National data on the economic impact of tourism is carefully monitored in all the Nordic countries, but the question remains: How do you best measure and compare regional impact? Is the growth in tourism reflected in regional employment rates, and which types of tourism activities create the most value? If tourism is booming in one community, how does that affect its neighbours? Nordregio has just published a report on the potential of using Regional Tourism Satellite Accounts (RTSAs) to shed light on these regional effects.
Massive growth in recent years
Following global trends, the Nordic countries have seen significant growth in tourism. The sector has become an important source of income and jobs, but despite this, there are still significant gaps in the understanding of tourism’s impact on regional economies.
“Especially in depopulated and economically challenged regions, there’s great value in understanding the contribution of tourism to economic development and to resolving underemployment issues,” says Anna Karlsdóttir, Senior Research Fellow at Nordregio and one of the main authors of the new report, Regional Tourism Satellite Accounts for the Nordic countries. The report was prepared in cooperation with CRT, the Centre for Regional and Tourism Studies in Bornholm, and ÅSUB, Statistics and Research Åland.
Some of the most remarkable tourism statistics highlighted in the report are from Iceland and Åland. Between 2010 and 2016, the number of tourist arrivals in Iceland more than doubled, peaking at over two million in a country of 360,000 inhabitants. In Åland, every fifth job in the private sector is in tourism.
“Before Covid, Icelandic tourism had grown considerably in value, making it the major export earner in Iceland,” Karlsdóttir says. “It would have been extremely interesting to be able to compare the differences between the regions, but this data is unfortunately not available. Instead, tourism data is only available on the national level.”
Denmark leads the way with annual RTSAs
Tourism Satellite Accounts are widely recognised as a suitable framework to analyse the economic impact of tourism. Recommended by the OECD, the accounts include data on, for instance, inbound and domestic tourism expenditure, employment and job creation, the value of goods and services produced in the sector, and tourism’s share of GDP.
According to Karlsdóttir, more detailed and coordinated regional data would provide a much better understanding of the dynamics of the industry. Nordregio has published a range of maps with regional data on tourism, and the first steps towards developing the RTSAs have already been taken in some of the Nordic countries.
In Denmark, CRT produces an annual RTSA in close cooperation with VisitDenmark, analysing the economic impact of tourism all the way down to the local level. The accounts provide a good indication of the state and development of tourism in each municipality.
“It’s a very useful tool for all the different destinations and Visit organisations across Denmark,” says Anne Thomas, Director of CRT. “We look at tourism consumption, such as overnight stays, which nationalities visit the different municipalities and the type of accommodation they choose. Based on this information, we can provide detailed data on consumption and the local income generated from tourism, which then allows us to assess the overall contribution to economic growth and employment in each municipality.”
Opportunities in Nordic cooperation
When Covid-19 hit, Bornholm, like many other popular tourist destinations, lost most of its bookings. When things started to brighten up again, the tourists returned, albeit with a change in audience, with fewer international guests and more domestic tourists.
“The situation was entirely different in Copenhagen and the other Nordic metropoles, where tourism pretty much came to a halt,” says Thomas. This illustrates one of the main benefits of developing the RTSAs in cooperation between the Nordic countries. “Coastal and nature tourism in Denmark resembles tourism in similar destinations in Norway and Sweden much more than it resembles tourism in Copenhagen.”
Jointly developing the RTSAs would therefore create a broader basis for comparison between similar destinations and provide valuable input for regional tourism strategies.
“It would allow us to identify particularly profitable types of tourism activities as well as relevant target groups for each area,” Karlsdóttir says. “This data would be very valuable in developing tourism strategies aiming to optimise the local benefits from the sector.”
Calculating the carbon footprint of tourism
Currently, CRT and Nordregio, along with a range of partners in Denmark, are looking into including calculations of the CO2 emissions from tourism in the RTSAs.
“This is obviously an important issue all across Europe and globally,” Thomas says, adding that the RTSAs already include much of the data required to calculate the carbon footprint. “Rather than having each country developing its own methods, it would make a lot of sense to agree upon using the RTSAs to assess the environmental impact of tourism. It’s already a well-known and accepted method in the sector.”
“Including the environmental footprint would be beneficial for tourism services all around the Nordic Region,” Karlsdóttir agrees. “Especially those who perform well and could, therefore, strengthen their competitiveness by promoting their sustainable approach.”