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Scandinavia Market Profile

The Scandinavian countries of Sweden, Norway, Finland and Denmark constitute a small but important market for California. With six weeks of paid vacation annually, Scandinavians are heavily incentivized to explore the rest of the world. The proximity to so much of that rest of the world – Europe, Asia and the East Coast – makes California a longer haul. Still, Scandinavians are responsible for approximately half a billion in travel spending dollars annually.


MAJOR TAKEAWAYS

  • Warmer weather saw an increase in staycations in 2018.
  • Many Scandinavians belong to the money-rich, time-poor segment, so they travel multiple times a year.
  • Scandinavian travelers are migrating to online booking as opposed to traditional outlets.
     
  • Travel parties are primarily singles or couples looking for customized experiences.
  • Road trips are in: Nordic travelers are seeking off-the-beaten-path destinations.
 

Scandinavia Profile

290,000
In Person Trips, 2018
$571M
Visitor Spending, 2018

Market Conditions

GDP Annual Growth Rate

GDP Annual Growth Rate grew 2.2 percent in the Scandinavian region in 2018 and is forecasted to grow by 2.0 percent in 2019. Inflation was 2 percent in 2018, and is predicted to decrease by 0.5 percent in 2019. The unemployment rate is decreasing, from 6 percent in 2017 to 5.5 percent in 2018 and is forecasted to stay stable in 2019.

Currency

  • Denmark, Sweden and Norway have maintained their local currencies with the Danish krone, Swedish krona and Norwegian krone (DKK, SEK and NOK). Finland adopted the Euro in 2002.
  • DKK follows a fixed exchange rate against the Euro and the same goes for the Norwegian NOK. However, the Swedish SEK is likely to suffer due to the uncertainties of the new forming parliament and their 2019 budget.


Travel & Planning Methodologies

AIRLIFT

  • 32 weekly non stop flights
  • 9,300 weekly non stop seats
  • There are 36 weekly non-stop flights to California from Scandinavian gateways to three California gateways: SFO, OAK, LAX. Secondary gateways with one-stop flights include San Jose and San Diego.
  • In June 2018, Icelandair reintroduced their service between Keflavik to SFO offering seasonal flights four times a week.
  • As of Mar. 31 2019, Finnair will introduce three weekly flights from Helsinki to LAX operated with the new Airbus A350 aircraft, while reinstating the seasonal SFO route from Helsinki.

BOOKING

  • Scandinavians’ trip decision time is four months for travel to the U.S. However, the booking period is becoming shorter as Scandinavians are becoming more spontaneous, deciding timing and destination at the last minute.
  • Scandinavians are one of the highest spending Europeans.
  • Many Scandinavians belong to the money-rich, time-poor segment and prefer to travel multiple times a year.
  • Tax returns and vacation pay are to a large extent spent on travel, which is why many book vacations during the months of March through May.
  • Scandinavians typically start the planning of their next holiday when returning from vacation.
  •  There are only a few traditional tour operators in the market, most are independent chains/OTA’s and wholesale agencies.

SUMMER HOLIDAY

  • Type of vacation: 3-4 weeks
  • Booking timeframe: January-April (planning: November-January)
  • Travel period: June, July, August, September

Market Barriers & Risk Factors


Competitive Landscape

Key competitors in terms of long-haul flight times, and with key messages:

  • Thailand (Culinary, Culture, Authentic)
  • Australia (Road trip, Outdoor, Authentic)
  • South America (Columbia, Costa Rica, Brazil, Argentina, Peru) (Culture, Outdoor, Culinary)
  • Western Canada (Outdoor, Culinary, Authentic)
  • South America and Asia routes increase in seat capacity particularly from Emirates and Turkish Airlines, with a very aggressive price point.

 


Other Market Insights

MARKET

  • Consumers are booking online and less through traditional tour operators.
  • Scandinavia is the fourth largest European market to the U.S.

AUDIENCE

  • Scandinavians enjoy five to six weeks of vacation plus 12 paid holidays annually.
  • Scandinavians voted the U.S. the top long-haul destination in 2017 for the seventh consecutive year.
  • Scandinavian travelers seek authentic, unique and culinary experiences (authenticity = luxury).

PRODUCT EXPERIENCE

  • Fly/drive itineraries are dominant in tour operator offerings and customized itineraries are very popular.
  • Growing interest in road trips to off-the-beaten-path destinations in California.

 


Sources

  • Nordic Outlook October 2018
  • Danske Bank
  • DIIO
  • U.S. Department of Commerce
  • Nordic Market Report
  • CIC Research, Inc.
  • Danish Travel Awards
  • National Travel and Tourism Office

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