Inflation is a double-edged sword for the tourism domain, says Luxembourg For Tourism CEO Sebastian Reddeker Photo: Guy Wolff

Inflation is a double-edged sword for the tourism domain, says Luxembourg For Tourism CEO Sebastian Reddeker Photo: Guy Wolff

For more than two years, the tourism industry has had to weather a storm of uncertainty. Luxembourg for Tourism (LFT) CEO Sebastian Reddeker identified this period as the perfect opportunity to re-evaluate the agency’s trajectory.

Two and a half years after the start of the covid-19 crisis, is tourism returning to a somewhat normal state?

: We’d have to think about what is considered ‘normal’. In 2019, Luxembourg’s tourism was one of the strongest in Europe. But there were also many destinations worldwide that reached their limit in 2019. Barcelona and Venice are classic examples of this. This made us think about over-tourism.

In Luxembourg, we thankfully didn’t have this issue. Considering this scenario, you had to ask yourself what kind of tourism you would like to return to. I think growth is important. In 2019, we recorded 2.8m overnight stays, which dropped to 1.5m in 2020 and then rose again to 2.1m in 2021. So we’re not doing too badly. Recovery won’t happen before 2025, but it’s faster than expected. The first months of 2022 indicate that we will have a relatively strong summer. At the moment, we have 2-3% growth per week in searches but also booking enquiries, which is a good sign for the July and August period.

Before the pandemic, there were plans to turn Luxembourg into a centre for business tourism. With businesses less ready to spend their budget on sending employees on business trips, what is your strategy to attract them here?

First of all, a special department was set up a few years ago--the Luxembourg Convention Bureau--which focused on all the Mice [meetings, incentives, conferences, exhibitions] topics. They work on covering all the conferences that are allocated internationally and that are organised in Luxembourg. They also manage the intra-Luxembourg traffic. It’s important to see both aspects on the same level.

Sometimes, it becomes somewhat of an egg-or-chicken question. Was it leisure--private trips--that inspired someone to have their business or conferences here in Luxembourg, or was it the business for which someone came here that inspired them to stay a few days with their family? They balance each other out. That’s why I’m happy that we have the Luxembourg Convention Bureau that takes care of the Mice domain and the LFT that takes care of the leisure part. I think the connection is important. Sure, there are less business tourists at the moment, but we also see that many hotel owners in the city put a lot of effort in filling this gap with leisure tourists.

How do you encourage these business tourists to explore more of the country than Luxembourg City?

We, at LFT, will never tire to repeat this in our communications: there isn’t just Luxembourg City. The city is great, but you can drive to other regions within an hour too, either by car or even free public transport. Granted, some are more easily accessible than others, but there is a lot of variety outside of the capital that can be combined with the city. Whether it’s hiking in the north or the Mullertal, or a drive along the Moselle, or a trip to Esch, the European culture capital of 2022, you can reach all this from the city.

We also communicate about the overnight possibilities in the countryside. We put up ads in the airport, for instance, to showcase both the countryside but also our application [VisitLuxembourg], which also shows what’s outside of the city. We have our travelling magazine, Luci, too, which we distribute to our partners and campaigns. It collects not just stories about the city but also stories that combine urban and rural scenes. Luxembourg has a great advantage compared to other business trip destinations, like Paris or Frankfurt: you can easily travel to completely different landscapes.

Luxembourg is known on a global level for its financial and banking sectors. How do you export the culture too?

Of course, everything that is tourism marketing is also nation branding. Tourism has a lot to do with influencing the image of the country in a positive way, and I think that it’s to our benefit that tourism communication in general is apolitical. It’s about living, co-living activities. I believe that it’s important to go one step further than pure information in tourism communication. It’s not just about introducing hotels, restaurants, etc., but it’s also about describing the experience of living here. That is what travellers are looking for these days. They can find classic information online but prepared information like this--that’s the whole craft of national communication these days. The image of the national economy isn’t bad per se, it belongs to Luxembourg and the life here. But there are other things, and to highlight these is, in my opinion, very important.

The regions are very different, with the north and east attracting the most tourists. How do you plan on better balancing the tourist population among all regions?

We don’t feel like we’re forced to do this in Luxembourg because the regions in themselves still manage the flow in tourists. We’re not forced to use a lot of communication campaigns [to distribute to the incoming flow of tourists] like other places. Nevertheless, that doesn’t mean that we shouldn’t showcase all the choices to our visitors. That is something our app does, for instance. I think that there too, the travel stories [in the Luci publication] are important because they show different combinations of things to see depending on what you’re interested in. If you’re into outdoor stuff, we have clear strengths in some regions. If it’s industry culture you’re after, then you should drive down south. If you’re into castles, or as we call it ‘daydreams’--easy-going, countryside, somewhat dreamy--then it’s the Guttland [west and centre] you should be heading to. If you’re more into wine, gastronomy, then, of course, it’s the Moselle region.

An active distribution isn’t needed yet, but it might come. We already had the first signs of this in 2020, when the Mullertal was completely crowded in some points. Gaining visitors is, of course, positive, but can be negative. This is why, in 2022, we didn’t even advertise some parts of the country. That works by not sending out communication about a specific spot. The result might take a while, but eventually we notice that less tourists visit that area.

Luxembourg is rarely the first choice. This isn’t a problem; the second or third choice has a chance too.

Sebastian ReddekerCEOLFT

Are there any strategies to keep the attention of locals and tourists on Luxembourg when faraway destinations are available again?

They will stay interested--that I’m pretty sure of. We see that flights towards us are increasing. We have a clear growth on the flight level, especially from the UK, Germany, and Italy. That goes both ways, though. In general, the aviation industry is seeing a boom in activity because it was one of the sectors that suffered the most during the pandemic.

It’s not our aim to give people who leave Luxembourg a bad conscience, though.

Then, on an international level, Luxembourg is rarely the first travel destination or the first choice. This isn’t a problem because the second or third choice has a chance too, especially when it comes to short trips. And we have to ensure that when people think about what they can do during big trips, Luxembourg is in that decision pool.

How do you approach sustainability in tourism?

It’s a topic that comes up a lot. Many people don’t know what this means concretely. I think it’s more than not changing towels during a stay. Sustainability in tourism is a hot subject. Yet tourism is an economic domain, so we have to look at how we can change the business model in a way that we can still advertise the beauty of our destinations in 20 years while being able to live from it. It’s not easy, to be honest. We are currently intensively focusing on what it means for us in Luxembourg because what it means for Switzerland or for Slovenia might be completely different. But it’s right that we have to work on the subject of sustainability in Luxembourg. It’s part of our tourism strategy but applying it to real life certainly is the most difficult task.

The other big topic then is digitalisation…

Yes, it is certainly the second big challenge alongside sustainability. The issue is that, on the one hand, we have clients who are very digitalised--around 80% of all bookings are made online in Luxembourg. On the other hand, we have a sector that is not yet on the same level of digitalisation. I think we have to create an understanding that everything begins in the digital world. It ends, of course, in the physical world, but it starts in the digital world. And the big challenge for us is to see that our offer is digitally adequate for anyone who works in the branch, like hotel managers.

Then, as a small destination, we also have to combine our efforts. Existing as an infinite number of separate websites on the market isn’t viable anymore. That’s why VisitLuxembourg has now set up a portal which will have a much greater impact in the market once it’s fully established. Each region has its own space on the platform, but everything flows together in the site and, therefore, all these sites have a stronger presence online. Otherwise, we’d stand no chance.

Do you believe the energy crisis and the war in Ukraine will have big impacts on tourism in Luxembourg?

For now, no. It’s clear that the war in Ukraine in itself does not have an immediately recognisable negative impact on tourism in the grand duchy. We see a certain reluctance among international tourists, like those from the US. That’s the same for our European neighbours. These travellers hesitate to visit Europe, but it doesn’t affect us too much because we have a relatively small percentage of international tourists. What is much more complicated is to predict the cascading effects of the war--like inflation, and thus energy prices. We thought people would want to spend the savings they put aside during the pandemic, but now, with the high inflation, many households see their savings dissolve into thin air. That’s something that must worry us because we see that, on an international level too, travelling this summer will be pretty expensive.

And so people turn towards nearby destinations…

Inflation is a double-edged sword for us. On the one hand, Luxembourg is a second-tier destination, and where do you generally cut [when cutting expenses]? Not the first destination, but ones after that. So, there, we have to see to it that we position ourselves well enough. But then, of course, it’s also a positive thing because short trips, city trips, regional trips are something you can also do with a small budget. So, now, we can only wait to see how the summer will go here. We have to be cautious, but as a short-distance destination, we have potential to attract a lot of people.

Are you preparing for another covid wave?

Aside from the fact that we hope it doesn’t come to this, I think that, in the last two years, we’ve learned how to manage it. LFT has learned to be flexible, to throw out communication plans from one day to the next, to cancel some things and set up others on short notice. It’s not easy, but we’ve learned to do it. So we, as an agency, are prepared. The sector in itself should also have learned to react to this type of event. But in reality, if another lockdown were to happen--which we naturally don’t hope for--then we just have to say it as it is: there will be no budget left. I don’t know if businesses are able to weather through a new lockdown or a crisis of this size in combination with everything else that currently is happening. What we thought we had before the covid pandemic--stability and plans over three, four, five years--isn’t there anymore, and I don’t know that it will ever come back. Rather than that, I think we’ll find strategies to deal with eventual insecurities.

How do you deal with the possibility?

It’s a challenge that worries us on a daily basis. We work hard to find strategies to answer these issues in the best way possible. That’s not easy. Tourism is connected to everything, so anything that happens will have an influence on the behaviour of travellers. Whether it’s a pandemic, an energy crisis, a war, an inflation--everything in one way or another impacts travelling. That’s why it’s also one of tourism communication’s roles to show how important it is to keep our borders open. It’s the same for energy and climate issues: I think that travelling is explicitly bound with these topics, and we have to be responsible in our behaviour too.

What is still missing in Luxembourg’s tourism?

There are still some gaps in public transport connections. Free public transportation is good, but people really have to think hard about how to travel between different regions here. Another issue is that during the weekends, a lot of connections are missing because the schedules are planned around commuters, when tourists are there on the weekend. Another recurring subject is the development of accommodation in the countryside. In the capital, we have a lot of capacity, but in the countryside, there have been a few traditional places that have closed. Then, there is the need to improve cycling infrastructures in the grand duchy--there is surely something to be done there. But in general, we can’t really complain.