From pandemic to transition – lessons for a strengthened tourism industry
The COVID-19 pandemic had a severe impact on large parts of Sweden’s tourism and hospitality sector. The crisis demonstrated how rapidly conditions can change, but also underscored the critical importance of a resilient structure for the sector's survival and recovery. This report analyses the effects of the pandemic and distills key lessons learned, while also identifying crucial areas for future policy development.
Tourism plays a central role in the Swedish economy, regional development, and the attractiveness of places. The aim of this report is to provide insights that can contribute to a more resilient and sustainable tourism industry in the future. Both the public and private sectors have essential roles to play in this endeavor.
The Support Schemes Contributed to an Accelerated Rebound
Our analysis shows that one-third of all companies in Sweden received some form of government support during the pandemic. For the tourism sector, the proportion was even higher—between 40 and 70 percent received one or more forms of support. The analysis also indicates that companies which received support experienced a somewhat faster recovery in terms of turnover. The sectors most severely affected were Culture, Entertainment and Recreation, as well as Accommodation and Food Services. Geographically, the hardest-hit areas during the first year were Rural Municipalities with tourism activity, Metropolitan Areas and Rural Municipalities more generally. Commuter municipalities near larger cities were relatively less affected. Among our destination municipalities, companies located in Gotland and Vimmerby experienced the most significant impact.
Signs of Recovery
The pandemic had a somewhat greater negative effect on tourism enterprises compared to tourism-related retail businesses in terms of turnover. Furthermore, larger cities were disproportionately affected in terms of bankruptcies, but also stood out in regards to the share of growing companies. An increasing trend of bankruptcies among firms that had received temporary tax deferrals was also observed—something that warrants further monitoring. Finally, we note signs of recovery in 2022 for tourism companies in terms of both turnover and new business registrations. This aligns with our interview findings, where respondents highlighted a turning point in mid-2022 due to the reopening of international borders, though domestic tourism remained dominant. Nevertheless, many noted that staff shortages limited the pace of recovery.
What Happened to Employment?
In the first year of the pandemic, employment within the tourism industry dropped sharply. The decline was most pronounced in metropolitan areas, which also experienced the strongest recovery. In rural municipalities with a strong tourism profile—where tourism is especially significant for employment—the pandemic led to notable job losses in both the tourism industry and tourism-related retail. These losses had not yet been fully recovered by the end of 2023.
Our analyses show that many employees left the tourism industry during and after the pandemic. Of those who worked in the sector in 2019, only half remained in 2023. However, a corresponding analysis for the period 2015–2019 reveals a similar rate of employee outflow. Thus, there is no clear evidence that the pandemic caused an unusually high departure rate from the tourism workforce.
Lessons for the Future
The experiences from the pandemic offer an opportunity to think long-term and strategically—to build a sector that not only recovers, but is also better prepared for future shocks.
The pandemic response measures were largely general in nature and not specifically targeted at the tourism sector, despite it becoming clear early on that this sector was among the most severely affected. However, regardless of industry, it is important for the public sector to act quickly in an urgent situation. Experience shows, though, that generic solutions are insufficient in an industry characterized by seasonal fluctuations, small-scale operations, and simultaneous production and consumption, with no possibility of inventorying and selling later.
The design of the support schemes did not account for the structural characteristics of the sector. Notably, early turnover-based supports relied on comparisons of monthly revenues with the same month in the previous year. For many seasonal businesses, this meant that substantial income losses during peak season did not qualify for support if the same month the year before had been weak.
Moreover, sole proprietorships—common in the tourism sector—were initially excluded from several key support measures. Smaller operators also often faced challenges in meeting documentation requirements or minimum turnover thresholds. As a result, the support mechanisms did not always reach those who were most dependent on them.
It also became evident that businesses with a broader product offering and a diversified customer base were better positioned to withstand the crisis. The ability to quickly shift focus—for instance, from international to local visitors or from physical to digital services—mitigated economic impacts in some cases. This variation in adaptability highlights the importance of strategic flexibility, both within individual businesses and across the tourism sector as a whole.
Enhanced National Crisis Preparedness for the Tourism Sector
Interviews with stakeholders emphasize the need for stronger national crisis preparedness within the tourism sector. Many reported unclear responsibilities during the pandemic and a lack of established frameworks for collaboration among government agencies, regional actors, and the private sector. Although temporary dialogue forums were created during the crisis, several respondents stressed the need for more permanent and stable coordination structures.
International examples show that fixed crisis forums and coordinated action plans can strengthen both acute crisis response and long-term sectoral recovery. Such an organization would clarify responsibilities and improve coordination between national, regional, and industry actors during serious disruptions.
The Crisis as a Catalyst for Rapid Sustainable and Digital Transformation
Despite the pandemic’s serious consequences, it also served as a catalyst for transformation. Tourism businesses have increasingly adopted digital solutions, such as booking systems, communication tools, and new service formats like digital tours. Many also reoriented their offerings towards more sustainable and locally based experiences.
The analysis also shows that a relatively large number of new businesses were established in the sector during the pandemic, despite the challenging environment. This signals strong entrepreneurial capacity and innovation—qualities that are valuable even under normal circumstances. The crisis demonstrated that transformation is both possible and can be implemented swiftly.
Better Data for Better Decisions
A key lesson from the pandemic is that decision-makers often lacked sufficient information and access to up-to-date, reliable data to act swiftly and accurately. Much of the available data was outdated, geographically limited, or did not comprehensively cover tourism.
The pandemic has highlighted the need for faster and more detailed statistics on tourism developments. There is a call for tools that allow real-time monitoring of turnover and employment, particularly at the local level. Improved data would enable policymakers and industry representatives to respond more effectively to future crises or changing conditions, such as climate impacts.
Policy Recommendations for the Future
Based on these lessons, the report identifies two key areas for future policy development:
Develop More Targeted and Adapted Crisis Support Measures
Future support measures should take greater account of the specific conditions of the tourism sector, including business structures, seasonality, and industry-specific characteristics. It is crucial that the Government build future systems on insights from the pandemic—learning from both what worked and what did not. However, there must be a balance between targeting and administrative feasibility. Administrative simplification options for businesses should also be explored to reduce the administrative burden, without compromising security. This is especially relevant in a sector dominated by small enterprises with limited time, resources and administrative capacity.
Strengthen Statistical Capacity for Quicker and More Targeted Decision Support
To enable more knowledge-based and proactive policy-making, improved statistical capacity is essential. This includes quarterly follow-ups, indicators for seasonal variations, and more granular geographic data. In addition, statistics must better capture the full scope of the tourism industry (including platforms such as Airbnb). With an enhanced data foundation, both crisis response and long-term development efforts can become more effective and better targeted.
Concluding Reflections
The pandemic has shown that the tourism sector is vulnerable—but also that it possesses considerable capacity for adaptation and renewal. The findings of this report emphasize that crises can become opportunities for learning and transformation. They can contribute to the development of a more sustainable and competitive tourism sector. By developing a more flexible, knowledge-based, and coordinated governance system, Sweden can create stronger foundations for a thriving tourism industry—both in times of crisis and in normal conditions.
