Sweden - travel and tourism: Volume growth driving the market (Strategy, Performance and Risk Analysis)
Sweden shares borders with Norway, Finland and Denmark and comprises forests, lakes, mountain ranges, and historical sights. Having such geographical heritage, domestic tourism dominated the sector; a trend set to continue over the forecast period (2017-2021). Although international arrivals were below the regional average, they are forecast to improve due to an increase in disposable income.
Leisure is the primary purpose of travel and Sweden’s passenger airlines market and in 2016 was in line with the regional average in terms of seats available. However, it will record growth owing to an influx of domestic and international arrivals.
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Economic growth to foster domestic trips and tourism campaigns to drive international arrivals
In Sweden, domestic trips accounted for 64.1% of all trips taken in 2016, recording a CAGR of 6.7%, from 44.5 million in 2012 to 57.7 million in 2016. This was primarily driven by a marketing strategy initiated in collaboration with Airbnb, the government’s sustainable destination development program 2012-2015, the Freedom to Roam campaign, and a tax deduction. International arrivals accounted for 14.5% of total trips in Sweden.
Increase in domestic and international travellers to drive growth
Total revenue generated from hotels reached US$3.9 billion in 2016 after a decline of -1.1% during the review period due to price wars. Revenue will post a forecast-period CAGR of 4.9% to reach US$4.8 billion in 2021.
Growth international and domestic trips fuelled by LCCs
Total passenger airlines revenue increased at a CAGR of 0.8%, from US$4.7 billion in 2012 to US$4.8 billion in 2016. The load factor for passenger airlines rose from 69.5% in 2012 to 75.3% in 2016 and will reach 81.1% in 2021 due to a rise in number of trips for leisure and business purposes.
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