Denmark: Denmark Tourism Profile

Growth in domestic and outbound tourism

Even though the Danish economy suffered in the first part of 2014 rom the European debt crisis, the situation changed in the second part of the year and 2014 ended in macreconomic growth. One outcome of this was the increased rate in consumer confidence and tourism expenditure. Tourism flows outbound continued to grow and so did tourism flows domestic in 2014. Danes are known to be eager about their annual trip abroad during the summer holidays. Good weather conditions in the summer of 2014 encouraged Danes to go out and tour their country as well.

Decline in tourism flows inbound

Tourism flows inbound saw a negative development in 2014, due to a strong decline in arrivals from the main market, Germany. German families have traditionally been the most important target group for Danish coastal tourism. However, over the review period the number of German tourists in Denmark decreased as they, to an increasing degree, were discouraged by the unstable weather conditions and the relatively high prices for renting a summer house in Denmark. This negative trend continued in 2014 with a drop in incoming German tourists.

Developments in Copenhagen stimulate tourism growth

Copenhagen continues to be the major destination in travel and tourism in Denmark. More areas in the capital city of Denmark have acquired themselves a reputation of live, dynamic and creative places, which are under constant development and thus attracting more domestic and international visitors. At the same time, Copenhagen is offering more cultural activities, sites and attractions, appealing to a broad audience of all ages, which is encouraging more people to come and experience the city. It is expected that this will help Copenhagen achieve significant growth in the number of arrivals, making the city the main destination and an important growth driver for Danish tourism.

Online sales continue to gain in importance

Online sales of tourism products and services have continued to increase their value share at the expense of offline sales. This trend existed over the review period and was very true for 2013 as well. In many categories of travel and tourism, for instance car rental and air transportation, the value share of online sales has already surpassed that of offline sales. The high internet penetration in Denmark, growing trust among Danes in internet retailing, a high level of convenience and the use of the internet as a tool to compare prices are the key drivers behind this development. Massive online marketing campaigns by nearly all market players and the strong performances of pure internet companies also support growth of online sales.

Positive forecast for travel and tourism in Denmark

Travel and tourism in Denmark is a market projected to see positive developments over the forecast period. The projection of improvement in the European economic climate is expected to have a positive impact on European tourists travelling to Denmark. Many Danes will continue to travel abroad during the summer months as this is perceived by many to be a tradition. Furthermore, developments of more events and attractions throughout the country and future improvement in coastal tourism are other drivers for growth in domestic and international tourism.

Danish tourism enters fragile recovery

Denmark, unlike most of its neighbours, is recovering much slower from the financial crisis and even though Danish people have more money than before, consumption remained low. This was also evident in the tourism industry where Danes took fewer trips abroad and spent less money while on holiday.

Denmark continually losing tourism share

Denmark lost a great deal of foreign visitors during the last nine years, while the tourism industry of neighbouring Germany and Sweden grew rapidly during the same period. Like anything else, a good tourism industry is subject to continuous maintenance and upgrades in order to stay competitive and profitable.

VAT charges suppress tourism growth

Denmark is the only country in Western Europe, which does not allow companies to deduct all the VAT on hotel services. According to consultancy house Copenhagen Economics, the major problem with VAT is that companies can only deduct a quarter of the VAT paid at Danish hotels, while in neighbouring countries they can deduct the whole amount making hotel stays and services almost 20% cheaper.

Denmark brand needs strengthening

Denmark is a small country compared to most other Western European countries, which means less available money for tourism marketing than say Germany or Sweden. In order to make marketing more efficient Denmark really needs to understand what foreigners like about destination Denmark, using available funds more effectively, create a team effort among industry participants and move beyond marketing singly romantic concepts such as The Little Mermaid and Tivoli.
Strong Danish Kroner

The strong Danish Kroner was another hindrance for bed nights especially those originating from Sweden and which declined heavily in 2009. However, these reached lowest levels and are now slowly recovering.

Hotel discounts, hotel closures and pressure on other accommodation

The low rates of bed nights caused an excessive supply of accommodation causing hotels, especially those rated 3 stars and above, belonging to a chain and having large operations of scale, to slash their prices dramatically. This made 3 and even 4 star hotels suddenly very affordable and smaller independent hotels were forced to close down and other accommodation decreased in 2010 even though the number of bed nights increased in Denmark as a whole.