Norway’s currency, the krone, weakened again on Tuesday in line with another fall in oil prices. That put smiles on the faces of those working in the country’s tourism industry, as Norway’s notoriously high prices became at least a bit easier to swallow for foreign visitors.
The krone was trading at NOK 7.75 to the US dollar by mid-afternoon, after oil prices tumbled to around USD 45 a barrel. Since the oil industry is Norway’s biggest revenue generator, the dive in oil prices has led to a severe weakening of the Norwegian currency, not least after the central bank cut interest rates last month.
It means, however, that a hotel room priced at NOK 1,200 a night in Norway now costs USD 155 for an American tourist, down from USD 200 when the kroner traded at just NOK 6 against the US dollar last year. The relative cost of restaurant meals, transportation and shopping in Norway has also become less onerous to visitors from the UK, the EU and elsewhere.
Per-Arne Tuftin, tourism director for Innovation Norway, told Dagens Næringsliv (DN) on Tuesday that the weak Norwegian kroner is expected to increase the number of overnight stays by foreign tourists by around 5 percent this year. “The weak kroner and increased interest in Norway will contribute to ongoing growth in 2015,” Tuftin told DN.
The country already saw an increase of 3 percent this year in the number of overnight stays by foreign visitors last year, according to a new survey by Innovation Norway. That translates into NOK 1.5 billion kroner, reported DN, boosting the total value of the industry to NOK 27 billion through last year’s summer season.
The growth remains relatively small given the roughly 5 percent increase in global tourism, but Norway appears to be catching up. The weaker kroner, Tuftin notes, may also prompt more Norwegians to spend their holidays at home since overseas trips have become more expensive.
The biggest increase in foreign visitors in Norway came from the US, up 34 percent, a rate believed to be fueled by the stronger US economy and a surge of tourists who saw the Walt Disney movie Frost, and wanted to see the country on which it was based.