Norway invests in the Arctic region, between experience and sustainability concerns

As inbound tourism trips to Northern Europe grew by 6%, Statistics Norway reports that in 2016 Norway welcomed about 5mn tourism arrivals. According to Innovation Norway, the Government’s official trade representative, the Country benefitted from the increasing fear for terrorism attacks in Europe. In addition, a weaker kroner made Norway a cheaper and more competitive destination.

A report designed by Bloom Consulting and commissioned by Innovation Norway shows how the Country was associated with natural beauty in online searches, as it’s proved by the 50 most popular search words in 2016 described in the table below.

Source: Innovation Norway

According to the World Travel & Tourism Council’s “Travel & Tourism Economic Impact 2017”, in 2016 tourism generated a direct contribution of about 12bn euros (NOK 125.3bn), representing 4% of the total GDP. Moreover, the total contribution (which also includes the indirect and induced ones) was 27.4bn euros (NOK 284.4bn), namely 9,1% of total GDP.

The World Economic Forum, in its “Travel & Tourism Competitiveness Report 2017”, ranks Norway 18th out of 136 analysed Countries for tourism competitiveness. The report shows the strongest points Norway owns as a tourism destination, which are supporting the growth of the whole sector: the Country brand strategy rate (4th), the prioritisation of Travel & Tourism (25th), the international openness (36th), the environmental sustainability (3rd), the air transport infrastructure (7th) and the tourist service infrastructure (23rd). On the other hand, the most penalising point is the price competitiveness (131st).

Innovation Norway published the “Tourism Strategy 2014 – 2020”, defining specific areas that focus on the development of the Norwegian travel industry, foreseeing marketing partnerships to promote Norway through experiential and creative tourism.

As other Northern regions, Norway is also investing in Arctic tourism, in particular in the Svalbard archipelago. Official statistics show that about 60,000 tourists visited the Arctic zone in Norway last year, performing more than Russia. As we have already reported, Chinese travellers are preferring Norway in the top 5 trending destinations to experience the northern lights, skiing, Arctic explorations, whale watching, and hot springs.

Moreover, there is room for developing luxury accommodations and tourism services in the Arctic region, paying attention to environmental sustainability. It’s reported that the Norwegian coastal voyage line called Hurtigruten announced that it will be investing about 20mn euros in the city of Longyearbyen, representing the largest tourism investments in the region ever.
The funds will be used to more than double the capacity of Hurtigruten’s Polar Hotel, currently run under the management of the Radisson chain as the Radisson Blu Polar Hotel Spitsbergen, that will now get around 100 new rooms, new conference facilities and a bigger bar and restaurant.
Even greater investment will be made in Hurtigruten’s Spitsbergen Hotel, planning a renovation of the building and the construction of a wellness centre.

At Twissen we observed that the Norwegian tourism sector is rising, there is room for investments in the Arctic region of the Country, meeting the increasing demand for experiential and active tourism. Norway is perceived as a safe destination, and sustainability is an important factor of attraction for this area: as it’s happening to the Antarctica, overtourism may represent a real threat to the natural environment.