Norway
In the last decade, the economic contribution of the tourism sector in Norway has increased considerably, reaching NOK 127.4 billion in 2019 and representing 3.6% of total GDP. Tourism has also become a significant employer, particularly in rural areas. In 2019, the sector sustained over 182 800 full-time jobs, accounting for 7.4% of total employment.
Total tourism expenditure amounted to NOK 194 billion in 2019, with approximately 30% being spent by international tourists. In 2020, international overnight visitors declined by 76.4% to 1.4 million. There was a limited recovery in 2021 when international arrivals were slightly above 2020 levels. The top source markets in 2021 were Germany, Sweden, the Netherlands and the United States.
Domestic tourism, both for leisure and business purposes, has always dominated the sector, with Norwegians accounting for 70% of all commercial nights in 2019. The impacts of COVID-19 saw the share of domestic tourism increase to 86% of commercial accommodation nights in 2020. This was even higher in 2021, as domestic tourism recovered to 85% of 2019 levels.
Norway projects a recovery of inbound tourism to pre-pandemic years in 2023 or 2024.
The Ministry of Trade, Industry and Fisheries is responsible for developing and regulating tourism. The Ministry co-operates closely with other principal ministries relevant to tourism, including those dealing with local government, regional development, agriculture, food, transportation, climate and environment.
Through the Ministry of Local Government and Modernisation, regional and local authorities have a key role in promoting tourism development. They establish conditions of key importance to tourism, with responsibility for planning and regulating infrastructure, utilities, national parks and natural and cultural heritage attractions. The Ministry of Local Government and Modernisation owns half of Innovation Norway.
Several regions (and some municipalities) have their own strategies for tourism and give financial support to their regional and local Destination Management Organisations. Regional reform initiated in 2020 gave the counties renewed roles and wider responsibilities and is expected to provide a more efficient framework to solve cross-sectoral challenges to benefit the tourism industry, which interacts with many sectors and stakeholders within and across regional borders.
The Ministry of Climate and Environment and Ministry of Transport are key partners, given their roles in developing policies in favour of a more sustainable tourism sector. In addition, The Ministry of Agriculture and Food is contributing to realising the potential for increased value creation resulting from co-operation between farmers and food producers, restaurants and other parts of the tourism industry.
Innovation Norway, a state-owned company, delivers the national tourism organisation function. Innovation Norway's main goal is to increase overall economic growth and value creation for the Norwegian economy, considering sustainability goals. To reach this target in tourism, Innovation Norway focuses on stimulating product development and promoting Norway as a brand and tourist destination internationally. Innovation Norway is funded mainly by the Ministry of Trade, Industry and Fisheries but also receives funding from other ministries and counties. For its NTO role, Innovation Norway receives approximately NOK 180 million annually.
Innovation Norway allocates travel and tourism companies loans, grants, and guarantees. In 2020/21, these sums increased substantially due to extraordinary measures and transfers to compensate businesses for COVID-19 impacts. In 2020, Innovation Norway allocated NOK 724 million in loans and grants to travel and tourism companies, an increase of 137% from the previous year. Of this amount, NOK 249 million was extraordinary funding. The remaining NOK 475 million was allocated as industry-neutral business support. The funds have largely been used for restructuring activities.
Source: OECD, adapted from the Ministry of Trade, Industry and Fisheries, 2022.
In 2020, Norway developed a National Tourism Strategy 2030 - Big impact, small footprint. The Strategy process was completed in co-operation with a wide range of stakeholders. The Strategy aims to set out a series of measures to ensure the development of a more sustainable and profitable tourism sector by 2030. The Strategy was published in May 2021 and outlines 23 policy measures being taken into account in the post-pandemic recovery and possible changes in future travel trends.
Examples of recommended policy measures include:
Funding to stimulate the recruitment of qualified staff in the recovery phase, focusing on the service sector.
Initiating Reis21 – a national strategic instrument for creating a long-term platform for knowledge-based innovation and restructuring in the Norwegian tourist industry.
Creating the Official Norwegian Report (NOU) on framework conditions for the tourism sector.
Furthermore, to improve the evidence base for tourism, Norway has:
Initiated a pre-study on the possibility of establishing a national monitor, a big data analysis tool for the tourism sector intended to provide a comprehensive view of tourism as a sector.
Funded the development of a climate-smart digital calculator that links data on CO2 emissions from transportation (see Box. 3.6), and tourism expenditure from the various tourist markets. The goal is to permit informed strategic choices by tourism stakeholders so that the industry can more easily meet the target of a 10% annual reduction in total greenhouse gas emissions from commercial tourism activity.
A key long-term challenge of the Norwegian tourism sector is its relatively low profitability due to a low share of high value-added tourism products, seasonality and a lack of co-operation in and between destinations. Sustainability is also key and a prerequisite to developing Norway as a tourism destination. In 2021, Norway committed to several new policy measures for sustainable tourism development (see Box below). In addition, the Sustainable Destination Certification scheme, which enhances destination management, has been expanded and adjusted, and a new regulatory framework for more sustainable fishing tourism has been implemented. The sustainable tourism policy has also included measures such as selecting and marking a growing number of National Hiking Trails to make them more robust, accessible and attractive for the visitor.
In recent years, certain places have faced challenges such as overcrowding, with negative effects also reported on local communities and their surroundings. There is a need to increase efforts to spread tourism, both geographically and seasonally, improve interactions between the tourism sector and local communities, and increase the local economic gains from tourism.
Building on the Strategy ‘Big Impact, Small Footprint’, Norway is emphasising sustainability at the destination and company levels. The goal is to reduce the negative long-term effects of the pandemic and create more year-round jobs within tourism. Specific measures the government has committed to include:
Launching a pilot programme for sustainable tourism, supporting local nature and environmental management and emission-free travel to and from Norwegian destinations.
Developing a national certification system for local and regional guides in co-operation with the relevant organisations.
Ensuring value creation and adequate facilities locally by enabling municipalities to introduce visitor contributions (a variant of a tourist tax).
Reviewing the framework conditions for regional Destination Management Organisations in co-operation with the industry.
Assisting Norwegian tourism companies in their contact with international online travel agencies.