Airbnb shakes up hospitality sector in Lapland capital

The red-hot accommodation business in Rovaniemi, northern Finland, serves as a test case for a new tourism model driven by the sharing economy – as traditional hotels cry foul and the construction sector warns of a housing bubble.

Rovaniemi, capital of Finnish Lapland, has just 60,000 permanent residents but attracts half a million visitors a year, with double-digit growth for a third year running – with most tourists arriving during the winter - writes

A shortage of hotel beds in Rovaniemi during the peak season has spurred the usage of sharing economy services such as Airbnb, especially as increasing numbers of visitors are seeking flats or houses rather than hotel rooms during their stays. Growth in this sector has been rapid, as much as 150 percent a year.

Nearly half of all new flats built in Rovaniemi are being snapped up by investors, estimates local Kiinteistömaailma real estate agent Mika Lehtiniemi. Most of these are then hired out as short-term lodging. And the investors include middle-income locals hoping to cash in on the tourist accommodation boom. Small firms focusing on hiring out properties through Airbnb are also springing up in the town.

This autumn, as the pace of apartment production in Rovaniemi steps up and outpaces population growth, the Confederation of Finnish Construction Industries RT warned of the risk of a housing bubble in the area. However analysis of the situation is tenuous, as no-one has comprehensive data on the extent of the sharing economy, not even tax authorities.

According to the San Francisco-based Airbnb, last year there more than 12,000 stays at some 500 Airbnb sites in Rovaniemi, up from 5,000 the year before. That growth rate of 140 percent shows no sign of slackening this year – on the contrary.

Rovaniemi – 2nd only to Helsinki

According to a report by PricewaterhouseCoopers (PwC), commissioned by the Ministry of Economic Affairs and Employment, the value of the sharing economy in Finland’s accommodation and rental sector with multiply tenfold within the next four years to some 208 million euros.

Among the investors in Rovaniemi is a tour operator that brings Israeli tourists to Lapland. The company has bought a block of flats in the town centre and is now renovating it as an apartment hotel for the winter season.

Maria Hakkarainen, a researcher at the University of Lapland who has studied the sharing economy, tells Yle that besides Helsinki, Rovaniemi now has Finland’s largest number of private lodging options.

By comparison, Oulu, the largest city in northern Finland with more than 200,000 residents, had fewer than 100 Airbnb sites, less than a quarter of Rovaniemi’s total. Helsinki meanwhile is in a category of its own with some 3,000. Airbnb say they racked up about 87,000 visits last year.

Hotels demand level playing field

Some Rovaniemi hotel directors admit that those offering private accommodation have saved the local tourist industry’s winter season at times when hotels have been fully booked.

However they are not happy about the lack of regulation of accommodation via sites such as Airbnb. They argue that they have to pay as much as double to rent accommodation properties while facing strict regulations such as fire-safety specifications regarding curtains and other furnishings. Meanwhile those offering space through sharing platforms such as Airbnb are not subject to any inspections and do not need to notify authorities. Hotels are subject to fire inspections twice a year, but apartments, including those offered via Airbnb, are not required to have any.

Sometimes it is difficult to draw the line between an apartment hotel and a block of flats being let out via Airbnb, though. Only a unanimous decision by a housing cooperative can forbid short-term rentals within a building.

“We have no means to intervene in the rental of flats,” says Pentti Ylitalo, who oversees real estate operations for the city of Rovaniemi.

The European Commission says that the sharing economy can create significant employment and growth in the EU if it is developed responsibly. In May, the Finnish government launched a study of the sharing economy, which is still underway.

Read more news of Helsinki on our site.

Laplandcapital Airbnbshakes
If you notice an error, highlight the text you want and press Ctrl + Enter to report it to the editor
2 views in november
I recommend
No recommendations yet


Post your comment to communicate and discuss this article.

A citizens initiative demanding the end of diesel tax met its target for 50,000 signatures in just one day, six months ahead of schedule. Cities across the world might be looking for ways to reduce the use of harmful diesel engines, but in Finland there appears to be a groundswell of popular support for the dirty fuel. On Monday Tuulikki Paavola published a citizens initiative demanding an end to Finland’s diesel tax was published, with the goal of getting...
The winners of the first edition of the European Capital of Smart Tourism competition were awarded 7th of November at a ceremony in Brussels, on the occasion of the European Tourism Day. The title for 2019 was awarded to two cities: Helsinki and Lyon. Cities of more than 100.000 inhabitants were eligible in the first edition of this competition. 38 cities from 19 EU Member States applied, but Helsinki and Lyon stood out for their innovative tourism measure...
Alexander Stubb (NCP), a vice-president at the European Investment Bank (EIB), has hinted at the possibility of returning to politics after losing the race to become the lead candidate of the European People’s Party (EPP) to Manfred Weber of Germany. Stubb received more votes than expected but lost to his rival candidate by a clear vote of 127 to 492 at EPP Congress Helsinki on Thursday. “I got a very good feeling [from the campaign], I must admit,” the fo...
The Finnish government will introduce no amendments to legislation on patient data during this electoral term, assures Annika Saarikko, the Minister of Family Affairs and Social Services. Saarikko and Kai Mykkänen (NCP), the Minister of the Interior, have participated actively in public debate concerning a legislative proposal that, according to Helsingin Sanomat, has been drafted in secrecy and would grant police significantly wider access to sensitive pa...
School groups could in the future use public transport services in the Helsinki region free of charge when travelling with a teacher, according to a decision made by the Executive Board of Helsinki Region Transport (HSL) on 30 October 2018. The final decision on transport charges, including tickets for school groups, will be made by the HSL General Meeting on 27 November.  From the beginning of 2019 onwards, municipal school administrations would no longer...
Finland has dropped to eighth in the world in the latest version of a ranking of countries according to their English language skills. Finns are now the worst English-speakers in the Nordic countries, according to the EF English Proficiency Index. The 2018 version of the ranking puts Finland in eighth spot, with western neighbour Sweden topping the comparison. This year’s result is the weakest Finland has achieved in the ranking, which has been published e...
The theme of next month's Independence Day ball at Helsinki's Presidential Palace will be climate change and environmental issues. The theme of this year's Independence Day reception will be climate change and the environment, according to the Office of the President of the Republic. Finland's most exclusive social occasion is just one month away, and the Office of the President has started sending invitations to some 1,700 guests for an evening that tradi...
The day's papers report on unsolved thefts, free head lice medicine for families and Angela Merkel's visit to Helsinki. Daily Helsingin Sanomat reports that most larcenies go unsolved in Finland. According to statistics by the Police University College, police were able to clear 3,150 offences between January and September of this year, while about 41,500 remain unsolved. In 80 smaller municipalities, especially in Lapland and Åland, the police did not sol...
Finland's Tax Administration reports that 15,000 more eligible taxpayers declared no taxable income in the last two years, putting the total past 160,000 in 2017. The number of eligible taxpayers who reported no taxable income in Finland has risen by 15,000 in the last two years to a total of 161,000 in 2017. "Most of the people declaring no taxable income are...