The Board’s Annual Report 2018
Norsk Reiseliv/Norwegian Tourism Partners, previously Forum for Reiseliv, is an independent industry association that was established in 2004. The purpose of the association is to strengthen the influence of the tourism industry and its position as a leading industry and create the basis so that Norway has a larger share of the international growth in tourism. Through our work, we will be the voice of tourism for the political environment, bureaucracy, media and society as well provide an active premise for sustainable development of Norway as a destination.
Norsk Reiseliv organizes 15 of the largest tourism companies and regions in Norway. These companies representing approximately 90 percent of the international tourism marketing and with 40,000 employees they have operations all over Norway. The spectrum ranges from air, sea and rail transport sectors through hotels and the largest tourism marketing regions and destinations. It comprises private tourism as well as the business travel sector.
Norsk Reiseliv is organised as an association, with member meetings as the decision-making body, while the board is responsible for the administrative side. The highest authority is the annual meeting.
Norsk Reiseliv aims to:
- Ensure sustainable growth in the tourism.
- Ensure the means for increased competitiveness in line with the other growth industries.
- Increase the attractiveness and demand for Norway as a destination.
- Increase Norwegian value creation and employment by facilitating profitable tourism throughout the year.
Our goal is be the most important premise setter in tourism by prioritising the work for sustainable tourism and working for a strengthening of targeted distribution and marketing communication of Norway as a destination. This will be done by developing and coordinating industry-oriented tourism research, working for increased resources for strengthening the attraction value and demand of Norway as a year-round destination as well as for better adaptation of technology development and digitisation in the tourism industry.
Norsk Reiseliv must not compete with public funding agencies, regional and destination companies within profiling, brand-building and operational marketing tasks. We must not operate as an employer organisation.
Tourism in Norway
Tourism in Norway is an important contributor to maintaining settlement and local value creation, and it is an industry that creates jobs all over the country with significant increases in taxable revenue and the integration of employees with different ethnic and social backgrounds.
Tourism has traditionally to a small extent been an integral part of the government’s industrial policy, where the framework conditions and the public instruments are not well adapted to the structure of the tourism industry, and at the same time, we are an industry which operates in a country with a high price and cost level and which competes in an international market. Profitability is still an important theme in tourism. While some regions and destinations have a good flow of visitors, other destinations and tourism products have low occupancy and are experiencing losses.
According to Statistics Norway, tourism in Norway employed 162,400 full-time equivalents in 2016, had a total tourist consumption of NOK 170 billion of which NOK 50 billion came from foreign visitors and a value creation of NOK 114 billion measured in gross product (4.2% of the gross national product). The goal of Norsk Reiseliv is that tourism in Norway will employ 210,000 full-time equivalents in 2025 and contribute to a tourist consumption of NOK 265 billion of which NOK 90 billion will derive from foreign visitors and create value NOK 182 billion in value.
Employees in the industry currently contribute about NOK 20 billion in total personal tax, employer’s social security contributions and national welfare contributions to the municipalities in Norway. Our goal is that this should increase to NOK 25 billion in 2025.
International and Norwegian overnight stays in Norway
Tourism in 2018 experienced a slight increase in the number of guest nights. According to statistikknett.no/SSB, Norway had 33.8 million registered guest nights in 2018, i.e. hotels, camping, lodges and hostels. This is an increase of 1.5 percent compared to 2017. Norwegian guest nights totalled 23.7 million guest nights, which is an increase of 1.4 percent, while there were 10.1 million foreign guest nights, which is an increase of 1.8 percent compared to 2017. For the regions in Norway, the greatest growth is in Western Norway with 3 percent and Eastern Norway with 2 percent.
The greatest growth came from USA with 144,000 guest nights increasing to 815,656 and from Germany with a growth of 104,961 guest nights to 1,830,027. In 2018, China which has had significant growth over the past 10 years ended up with a decline of 5.4 percent, totalling 450,827 guest nights, while Asia as a region declined 2.4 percent to 1,169,056 guest nights.
Southern Europe had an increase of 5.1 percent to 1,114,587 guest nights. Here, it was especially France and Italy which increased. Central Europe including Germany had an increase of 5.2 percent to 3,073,400 guest nights. The Nordic countries had a decline of 2.8 percent of the total number of guest nights from 2017 to 2,112,156, distributed by a 3.6 percent decline for Sweden and a 2.5 percent decline of Denmark.
Central Europe is the largest region for travellers to Norway with well 3.1 million guest nights, followed by the Nordic Region with 2.1 million guest nights, while Southern Europe and Asia are about the same size in the number of guest nights of just over 1.1 million each.
What characterises 2018 is a good winter season with good snow conditions, which is followed by a nice summer season with record heat in large parts of the country. Even with a good increase in the number of guest nights in the winter months of 6 percent, the challenge of tourism is further reinforced with the largest relative growth in the summer months by 2 percent. This is the problem for tourism in Norway, we must develop our products to also be attractive outside the high seasons, so that we can ensure more sustainable tourism and avoid overtourism as we have seen in some destinations during the high season.
If we look more closely at the figures, hotels had a growth of 1.9 percent, of which 0.8 percent was growth from abroad and 2.3 percent was growth from Norway. The markets that are singled out here are USA with an increase of 22.6 percent, then France with an increase of 10 percent and Italy with an increase of 8.0 percent. In particular, the British market for hotels failed with a decline of 14 percent, and Swedish, Danish, Dutch, Spanish and Chinese guest nights also experienced a decline in hotels compared to 2017. This may be because there has been a shift from staying in a hotel to camping from several of the markets, which is partly due to the nice weather and the cost level, as well as the fact that we have lost market shares to Sweden and Denmark in 2018.
According to Statistics Norway lodging at hotels increased by 3 percent to NOK 15.1 billion compared to 2017. The average price per room increased from NOK 946 to NOK 960 for the entire country. In 2018, there were more rooms available than in 2017, and even though overnight stays at the hotels increased, there was lower capacity utilisation of rooms for the entire year compared to 2017. This has contributed to the accommodation per available room being virtually unchanged from 2017, despite an increase in the average price per room.
In camping, we see an increase of 0.7 percent, where there is a decline from Norway of 0.8 percent while foreign guest nights increase by 3.7 percent. Germany and the Netherlands increase the most. Germany with an increase of 9.6 percent, which corresponds to 96,388 guest nights, and the Netherlands with an increase of 25,128 guest nights, which corresponds to 6.0 percent. Otherwise, there is a nice increase from Switzerland, Austria and Spain. The increase is largely due to car tourists from Europe to Norway. Norway and Denmark have the greatest decline. The largest contributor was the increase in RVs. This is related to the fact that the number of RVs has doubled in the last ten years. Compared with 2017, overnight stays in RVs increased by 23 percent.
In addition, it indicates that we have had a significant increase in overnight stays within Airbnb, as well with cabins and holiday homes that are booked through international booking companies which are not subject to reporting requirements.
Holidays and leisure traffic and business travel are growing, while meetings and international congresses have experienced a slight decline. This shows that business traffic is back after the crisis that arose as a result of the fall in oil prices and cutbacks in the business sector. At the same time, we see from the number of guest nights in meetings and international congresses has not benefited the positive development which the rest of the tourism industry has had from 2010 until today.
Growth from the European markets in 2018 is largely due to a continued weak Norwegian krone, which has resulted in the prices for travel to Norway not having increased in recent years, better accessibility from several direct routes, improved finances in several of our most important markets and that the Nordic countries are popular destinations. This, together with the fact that Norway’s travel destination has strengthened as a result of long-term market work.
In the last 10 years, Norway has seen a growth of just over 5 million guest nights, in which NOK 3 million came from Norway and NOK 2 million from abroad. In particular, Asia and the USA have seen considerable growth, with an increase of just over 550,000 guest nights from USA and 400,000 guest nights from China. This is a growth that is largely due to a weaker Norwegian krone from 2014, better accessibility through increased flight capacity and more direct flights. And that long-term international marketing work in the context of Innovation Norway and the Norwegian tourism industry has helped to increase interest in Norway as a travel destination.
The turnover from sold guest nights in Norway has increased by NOK 4 billion from 2013 to 2018. Almost all of this growth has been through Online Travel Agents (OTA), while the proportion of direct bookings to Norwegian tourism companies remains constant during the same period. It is a paradox in a period of growth in the number of guest nights to Norway that virtually all sales growth comes via international OTA, which, among other things, weakens customer contact, as well as the industry’s share of value creation and tax revenues to the municipalities.
Travel among Norwegians
According to Statistics Norway’s travel survey, Norwegians went on 27 million business and holiday trips in 2018, which is just over 4 million more than the year before. Domestic holiday travel showed strong growth, which contributed to this increase. The proportion of holiday trips amounted to just over 22.2 million, of which 15.7 million of these were holiday trips in Norway. 10 – 11 million domestic holiday trips were taken out annually during the ten previous years. A nice summer, the fact that it has become more and more expensive to go on holiday to many of our traditional holiday destinations abroad, as well as a weak Norwegian currency may have had an influence on the fact that more Norwegians took their holidays in their own country in 2018.
Norwegians took just over 6.5 million overseas holiday trips in 2018, which is about half a million fewer than in 2017. In 2018, one out of five went on business trips, and together, about five million such trips were taken. 68 percent of the business trips were made domestically.
Norwegians had 121 million overnight stays associated with the trips last year. This is 6.3 million more than the year before. The number of overnight stays abroad decreased, but a considerable increase in the number of overnight stays in Norway means that overnight stays increased overall.
Overall, the development for travel to and in Norway in 2018 seems to be somewhat better than in 2017, but in the past two years, we have seen a weaker development than for the record years 2014 to 2016 and a weaker development than Europe in general.
In 2018, Sweden had a growth in the total number of guest nights from abroad of 7 percent and Denmark a growth of 5 percent, while the figures for Norway showed a growth of only 1.8 percent. The reason for this growth is due to stronger economic growth internationally, better routes with planes, digitisation and new business models such as Airbnb the fact that it has become easier to obtain a visa.
Internationally, we surpassed 1.4 billion international holiday trips worldwide in 2018, which is a growth of ̊ 7 percent from 2017. This has taken place two years earlier in relation to previous forecasts from UNWTO. Norsk Reiseliv expects growth to continue and that we will exceed 2 billion international holiday trips by 2030. This is an expected growth of 5 percent a year.
Travel to Norway is somewhat below this at the moment, but the international trends indicate that we are still in favour of growth, and the interest in visiting Norway has increased considerably in recent years. This is shown by both Innovation Norway´s Tracker survey and word of mouth chats about Norway on the internet that is increasing from all over the world and where Germany is at the top. But everything here depends on the fact that we can compete in an increasingly tougher international travel market, that we have the products that tourists are demanding, can play with international tourism trends, and that the Norwegian krone still maintains a low level and that the tax and taxation policy do not weaken the competitiveness of Norwegian tourism products.
Our activities in 2018
In 2017, Norsk Reiseliv changed its name from Forum for Reiseliv to Norsk Reiseliv/Norwegian Tourism Partners. In connection with the name change, a new graphical profile and logo were developed, and a new website was launchedwww.norsk-reiseliv.no. This work has been continued in 2018, in addition to having been a review of the association’s strategies with, among other things, checking with other organisations to prevent overlap of work tasks.
Norsk Reiseliv has worked actively with Parliament throughout the year. We have taken an active role in input meetings in connection with various ministries and in the parliamentary hearings in connection with this year’s state budget and other reports to Parliament which include White Paper (report to Parliament) («018-2019) New tasks for regions. We have participated with consultative input in connection with “Proposal for regulations on amendments to regulations on environmental safety for ships and movable facilities”. Here, the theme of our consultation paper was the conditions for, among other things, emissions in Norwegian waters and the world heritage fjords.
We have submitted a consultation paper in connection with proposals from the Ministry of Transport and Communications for a new harbour and water act – “Sjøveien videre”. Norsk Reiseliv supports the proposal of disclosure for dissemination companies and has expressed this in consultation with the Ministry of Finance, and we have submitted input to the government’s new strategy for culture and tourism.
In addition, we have booked and conducted meetings with several key business politicians in Parliament. All of the meetings are part of the strategy for putting Norsk Reiseliv on the map and how we can raise the profile of the tourism industry. For our organisation, it is important that we participate wherever something happens, contribute with our expertise and that we make the association visible as the unifying independent organisation in the tourism industry.
We have worked with input on important tourism policy issues in the new government platform, as well as worked for increased focus on tourism in Parliament and ministries. We have had our own meeting with political leadership in the Ministry of Trade and Industry, where we presented our organisation and the most important challenges for tourism, including capital tax for hotel properties. We have conducted several meetings with the administration in the Ministry of Trade and Industry throughout the year, where two of the meetings were in the Tourism Committee.
Norsk Reiseliv has been an active participant in the preparation of Roadmap for sustainable tourism and has participated in follow-up meetings with, among others, the State Secretaries for the Ministry of Trade and Fisheries and the Ministry of Climate and Environment.
There have been constructive meetings with Innovation Norway´s tourism management, and we currently have a very good cooperation. We have also had constructive meetings and discussions with the Research Council of Norway regarding increased focus and the need for funds for business-oriented tourism research.
A working group has been set up to improve tourism statistics and the analysis basis in tourism. The group has had two meetings in 2018. We have also worked with Telenor to further develop their system for counting foreign visitors in Norway. Technology development in tourism is one of the areas which Norsk Reiseliv will work with. With this background, we have entered into a steering group for a Nordic TravelTech project which is planned to be established in the Oslo area.
Meetings have been held with potential new member companies and partners. The goal of the meetings has been to inform about Norsk Reiseliv, initiate cooperation and strengthen the position of tourism. In 2018, we received three new member companies: Avinor, Norlandia Hotel Group and Fjord Line.
Norsk Reiseliv has participated in various meetings, conferences and panel discussions. We have participated with guest lectures at Kristiania University College, as well as sat on the jury for the HSMAI awards and Grand Travel Awards. Norsk Reiseliv has a very good cooperation with HSMAI, and during 2018, we have conducted several breakfast meetings/debate meetings. We participated with a delegation in connection with the state visit to China in October 2018.
In September 2018, we moved from the office premises in Karenslyst Allé 4 to new offices in Engebrets vei 3 in Oslo.
The world is changing, new markets, target groups, trends and new technology require a focus on more targeted and cost-effective product development, distribution and marketing of Norway as a destination. This will be a prerequisite for the tourism industry to achieve a breakthrough and increase earnings in an ever tougher international competition. With future uncertainty in relation to several of our established industries, including the oil and gas industry, Norway needs better profitability and higher growth in traditional competitive industries.
In order to ensure sustainable growth and strengthen the market opportunities for Norway as a travel destination, we depend on the tourism industry and the public sector cooperating on developing tourism. Internationally, there is growth in tourism, and we believe our goals for growth are realistic, given that the framework conditions have been facilitated to increase international traffic to Norway both by individual travellers, as well as the meeting and congress market.
The White Paper of 17 March 2017 presented the government’s policy for a sustainable and profitable tourism industry. Based on the development of the tourism industry, the report outlines the opportunities and challenges facing the industry and explains how the government must strengthen the basis for the industry’s development and achieve the greatest possible growth through sustainable solutions.
Tourism lacks a stronger follow-up of the White Paper from the authorities. The tourists want the unique experiences which Norway can offer, but this requires that the industry and the authorities work together for international marketing and a sustainable development of tourism. Norwegian tourism is ready to take its responsibility and hopes that the authorities will also do their part to strengthen tourism.
In early 2019, Norway received a new government platform, the Granavolden Platform, and in contrast to the Jeløya Platform, tourism has now come in. Here, the government emphasizes that tourism is one of the world’s most growing industries, in which Norway is well-suited to participate. The fact that tourism emerges clearly in the new platform means that tourism will gain increased priority in the government’s policy in the coming 2.5 years. Norsk Reiseliv sees this as positive for the tourism industry.
It is a goal that Norway should maintain its global market share of 0.5 percent in tourism. We will not manage this without an escalation of the international marketing, innovation and sustainable growth in the tourism industry, which in turn will contribute to increased value creation and more jobs.
Norwegian tourism is growing – but even small changes in the framework conditions have significant negative consequences for the use of Norway as a destination, and thus jobs throughout all of Norway. A favourable VAT regime can make Norway more desirable as a destination, as opposed to increased VAT rates that will have significant consequences for an overall Norwegian tourism industry. The same applies to reductions in public funding for international profiling and marketing, and, not least, the introduction of tourist tax which will directly affect prices in an already stressed tourist market.
Tourism is significantly exposed to international competition. It is therefore important that the level of taxes and taxation is not higher than in the markets which we compete with. This applies to whether we should arrange things better so that those who live in Norway will holiday in Norway to a greater extent, and also so that foreign travellers will use Norway as a destination.
2019 will be an important year for Norsk Reiseliv, where the strategies will be incorporated and where the further work to ensure that Norway takes its share of the international growth in tourism will be crucial. The same goes for the preparation of a strategy and action plan for business-oriented research, with particular focus on how we will provide knowledge for tourism and develop tourism products for different seasons.
Oslo, 6 March 2019
Svein Arild Steen-Mevold /s/