Germany Market Report May 2018 Visit Finland Marketing Representative Jyrki Oksanen
Semiannual Report GERMANY Winter season 2017-18 and outlook for summer 2018 CONTENTS Factors affecting the results of the winter season 2017-18 Outlook for the summer season 2018 Prospects for the autumn/winter season 2018-19 Trends and other relevant travel related topics Facts and figures - Market review data
Factors affecting the results of the winter season 2017-18 Reasons for the increase/decrease in overall outbound travelling from your market? Germany remains the main engine of EU economy, even if there is a lot of insecurities: possible trade war with the US, Brexit and lack of Government in Germany for months. This reflects also in travel especially as zero interest make savings lose value, German consumers invest in travel more than ever. The geopolitical situation remain challenging even if Egypt, Tunisia and Turkey are having a comeback the security situation remain challenging around the Eastern Mediterranean resulting in overtourism in Western European classic destinations like Venice or Mallorca. For the Nordics this results in higher demand. For Iceland the boom is over as prices soar and customer experience suck. For Finland the past season was steady double figure growth in main destination Lapland with new scheduled and charter routes installed and planned. Also we see more potential and demand south of Lapland as long as similar activities like Husky Safaris can be experienced. The new all year product group Air & Sea holidays is picking up and needs attention.
Factors affecting the results of the winter season 2017-18 Reasons for the increase/decrease in travelling to Finland? For winter the volume growth is steady. We had Kuusamo as a new direct Lufthansa destination from Frankfurt and Finnair increased their capacity on domestic routes remarkably. We expect the demand to remain high with potential to grow. Finland s image as a travel destination benefit from the Nordic trend and the more well known destinations Sweden and Norway. In the winter we have less demand for Central Finland and try to lift especially Vuokatti and the next poatential destination south of Lapland to increase awareness. There is positive development and changes in distribution on the German market with all main tour operators increasing production and sales. Many actions to train travel agents in the destination and on the market area have been done to increase sales. There were also negative changes in accessibility such as end of the Air Berlin service. However Finnair has increased with several new frequencies. Also a new airline EasyJet has entered Finland on Berlin-Helsinki route. New charter operations have also been started during the season and the Frankfurt-Kuusamo route was installed on 23 rd December 2017.
Factors affecting the results of the winter season 2017-18 Reasons for the increase/decrease in travelling to Finland? Product that has been attractive is weekstay. Maybe also due to lack of hotel capacity the offer is pretty much weekstay at a hotel/apartment with the pre booked main activities. Next to the classic Lapland holiday, skiing and winter sports are gaining in popularity. Longer tours like Husky tours, Ski touring or even snow shoe trekking are also increasing. Regions that have been attractive are Lapland, Lapland and Lapland in the winter time. Led by Northern Lights the snow secure Winter Wonderland offers a wide variety of unique elements that we can claim. Campaigns, joint promotions results were positive in increased volume of sales and yield at different airline-based or tour operator run campaigns with Finnair, Germania, Lufthansa, Fly & Car, ViaNova and Hotelplan. Campaigns could be realized due to an active participation of destinations in question.
Outlook for the summer season 2018 The overall outlook of travelling to Finland for the coming summer? German Market outlook remains positive as the country's economy keeps growing at high level, Finnish travel industry has activated sales channels to offer and promote products from Finland. What makes us confident about our positive development is the fact that Finnish destinations often have selected Germany as main market. The added marketing and sales all work for the positive development. New summer products include themed touring packages. Finnish Resort Hotels gain momentum in Germany as tour operators look for week stays at suitable accommodations. Also at the Finland Product Manual the most visited products in April May haven been long biking holidays. Food themed products have higher demand than there is offer as well as the classic lack of cottages during the season.
Outlook for the summer season 2018 The overall outlook of travelling to Finland for the coming summer? We think the Coast with Archipelago and Helsinki will continue with positive growth and we expect also the Lake Area to grow where attractive products for the international markets have been developed. Football World Championships is affecting travel in June, but for once it could also benefit Finnish Travel Trade even if Germany plays first rounds behind Moscow. Nordic trend remains on the market added with safety and balanced political situation. This will benefit the Nordics as one of the safest regions to travel in the world. The main product groups being touring, short holidays and Villas and resort holidays we attract several segments: families, DINKs, Whoppers. All who are looking for a fresh alternative for their holidays can find their holiday in Finland from trendy Helsinki to the quietness of a wilderness cottage in Lapland.
Outlook for the summer season 2018 Ad hoc marketing opportunities Ad hoc brings challenges in travel. If ad hoc means ill planned hasty campaigns you might want to consider twice before taking the unique super deal from the ad sales guy. If you have a solid sales network and unsold capacity price driven last minute actions can be relevant. I rather recommend this to be done via third parties as you might teach your clients and distribution channels to wait for cheaper rates. As we hardly have a last minute market, price is not much used to drive business in travel. You might want to think about other drivers like competitions, value deals when staying longer and directing demand to shoulder seasons.
Prospects for the autumn/winter season 2018-19 The overall outlook of travelling to Finland? What trends should be considered in product development to increase the demand in the autumn/winter time? Digital availability and generally availability for individual travellers. Tourism Industry is the forerunner in platform economy. Platforms need products according to their standards. Now all the big platforms like Airbnb, Expedia, Tripadvisor are coming to experiences and activities. So it is not accommodation & transfers that make the business but you have to think about the experience from consumer perspective: easiness, fun and availability. If we bring these attributes to autumn and winter it is a lot accoplished. Which present target groups should be considered to increase the demand? The main product groups being touring, short holidays and Villas and resort holidays attract several segments: families, DINKs, Whoppers. Which new target groups should be considered to increase the demand? The developing of different niche should continue, be it education, sports or luxury travel the future comes from being better in several niches which create earned visibility at the market place and strengthen the travel brand of Finland.
Trends and other relevant travel related topics Trends Bleisure Travel is coming strong and can be defined as a result of changing work/ life attitudes making the barriers disappear between business and private life. Digitalization, globalization, mobility and attractive destinations influence this development. Experiences are the new luxury as luxury goods are something for the nouveau riche. This goes along with trend to live sustainably. Bigger brands want to became platforms for all travel services. Airlines, tour operators, OTAs, car rentals, hotels chains, Amazon. It seems all want to increase content and offer a full service to consumers. Ryanair is a good example: 43 million registered consumers. Revenues from flight only are not enough so next ancillary services experiences become the next billion dollar business area. New distribution channels Even at digital age the production remain peoples business, so without meeting and selling your products not much can happen. Did I mention availability? If you have no capacity to give with commission it might be a Don Quijote mission to sell via sales channels. Online channels Finland is not widely present at the OTAs. We have more than 500 OTAs linked to Amadeus inventory in Germany of which not many feature Finland beyond Helsinki. This is a great challenge to us.
Trends and other relevant travel related topics Competitors actions Nature is used by not only our direct competitors as main argument. So as we in Finland think relaxing in nature is something cool and unique, 200 countries say they have that too. Nature is not enough=everybody has nature everywhere. We might want to look at this from our customers perspective: how to make our USPs drive better business for us? So we go superlative cleanest air is the world or Europe's last Wilderness? This sort of promotion is not enough and you can not buy it. We have to inspire our clients to discover how they can benefit from these soft attributes. If we look at good competitor actions the focus seems to be pretty much in bookable products ideally combined in brand products with actionable USPs. If we take the typical hit product in Lapland you form a promise, a promise of exiting and fun winter holiday: Unique accommodation and experiences at Arctic Circle in Winter Wonderland! So you take Northern Lights, Sauna with ice hole, Husky tour, visiting a Sami reindeer farm, karaoke, Arctic Winter Fun with Snow and fun guaranteed: out of these elements you can create and communicate a wonderful inspiring sales pitch for any consumer. Add seasonal highlights like Christmas so you have variation. We just need this same special experience and some storification to match it to be successful with other products and regions.
Trends and other relevant travel related topics Free word Something else that you would like to say to the Finnish travel trade 1. Speech is the next digitalization step driven by Artificial Intelligence. Googe, Apple and Alexa are leading the way. You can already book trips and search information as traveller. Microsoft offers to test a free chatbot, which is easy to integrate to your channels https://azure.microsoft.com/ 2. All big brands drive automation and service suppliers like Finnair have a strong proposition like cheapest rate guaranteed which they successfully can link to additional services. This works for simple products like 48 hours trip to Helsinki. Now this makes Finnair tour operator and sales & marketing channel for accommodation, activities and more. 3. The disruption of mobility will be a dramatic change in travel industry. What can we do to change this into a opportunity? Kids are not getting driving licences any more. Cars drive by themselves. Sustainability of private (polluting) vehicles will be critically seen?
Germany Market review data
German overnights in Finland 2017 Year 2017: 623 000 (+15%) Winter (Nov-Apr): 235 500 (+1) Summer (May-Oct): 380 900 (+17%) 26% 37% 38 % 62 % 19% Helsinki and Lapland areas with majority of the registered overnights 5% 6% 4 % 2% 3% 6% 4% 3% 38% 2% 3% 2% Lakeland area?: summer cottages which are not registered in the statistics 4 3 % % 2 4% % 35% 3% 3 % 7 % 4% 1 % 5% 39% 3% 4% 1 % 2% Source: Visit Finland Statistics Service Rudolf, Statistics Finland
German overnights in Finland Seasonal overnights in 2017-2018 Finland Winter 2017 (Dec-Feb): 126 900 (+12%) Spring 2017 (Mar-May): 115 000 (+6%) Summer 2017 (Jun-Aug): 274 000 (+18%) Autumn 2017 (Sep-Nov): 104 000 (+20%) Winter 2018 (Dec-Feb): 135 651 (+7%) Coast & Archipelago Winter 2017: 19 500 (+23%) Spring 2017: 25 000 (+15%) Summer 2017: 56 500 (+15%) Autumn 2017: 24 600 (+20%) Winter 2018: 19 528 (+/-0%) Lapland Winter 2017: 58 700 (+13%) Spring 2017: 27 200 (+6%) Summer 2017: 66 700 (+22%) Autumn 2017: 15 600 (+20%) Winter 2018: 65 491 (+12%) Helsinki area Lakeland Winter 2017: 14 200 (+15%) Spring 2017: 16 600 (+7%) Summer 2017: 66 500 (+24%) Autumn 2017: 17 400 (+38%) Winter 2018: 13 155 (-7%) Winter 2017: 34 500 (+4%) Spring 2017: 46 200 (+2%) Summer 2017: 84 300 (+14%) Autumn 2017: 46 400 (+15%) Winter 2018: 37 477 (+9%) Source: Visit Finland Statistics Service Rudolf, Statistics Finland