a short review of restrictions affecting tourism industry that were introduced during pandemic – including both restrictions in the borders and inside the country.
Additionally, this section includes subchapters about domestic tourism preferences and the future of tourism.
The main stakeholders and coordination of domestic tourism activities
This part explores the coordination and financing of domestic tourism activities in the country and maps the main stakeholders involved in developing domestic tourism.
Best practices
Each country researcher identified several concrete examples of good practices/programmes/activities/etc. that have been successfully used (or that are new and innovative approaches) in developing domestic tourism in the country in answer to the Covid-19-induced crisis. Then, in cooperation with the steering group, the core team chose two cases from each country for closer examination. Then the country researchers conducted a desk study and an interview with a case representative in order to fill out the description of the case, the activities included and the lessons learned. These cases are described in detail in the country reports.

The country reports are mainly used as source material in this final report. In some parts, especially in Chapter 2, we use direct excerpts from the country reports. Elsewhere information in country reports is used as research material and analysed together with other sources in this study. The full country reports are annexed to this main report, so for more detailed information about individual countries and autonomous areas, readers can refer to the original country reports.

The survey

In addition to the country cases, we conducted a survey directed at tourism companies and organisations in all the Nordic countries and autonomous areas. The main aim was to explore how the companies and the organisations working with companies in different Nordic countries see the potential and future of domestic tourism and what kind of support they need in order to better operate in the domestic tourism market. The survey was conducted from November 2022 to January 2023 and it received 480 responses. The most responses were collected from Iceland (150 responses), Sweden (137) and Finland (123). The number of responses were considerably lower from Denmark (33) and Norway (31). Two autonomous areas collected a few responses as well: Åland (4) and Greenland (2), but from Faroe Islands no responses was received.

The responses were collected via an open internet link that was distributed with the help of stakeholders in different countries and in social media groups. The survey link was shared in the countries’ tourism networks (for example, through the DMOs and business support organisations). The link was also distributed in social media through paid for marketing targeting tourism industry actors. Additionally, since the initial distribution gave low number of responses in some countries, additional responses were also collected from an internet panel where the survey was directed to people working in the tourism sector. The number of responses that came from the distributed link was 295. The number of responses collected from the internet survey panel as 185. In all countries expect Iceland the sample include both responses from distributed link and from the internet panel. In Iceland, all the responses were received from distributed link. We cross-checked the responses from panel and link for quality control and concluded that on most background variables and response distributions the two samples resemble each other. There were slight variations, but given the explorative nature of our research and that we were not looking for representative sample, no major quality issues were detected.

The most responses were from people working in private enterprises (72% of all the responses). Other types of enterprise and DMOs represented 11 per cent of the responses, and business support organisations were represented by five responses. Micro-sized companies formed the largest group of enterprises, since 50 per cent of responded enterprises had 0–9 employees. Additionally, 28 per cent of the companies had 10–49 employees and 11 per cent had 50–249 employees and 11 per cent 250 or more employees. Accommodation was the organisations’ main line of business (with a share of 37% of respondents). Serving food and beverages was the second most popular line of business, with a share of 22 per cent. Accommodation collected the most answers in the three countries with the most responses, but from Denmark, there were no answers from accommodation companies. Full information about response distributions is included in the appendix 1 of this report.

The focus of the survey was to map the needs of companies in regard to domestic tourism, emphasising an explorative approach; therefore, representative sampling was not the key priority while conducting the survey. In this report, we mostly examine the results of the survey in a more general fashion, giving insights into the issues related to domestic tourism and its development from the viewpoint of tourism enterprises. The viewpoint in the survey questions is that of an organisation, but we did not restrict the respondents by, for example, allowing only top management to respond the survey questions. The results should be viewed as the opinions of the collected sample of people working in the tourism industry, and they are not representative of the whole tourism industry. In particular, the low number of responses from Denmark, Norway and the autonomous areas have to be taken into account. Hence, we mostly refrain from doing country comparisons or examining differences between countries based solely on the survey results especially in cases where results of one country is clearly different from others. Instead, we highlight cases where the results of the survey are similar across the countries and other research material.

The workshop and interviews

In addition to the previously mentioned modules of the project, information was also gathered in numerous interviews and a stakeholder workshop. The workshop was held via Teams in October 2022 with around 16 participants representing various private enterprises, DMOs, business support organisations and government agencies from Denmark, Finland, Åland, Iceland and Sweden. The workshop mainly consisted of group sessions mapping the potential of domestic tourism in the Nordics and how to realise its potential. Questions discussed in the group sessions were:

Question 1: What is the potential of the domestic tourism in the Nordics in the future?
Question 2: What are the preferences of domestic tourists in the Nordics?
Question 3: How tourism sector can adapt to better serve domestic markets and what kind of support would tourism companies need?
Question 4: What information is needed about the domestic tourism market?
Question 5: Nordic perspective - Could we create ”Nordic domestic tourism”? What would this need?

In addition to the interviews conducted within the country reports, additional interviews were carried out in order to enrich the results of the survey and contextualise them. These interviews were conducted with 9 representatives of business support organisations in all Nordic countries. In addition, 2 people working on tourism within the border regions (the Öresund region and Tornedalen) were interviewed to shed light on the somewhat ambiguous role of domestic tourism in the areas where local populations regularly cross borders as part of their everyday lives.

Note on the definition of domestic tourist and domestic tourism

Definition of tourist and tourism is not straightforward. Especially in the context of domestic tourism, the definitions can be elusive and might vary in different sources. In this report, we mostly apply definitions recommended by United Nation’s World Tourism Organization. The WTO defines tourism through the concept of visitor:

“A visitor is a traveller taking a trip to a main destination outside his/her usual environment, for less than a year, for any main purpose (business, leisure or other personal purpose) other than to be employed by a resident entity in the country or place visited. These trips taken by visitors qualify as tourism trips. Tourism refers to the activity of visitors.”

UN Department of Economic and Social Affairs 2010a, p. 10.

Domestic visitor is a traveller who is on a tourism trip and is a resident travelling within the country of reference outside his/her usual environment where an individual conducts his/her regular life routines.

Ibid., p. 16.

Given this definition, the domestic tourism in autonomous areas is considered to include only residents of the area in question traveling withing the area’s borders.

In WTOs definition a tourist as a visitor whose trip includes an overnight stay. If a visitor does not stay overnight, the visitor is labelled a same-day visitor or excursionist. Tourists and same-day visitors can be either inbound or domestic.

Ibid. p. 10.

In this report this is reflected in that the most used data when examining the numbers of domestic tourists and comparing it to the number of inbound tourists is overnight data. This choice is partly driven by practicality: overnight data is by far the most available, comparable, and up-to-date data about tourism, both domestic and inbound, across the Nordic countries.

However, especially in the context of domestic tourism, same-day visitors constitute significant part of visitors. In WTOs definition, tourism as an activity includes all visitors. Hence, when examining the data about domestic tourism, especially its economic impact, both domestic tourists and domestic same-day visitors are included.

Ibid, p. 15.

Same-day visitors and their significance are examined in separate chapter of the report, but in general, when talking about domestic tourism, domestic tourists and domestic same-day visitors are included in the concept.

Additionally, the WTO definition domestic tourism includes activities of a resident visitor within the country of reference not only as part of a domestic tourism trip, but also as part of an outbound tourism trip.

UN Department of Economic and Social Affairs 2010a, p. 15.

Following this definition, Tourism Satellite Accounts (TSAs), the most comparable dataset about economic impact of tourism, in most Nordic countries include domestic share of outbound tourism in domestic tourism. In Finland, domestic share of outbound tourism is aggregated in TSA, but in other countries it is not.

In the Finland, domestic share of outbound trips formed approximately one fifth of total domestic tourism demand before Covid-19 pandemic. For more details, see the Finnish country case annexed to this report.

Additionally, overnight statistics are based on nationality of the traveller, hence aggregation between domestic tourists on outbound trips and domestic trips is not made. Given these limitations, our statistical overview includes both trips that are done completely within the visitor’s country of residence as well as domestic share of outbound trips.

In the case of domestic tourism and tourists, above mentioned definitions are applied in the statistics, but often not in practice. As WTO notes about the scope of domestic tourism, “the term “domestic” has different connotations in the context of tourism and the national accounts. In tourism, “domestic” retains its original marketing connotations, that is, it refers to the activities of resident visitors within the country of reference.”

UN Department of Economic and Social Affairs 2010a, p. 15.

It is evident that many of the literal sources, survey respondents and interviewed experts do not draw strict distinction between domestic tourists and domestic same-day visitors, when, for example, talking about measures to increase the number of domestic tourists. On the other hand, it can be assumed, that in many contexts the sources do not consider domestic share of outbound trips as domestic tourism, especially if it includes just using domestic travel agency to reserve the outbound trip and perhaps transportation to an airport. For example, when domestic tourism is discussed in the context of increasing sustainability of tourism industry, it implicitly includes the idea of replacing outbound trips with domestic trips. Increasing the domestic share of outbound trips does not easily fit in this picture.

Hence, outside the parts of the report that are based on statistical data, the concepts of domestic tourist and domestic tourism are mostly used in mixed manner, since that is how they are used in the source materials. What is included in domestic tourism is dependent on the context. For example, when we write about short term marketing directed to domestic tourists, same-day visitors are not excluded from these efforts, but they are rarely directed to domestic travellers on outbound trips. Domestic visitors on overnight trips within the country’s borders are often the most more sought-after target group, since they do have the largest individual economic impact. But especially at the level of individual tourism enterprises offering services to visitors, making distinctions between domestic tourist, domestic traveller on outbound trip (especially if the trip includes several overnights in the country of residence) or same-day visitor is often unfeasible and unpractical.

1.2. The structure of the report

The report is thematically divided into five main chapters in addition to the Chapter 1 which is this introduction. Chapter 2 gives an overview of domestic tourism in the Nordics before, during and after the Covid-19 pandemic. It is mostly based on statistical analysis but is enriched by findings from the interviews, survey and written sources. This concerns especially the situation of tourism in the post-pandemic times, where the statistical data is still scarce.

In Chapter 3 the focus shifts onto the different profiles and preferences of domestic tourists. These are examined both by going through the existing material on domestic tourism profiles in different Nordic countries and the views of domestic tourist preferences presented by the respondents of the survey. Also, the general patterns of behaviour that separate domestic tourists and inbound tourists are discussed.

Chapter 4 aims to identify domestic tourism development needs and the solutions found thus far. The section on development needs is mainly based on the results of the survey, while the solutions include both those mentioned in the survey and the best practices presented in the country reports. The chapter ends with an examination of two special themes: the development of domestic tourism in the Nordic autonomous areas and the special situation of tourism in the regions on the border of two or more Nordic countries.

Chapter 5 deals with the future of domestic tourism in the Nordics. It is based on the responses gathered in the survey, workshop and the interviews. First, the views of the future of domestic tourism in general are discussed, followed by discussion of the more specific treatment of pull factors and challenges of the domestic tourism in the Nordic countries.

In chapter 6, the findings of the study are summed up in conclusions. These include seven findings on how to support organisations operating in the domestic tourism market to realise the potential of domestic tourism.

In addition to this final report, the output of the project includes six country reports, and a report on the results of the survey conducted during the project. They are annexed to this report, providing more insights for those interested in more specific details. However, this final report can be read as an independent product without consulting the annexed reports.