Finland s Touristic Demand

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1 Digital Demand (D² ) Finland s Touristic Demand August 10 th, 2015 Summary report Bloom Consulting Since 2003

2 Executive Summary This chapter presents a general overview with conclusions for Finland based on its international touristic demand. Overall figures ,0% In July 2014 June 2015, Finland received searches related to tourism. From those searches, 63,0 % of them were Generic, while 37,0% of them were Specific. NO Nº15 FI Nº24 Norway comes 15 th among European competitors. Finland comes out 24 th in the Digital Demand ranking in Europe. Among its competitors, Finland comes 4 th behind Norway, Sweden and Denmark, but ahead of Estonia. 0,40 S = 1 tourist Finland has a conversion ratio of 0,40 searches per tourist. This figure is above the benchmark average of 0,22 searches per tourist and puts Finland in 17th position in Europe and in 2 nd position among its selected competitors. 0,27 S = $1000 Protected Areas Nº 1 Finland has a conversion ratio of 0,27 searches per $1000 of tourist receipts. This figure is below the European average of 0,49 searches per $1000 of tourist receipts, but puts Finland 19 th in Europe and in 2 nd among its selected competitors. Protected Areas is the most searched Brandtag for Finland with 26,9% of the total Specific searches, followed by Local Gastronomy (16,4%) and Winter Sports (12,1%). Japan Nº 1 Japan is Finland s number one Target Market, making up 12,6% of the total searches. Germany, the USA, the UK and France complete the top five ranking from the selected target markets. Bloom Consulting Since 2003 Page 1

3 Finland s D² in Detail The following analysis of Finland s D² both deepens the understanding of the most popular Brandtags and depicts the seasonality of searches along with the top target markets of potential tourists. D² by typology of search As outlined earlier in the report, D² searches are categorized into two distinct groups: Generic and Specific. The aggregate result of these two types of online searches depicts total Digital Demand for the destination. A high cumulative Generic online demand may imply little external knowledge of a location s greatest touristic draws, while a high demand for more Specific activities or attractions may suggest a country brand that is more successful in promoting key points of touristic interest. From the annual online searches carried out by potential tourists in the last 12 months, 62,96% of them were Generic searches, while 37,04% were Specific searches. The graph below compares Finland s distribution against it selected competitors: Figure 4.1 Distribution per category of online searches for Finland and competitors Finland July 14 - June 15 Competitors July 14 - June 15 63,0% 37,0% Specific Searches Generic Searches 53,3% 46,7% Specific Searches Generic Searches When comparing Finland s figures to the competitors behavior, we observe that Finland s Specific touristic offerings and awareness is lower than the average of 46,66% among competitors. This could mean that potential tourists are less aware of what Finland has to offer than they are of Finland s selected competitors. Bloom Consulting Since 2003 Page 2

4 D² by tourism segment The D² analysis by tourism segment provides in-depth touristic perceptions of a country and its most important attractions. This information reveals the most popular aspects of a country brand, which provides essential knowledge for the development of the tourism promotion strategies. In the case of Finland, our D² analysis shows that the country is overwhelmingly viewed as a destination for Outdoor Activities (51,0%). The second most popular segment for tourists for Finland is Culture (28,1%), followed by Leisure and Entertainment (13,8%). Figure 4.2 Percentage of D² by Brandtag segment (July 14 June 15) Outdoor Activities Leisure and Entertainment Niche Markets 51,0% share 13,8% share 4,4% share Competitors Avg. 51,9% Competitors Avg. 12,3% Competitors Avg. 14,4% Culture Target Markets 28,1% share 2,7% share Competitors Avg. 17,3% Competitors Avg. 4,1% These three categories combined represent more than 90% of total Specific searches. The remaining searches are related to Niche Markets (4,4%) and Target Markets (2,7%, showing the little of development of these tourists segments. D² by Brandtag Our in-depth analysis of each Brandtag provides detailed information about the attractions and activities that are most popular among potential international visitors to Finland. Bloom Consulting Since 2003 Page 3

5 Our elaboration of Brandtag popularity deepens the understanding of Finland s greatest touristic draws. Consequently, it is useful for the future development of strategic positioning and promotion related to the national tourism industry. Most popular Brandtags As illustrated in the graph below, Protected Areas is by far the most popular Brandtag for Finland, representing 26,9% of the total volume of Specific searches. Local Gastronomy (16,4%) and Winter Sports (12,1%) come second and third respectively. Figure 4.3 Distribution of Brandtag popularity in Finland (July 14 - June 15) 26,86% 16,43% 12,10% 5,71% 4,85% 3,64% 3,62% 3,00% 2,99% 2,39% 18,40% Protected Areas Local Gastronomy Winter Sports Local Traditions Hiking Spa Fishing Historical Sites Special Events Cruises Other brandtags The top three Brandtags for Finland account for over 50% of the total Specific searches. Behind the top three, each Brandtag has under a 6% share. Local Traditions (5,7%) and Hiking (4,9%) complete the top five most popular Brandtags. It is interesting to note that three of the top five Brandtags come from the Outdoor Activities segment. For more detailed information on Brandtags, please refer to Appendix 4.3. Brandtag popularity by tourism segment Analysis of Brandtag popularity by tourist segment provides a detailed overview of the tourism demand among more directly related Brandtags. This individualized summary facilitates the creation of tailored strategies for each tourism segment by highlighting the individual Brandtags that contribute the highest volume of searches to the segment total. The following graphs display the Brandtag distribution for each of the five individual tourism segments. Bloom Consulting Since 2003 Page 4

6 Figure 4.4 Brandtag distribution by tourism segment (July 14 - June 15) Outdoor Activities Leisure and Entertainment 52,66% Protected Areas 26,34% Spa 23,73% Winter Sports 21,63% Special Events 9,50% Hiking 13,97% Entertainment Parks 7,10% Fishing 12,03% Beaches 2,50% 2,39% 1,30% 0,45% 0,27% 0,10% Hunting Adventure and Extreme Golf Surfing Diving Water Sports 10,07% 6,11% 4,11% 3,10% 2,64% Shopping Nightlife Boating Leisure Activities Gambling Niche Markets Culture 53,91% Cruises 58,49% Local Gastronomy 12,02% Language Courses 20,34% Local Traditions 11,33% City Tourism 10,70% Historical Sites 8,10% Sustainable Tourism 5,72% UNESCO 7,63% Luxury Tourism 3,28% Museums 4,95% 2,06% Animal Watching Medical Tourism 0,99% 0,48% Performing Arts Local People 0,00% Religious Tourism Target Markets 34,22% 29,03% 21,88% 14,38% 0,49% 0,00% Youth and Backpackers Business Family Couples LGBT Senior The Outdoor Activities segment gains the majority of its digital demand from Protected Areas, accounting for 52,7% of the searches, followed by Winter Sports (23,7%), Hiking (9,5%) and Fishing (7,1%). The searches in the Leisure and Entertainment section are relatively well distributed among its Brandtags. Spa (26,3%), Special Events (21,6%) and Entertainment Parks (14,0%) top the ranking. Beaches (12,0%) and Shopping (10,1%) complete the top five. Bloom Consulting Since 2003 Page 5

7 Cruises is the stand out winner in the Niche Markets segment, accounting for 53,9% of the searches. Language Courses (12,0%) and City Tourism (11,3%) follow, although with nowhere near the same impact. Together, these three Brandtags make up over 75% of the total searches in Niche Markets. Searches within the Culture segment are dominated by keywords related to Local Gastronomy (58,5%). The only other Brandtags with a significant search volume are Local Traditions and Historical Sites with 20,3% and 10,7% of the searches respectively. Performing Arts and Local People had almost no results for the 12- month period. Within the Target Markets segment, there are several Brandtags with significant importance. Youth and Backpackers leads with 34,2% of the searches in this category. Business and Family follow, with 29,0% and 21,9% of the searches each. Couples comes in fourth place in the segment with 14,4% of the searches. D² by month Understanding the monthly trends of Finland s digital demand is of critical importance when planning any form of Country Branding Strategy. The seasonality of searches illustrates the distribution of Finland s touristic demand throughout the year. This valuable insight gains additional value when compared contextually to the seasonality of the international touristic arrivals to Finland. The online search volume for all keywords related to tourism in Finland follows winter search seasonality. The searches seem to generally be slightly more weighted through October to February. Figure 4.5 Distribution of the total searches and arrivals for Finland by month (searches July 14 - June 15, arrivals June 14 May 15 according to stat.fi) 14,0% 12,0% 10,0% 8,0% 6,0% Arrivals Searches 4,0% 2,0% 0,0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Bloom Consulting Since 2003 Page 6

8 A large share of the arrivals come from neighboring countries, who are likely to already be aware of Finland s touristic offerings. Therefore these arrivals are not converted into searches on the seasonality graph above. In terms of searches, the interest in Winter Sports during winter months seems to be bigger than the interest in Protected Areas, Hiking and Fishing during summer, which peak during May and June. Special Events and Museums are further examples of Brandtags that are more popular during the summer. Interestingly, most of the arrivals come in the summer months, which implies that people search throughout the year in order to plan their summer holidays. Protected Areas seems to be the most important Brandtag for Finland in terms of transforming a search into an arrival. D² by Target Market In order for a tourist destination to employ appropriate strategic positioning, it is crucial to understand its Target Markets behavior and interests. By analyzing online search origin, Bloom Consulting is able to pinpoint the most important sources of potential visitors to Finland. The method encourages segmented promotion strategies that highlight specific tourist attractions and activities within chosen Target Markets. The table below shows the 10 selected Target Markets ranked by their respective digital demand for Finland. Figure 4.6 Percentage of online searches by country of origin for the 10 Target Markets (July 14 - June 15) 12,62% 10,13% 7,22% 7,03% 6,10% 5,05% 4,34% 3,70% 1,15% 0,45% 42,21% Japan Germany United States of America United Kingdom France Russian Federation Spain Italy Korea, Rep. China Others From the chosen Target Markets, Japan leads the touristic digital demand for Finland with 12,6% of the total searches. Germany, a relatively close neighbor, follows Japan with 10,1%. Next come the USA and the UK, with 7,2% and 7,0% of the searches respectively. Completing the top five is France, with 6,1% of the searches. Bloom Consulting Since 2003 Page 7

9 Interestingly, Japan tops the ranking for number of searches made about Finland. This demonstrates a potential market for Finland, as there is evidently huge interest from the Japanese market that could be capitalized on. Almost 82% of searches from Japan are Generic in nature, which shows they have interest in traveling to Finland but do not know what it can offer. The Specific Brandtags with the most searches from Japan are UNESCO, Local Gastronomy and Local Traditions. It is important to note that the remaining 42,2% of total global searches come from unanalyzed markets. As expected, a large amount comes from Scandinavia and Central Europe while the remaining searches are generally well distributed among various other markets. This demonstrates well dispersed interest throughout the world towards Finland. Additional study including Chinese search engines Searches coming from the most important search engine in China are important to be included in the study as they complete the global searches and are particularly important for the Chinese market. However, it is important to note that we cannot accurately deduce the search behavior of potential tourists from the results from the Chinese search engines due to the way the information is provided. The data is less accurate and the search engines offer less features at the moment. Therefore, when considering the behavior of the tourists, we will use the results shown on the previous page. Nonetheless, the following graph was included in order to take into account the amount of searches coming from China using the most popular Chinese search engine. The following results with the extra searches included are a better indicator to understand how much potential tourists from China are searching for Finland. Figure 4.7 Percentage of online searches by country of origin for the 10 Target Markets (July 14 - June 15, searches from largest Chinese search engine included) 11,33% 10,66% 9,09% 6,48% 6,31% 5,47% 4,53% 3,89% 3,32% 1,03% 37,88% Japan China Germany United States of America United Kingdom France Russian Federation Spain Italy Korea, Rep. Others Bloom Consulting Since 2003 Page 8

10 When considering the searches made from this search engine, China s searches rise from to from a share of 0,5% to a share of 10,7% of the total. The other Target Markets see their shares decrease. These results push China to being the second most important Target Market for Finland. Tourists by country of origin It is essential to understand the current tourist arrivals by country of origin to determine the current primary, secondary and emerging touristic markets. The graph below depicts the top Target Markets in comparison to the selected markets, ranked by the number of tourist arrivals to Finland. Russia is the main inbound market for Finland with 22,5% of total tourist arrivals. Neighbors such as Sweden, Norway and Estonia also have a large share, accounting for over 17% of total arrivals. Other European markets such as Germany and the United Kingdom also show their importance with over 15% of total arrivals between them. Figure 4.8 Percentage of international tourist arrivals Source: stat.fi data Top Target Markets Selected Target Markets 22,52% Russian Federation 22,52% Russian Federation 10,97% Sweden 9,09% Germany 9,09% Germany 6,61% United Kingdom 6,61% United Kingdom 3,74% Japan 3,74% Japan 3,42% United States 3,42% United States 3,13% China 3,38% Norway 3,00% France 3,13% China 2,14% Italy 3,05% Estonia 1,72% Spain 3,00% France 0,58% Korea, Rep. 31,08% Others 44,06% Others The top five selected Target Markets represent just under 45% of the international tourists traveling to Finland. The graphs on searches and arrivals provide relevant insight on arrivals, which need highlighting. Russia has a huge share of arrivals, while its share of searches is only 4,5%. As a neighboring country to Finland, the Russian market is very aware of what Finland has to offer as a touristic destination and is therefore much less likely to search prior to their trip. On the other hand, as previously mentioned, despite very high search volume, Japan is 5 th most important market for Finland with only 3,7% of the international tourist arrivals. This search leadership from Japan is most due to the high share of Generic searches coming from that inbound market. Bloom Consulting Since 2003 Page 9

11 D² ratio per tourist by country of origin Once both the digital demand and the tourist arrivals by country of origin for the selected Target Markets have been collected, we can proceed to compare both figures to gain an understanding of the appeal and future growth of the Finnish tourism industry. Ratios below one do not present enough evidence to predict a future growth in the short term. Higher ratios indicate that tourists are not fully aware of what a country has to offer and therefore need to search more about it. Lower ratios can be an indicator of high awareness in the country of origin or a tendency for tourists from that country to use travel agencies and tour operators to plan travel, rather than the Internet. Figure 4.9 Ranking of searches per tourist arrival for Finland by Target Market (searches July 14 - June 15) Source: stat.fi data ,40 1,20 1,00 0,80 0,60 0,40 0,20 0,00 JP ES US FR KR IT DE UK RU CN OT As shown in the graph above, the ratio of searches per tourist is the highest for Japan (1,33), followed by Spain (0,99), the United States (0,83), France (0,80) and Korea (0,79), which complete the top five. Within the top five, all of the countries have a ratio above the average of 0,64. This means that all of these markets have a large potential for growth in the Finnish tourism industry in the near future. Bloom Consulting Since 2003 Page 10

12 About Bloom Consulting Company profile Bloom Consulting is a renowned Country Branding Consultancy currently in its 11 th year of operation. Our headquarters is located in Madrid, with further offices in Lisbon and São Paulo. The company s management has been interviewed by Forbes Magazine, The Economist and CNN. According to Country Branding Central ( our CEO, José Filipe Torres, is considered to be one of the top three international experts in the fields of Country and City Branding. A sample of Bloom Consulting s clients can be found below: Countries Aruba Austria Bulgaria Germany Latvia Malta Portugal Poland Spain (ICEX) Seychelles Sweden Macao Regions Castilla y León (Spain) Madrid region (Spain) Herzegovina (B&H) Porto and Norte (Portugal) Algarve (Portugal) Southwest Portugal Cities Brussels (Belgium) Helsinki (Finland) Riga (Latvia) Victoria Gasteiz (Spain) Idanha-a-Nova (Portugal) Destinations (Private investors) Belo Horizonte (Brazil) Southeast Portugal Miami (USA) Tete (Mozambique) Contact : Gonzalo Vilar Partner and Head of Research (CET) Bloom Consulting Since 2003 Page 11

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