The impact of the coronavirus crisis on travel and tourism has already brought many businesses in Finnish Lapland to the brink of bankruptcy.
A fresh survey shows that close to half of all businesses in the sector in Lapland do not expect to be able to survive longer than another five months, if no improvement in the situation is seen. A wave of bankruptcies in Lapland would cut deeply into the entire nation’s tourism sector revenues.
According to the survey commissioned by the Finnish Lapland Tourist Board and Lapland Chamber of Commerce, 48 percent of tourism sector companies in the region say that unless a major change is seen, they can survive no more than another five months. A quarter say they believe that they can stay in business for up to 10 more months and 27 percent can see themselves continuing past 10 months.
“The situation is like driving into a wall at 100km an hour. The past season was a good one, then everything ended within a couple of days,” says Tiina Aokou, operations manager of Rovaniemi-based services company Arctic Circle Snowmobile Park.
Aokou adds that her company is not under immediate threat of closing down. Last season the firm employed about 20 workers. It looks now as if there will be pay checks for far fewer next season.
“Summer bookings are in practice at zero. We were saved by a good season, but a plan to make investments has been put on ice, and that money is set aside for the next winter season,” she explains.
The jewel in the crown
The head of the Finnish Lapland Tourist Board, Pertti Yliniemi, who is also active in the tourism business, calls the situation “alarming”. If the number of bankruptcies indicated by the survey actually occur, it would spell disaster for the entire province, he says.
“Every euro spent on tourism brings 56 cents to other business sectors. The collapse of tourism businesses will be massive unemployment and then there is the question of local government budgets,” Yliniemi adds.
Paavo Virkkunen, director of the tourism marketing organisation Visit Finland, points to the special position of Lapland in the tourist industry as whole.
“Lapland is the jewel in the crown of Finnish tourism. Especially for winter tourism, the importance of Lapland is irreplaceable”, Virkkunen explains.
Support for big and small
Pertti Yliniemi says he sees swift, effective government action as the only way to to save tourism sector businesses in Lapland.
“Government measures haven’t taken the travel sector into consideration and the fact that this is an export product. Last year over half of the clients of these businesses in Lapland came from abroad,” points out Yliniemi.
The government’s proposed scheme to aid restaurants is not enough, in his view. There should be support provided for the entire travel sector.
“What’s needed now is direct support that is sufficiently simple, such as being indexed according to last year’s revenues or based on a calculation of fixed costs,” Yliniemi proposes.
Tiina Aokou of Arctic Circle Snowmobile Park also favours direct financing. She points out that there are many tourist sector services companies that will be forced to close down before restaurants.
Pertti Yliniemi has also aired the idea of reducing VAT on accommodation, transport, and alcohol as a way to stimulate travel once it takes off again.
However, measures helping only smaller companies will not save the industry, says Yliniemi. Big companies act as economic drivers in the region, bringing tourists to areas where they use the services of smaller firms.
Related stories from around the North:
Arctic: Roundup of COVID-19 responses around the Arctic, Eye on the Arctic
Finland: Virus crisis sees tourism spending in Finland plummet by up to €10b, Yle News
Greenland: COVID-19: Arctic science expedition postpones flight campaign after trainee tests positive for virus, Eye on the Arctic
Norway: Norwegian Arctic wilderness tourism hit particularly hard by coronavirus, The Independent Barents Observer
Russia: Risking death for Arctic gas? Northern Russia construction site becomes COVID-19 hotbed, The Independent Barents Observer
United States: Alaska’s largest rural airline, Ravn, files plan to liquidate as bankruptcy proceeds, Alaska Public Media