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Faroese tourism and hospitality sector set back several years — House of Industry

The ongoing health crisis has resulted in the Faroese tourism industry being set back several years, with severely reduced demand making it unlikely for it to regain pre-Covid levels of business activity within the near future.

Little more than a year ago, 2020 was expected to be the best year ever for the Faroese tourism and hospitality sector. That all changed as the global health crisis quickly turned progress into regress while leading to a setback that could prove worse than the most pessimistic predictions, the Faroese umbrella trade organization House of Industry warns.

Back in mid-March 2020, newly imposed restrictions were expected to last for about a year. With that year about to pass now, there is still nothing to suggest that the tourism and hospitality business will get back to normal anytime soon, House of Industry noted last week.

In an article published on its website, the House of Industry made reference to recent statistics for the Faroese tourism and hospitality sector, whose findings include the following:

The number of passenger traveling through Vagar Airport in 2020 was the lowest in over ten years, totaling just under 180,000, an almost 58-percent decline on 2019, when the total number hit roughly 424,000.

The total number of air passengers last year even amounted to about 20,000 less than the corresponding figure for 2010, when almost 200,000 people passed through the terminal.

Last year’s worst month for air travel in the Faroe Islands was April, when the tourism industry was severely affected by newly introduced Covid-related restrictions. That month, less than 2,400 people traveled through Vagar. The best month of the year, as usual, was July, yet with little over 32,000 travelers, a far cry from the almost 64,000 registered during the same month in the previous year.

The number of booked overnight hotel stays in 2020 also hit the lowest point in many years. In 2013, the total number of overnight stays amounted to 132,265 and for the following six years, there was a steady increase, peaking in 2019 at almost 198,000. But in 2020 the figures tumbled to below 2013 levels, with less than 109,000 overnight stays registered, a 45-percent decline compared to 2019.

With the demand in 2019 reaching at an all-time high, Faroese hotels came under considerable pressure, and as the industry expected demand to further increase the following year, two new hotels were built in Tórshavn — Hotel Brandan and Hotel Hilton Garden Inn Faroe Islands — while Hotel Føroyar opted for a substantial expansion of its accommodation capacity.

As the situation unfolded, however, hotels soon found themselves dealing with the opposite problem with the health crisis literally killing off tourism.

According to the House of Industry, the total payment of wages for hospitality sector employees was reduced by one-fifth in 2020 compared to the previous year, notwithstanding that the total wage expenditures in the Faroe Islands increased by 2.1 percent during the same period.

The decline in wages within the hospitality business is beyond comparison to any other industry sector in the Faroe Islands, the House of Industry pointed out.


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