In the last decade, the economic contribution of tourism in Norway has increased considerably, reaching NOK 120.3 billion in 2017. This represents 3.6% of total GDP, a share that has remained stable in recent years. In 2017, the tourism sector employed 166 000 people, representing 6.1% of total employment. The sector has become a significant employer, particularly in rural areas. Travel exports represented 13.0% of total service exports in 2018.

Inbound tourism saw 5.7 million visits in 2018, following a considerable increase in the last couple of years. Inbound tourism expenditure amounted to NOK 55.3 billion in 2018, compared to NOK 53.8 billion in 2017. Recent annual fluctuations in visits have been substantial, ranging from a 12.4% increase in 2016 to a 2.7% decrease in 2017. Exchange rate conditions have been favourable for inbound tourism since 2013, with a weak Norwegian currency making a visit to Norway less expensive. Key inbound markets are the neighbouring countries of Sweden, Germany and Denmark. Long-haul markets such as the United States and China have seen a sharp increase in visits to Norway since 2013.

Domestic tourism, for both leisure and business purposes, dominates the tourism industry in Norway. In 2018, Norwegians accounted for 69.3% of all commercial overnight stays. A total of 19.0 million domestic overnight trips took place in the country in 2018, a sharp increase of 25.8% compared to 2017.

Responsibility for the development and regulation of tourism lies with the Ministry of Trade, Industry and Fisheries. The Ministry co-operates with other ministries in order to co-ordinate policies of importance to tourism. One example is the extended co-operation with the Ministry of Culture to showcase the potential for increased value creation between the cultural, creative and tourism sectors. The Ministry of Climate and Environment is another key partner given its role in developing policies to promote a more sustainable tourism sector.

Regional and local authorities also influence tourism development. They establish the conditions of key importance to tourism, with responsibility for planning and regulation in areas such as infrastructure, utilities, national parks and numerous local attractions linked to natural and cultural heritage. Some regions and municipalities have strategies for tourism and many give financial support to their local Destination Management Organisations.

In 2020, Norway will implement a regional reform process that will reduces the number of counties, with those that remain being enlarged, with renewed roles and wider responsibilities. The objective is to build stronger regions that can provide a more efficient framework to coordinate activities and solve cross-sectoral challenges. This reform is expected to benefit the tourism industry, which interacts with many sectors and stakeholders across current regional borders.

Innovation Norway is a state-owned company that functions as the National Tourism Organisation. Innovation Norway's main goal is to increase overall economic growth and value creation in the Norwegian economy, within sustainability goals. To reach this target in the tourism sector, Innovation Norway focuses on stimulating product development, as well as 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 some funding from other ministries and counties. The latter is most often earmarked for specific sectors and projects. For its NTO role, Innovation Norway, which receives NOK 178 million in 2020 (representing a reduction of 22% compared to the annual funding in 2015-2019). In addition to these earmarked funds, Norwegian tourism companies received approximately NOK 315 million in 2018 from various funding sources in Innovation Norway, to develop their activity.

One of the key challenges facing the Norwegian tourism sector is its relatively low level of value creation and profitability compared to that of other industries. This is due to factors such as a low share of high value-added tourism products, seasonality and lack of co-operation in and between destinations. Certain destinations also face the challenge of tourism developing in an unsustainable way, with overcrowding becoming a major issue at certain times of the year.

In 2017, the Norwegian Government and Parliament established the following national policy priorities for developing Norwegian tourism: i) establishing sound framework conditions for business activity, ii) developing a sustainable tourism industry, iii) increasing co-operation between stakeholders, iv) continuing to promote Norway as a tourism destination, v) increasing knowledge and expertise in the tourism industry, and vi) improving accessibility to boost competitiveness. The Government has also previously developed a tourism strategy based on agricultural resources (2017), which is now being implemented, focusing on Norway as a destination with unique food experiences.

The Government has recently increased public investments in infrastructure in Norway, focusing on developing safer, more efficient and greener transport systems. In order to improve co-ordination and effectiveness, the structure of Norway’s DMOs has been amended, with the private sector now taking a leading role following principles set out by the Government. Seven new larger entities have been established to secure more reliable and stable financial arrangements, as well as facilitating co-ordination between the local tourism industry and local public authorities.

In 2019, a key policy development was the launch of the cultural tourism strategy. The work was led jointly by the Ministry of Culture and the Ministry of Trade, Industry and Fisheries with input from many other interest groups. This strategy recognises the potential to further combine culture and tourism, and focuses on developing more cultural-based tourism products. With a budget of NOK 16.4 million the goal for the strategy is to strengthen Norway as an attractive cultural destination, resulting in higher added value, reductions in seasonality and more jobs across both sectors. The strategy has four priority policy areas: i) strengthening Co-operation among culture and tourism stakeholders, ii) addressing a need for more knowledge of cultural tourism, iii) developing and adapting cultural tourism products to make Norway more attractive as a destination throughout the year, iv) increasing promotion of the cultural offer to strengthen Norway as a destination.

The Government is also taking steps to mainstream sustainability. This includes the creation of a Sustainable Destination certification scheme, which enhances destination management and aims for long term progress. The sustainability standard is internationally recognised through the Global Sustainable Tourism Council with indicators regularly updated by certified destinations (Box 3.9).

Another action to increase sustainability includes the development of visitor management measures in fragile natural areas by providing information, signage and simple infrastructure. As part of this effort, the Government will market a selection of trails as National Hiking Trails. The objective is to make these trails more robust and accessible, and thus more attractive for travel and business activity. Beyond that, local stakeholders such as municipalities and business communities are encouraged to develop solutions that facilitate and contribute to sustainable value creation.

Fishing tourism is a growing source of income in many coastal communities in Norway. The development of fishing tourism is encouraged as a whole, but it brings some challenges linked to a limited understanding of its extent, and illegal exports of the catch. This leads to pressure on coastal fish stocks and also local conflicts between professional fishermen and the fishing tourism businesses. As a result, in 2018, the Government set up a regulatory framework for fishing tourism with the goal to ensure the sustainable management of fish resources through a better overview and control of fishing tourism. The regulations include a new registration system for fishing tourism companies, a new reporting scheme, and an increase in export quota for guests of registered companies. This framework will be revised by the Government in 2020, in order to improve its functionality. A three-year national research project on fishing tourism is about to be completed, will provide valuable insight into the environmental and the socio-economic impacts of fishing tourism.

Recently, the Government has taken the initiative to develop a national strategy for tourism in Norway. The strategy work will be led by Innovation Norway, in co-operation with a wide range of stakeholders, representing regional authorities, researchers, the tourism industry and others. The goal of the strategy is to ensure a more sustainable and profitable tourism sector in Norway. The final strategy report is due by the end of 2020.

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