City marketing turned Amsterdam into a wild west of tourist shops and created an overheated housing market.
City marketing aims to attract and position cities as attractive destinations, ranging from increasing tourism to becoming an investment hub for business. Sometimes however, extensive usage of city marketing through aggressive advertising and promotions, can backfire. Amsterdam is a prime example of how successful efforts to put the city back on the global map, can turn into a nightmare where family-owned businesses make place for Nutella and tourist shops. A place where natives feel disconnected and housing prices become unaffordable. What went wrong in Amsterdam?
I Amsterdam discontinued
In October 2018, the Amsterdam city council decided that the famous I Amsterdam letters at the National Museum (Rijksmuseum) were to be removed. Coalition party GroenLinks, who saw support from other parties, voted that the letters and the affiliated marketing campaigns had to be discontinued. The announcement came as new figures revealed from the The Netherlands Board of Tourism & Conventions (NBTC) showed that tourism was growing more rapidly than initially anticipated, seeing the number of tourists in the Netherland groom by 50 percent in coming years, reaching 60 million by 2030.
The city of Amsterdam initially anticipated 23 million tourists by 2025, however, these figures were conservative estimates in light of recent figures, the Dutch newspaper Het Parool commented. Managing director at the NBTC warned that Amsterdam had reached a critical tipping point where tourism should become second, recommending more attention to the city’s inhabitants. Faction leader for GroenLinks, the city’s green party, Femke Roosma said that “I Amsterdam” portrayed more than just tourism. She commented that the letters have become a symbol for individualism, rather than the city’s strive for solidarity and diversity.
The Parool pointed out that the marketing campaign was intended to improve the city on international ranking lists for attractive destinations. Years prior to the campaign, Amsterdam lost a lot of its shine, with policymakers desperately looking for novel ways to boost the city’s standing. Roosma continued saying that it was time for residents to reclaim Amsterdam, whereas city marketing represented capital, morphing the city into a product.
Introducing I Amsterdam
In 2004, the city of Amsterdam launched a contest, where agencies could bid to create the next city marketing campaign. Over the years Amsterdam had developed quite the reputation. Still traumatized by its latest attempt back in the 1980s, it was time for a rebrand. The city lacked the landmarks of major destinations such as London with the Big Ben, Paris with the Eiffel Tower or New York with its impressive skyline. A creative campaign had to be developed that would put the city back on the map once again.
The agency KesselsKramer won the bid. KesselsKramer was no stranger to large marketing projects, as they were the driving force behind the campaign of discount telecom provider, Ben. Ben leaned heavily into personifying its clientele, a trend among advertisers, Dutch newspaper Het Parool commented. Amsterdam meanwhile was home to 178 different nationalities. Nationalities that could be put in the spotlight. The initial proposition was pretty straightforward and befitting KesselsKramer. A photobook and a dedicated exposition. But the real showpiece, that would redefine city marketing, human sized letters at the city’s top attractions.
The initial response was mixed, because the idea to place giant letters in the city was pitched twice. In the future, Het Parool noted, multiple people came forward as the inventors of the concept. The mixed reception didn’t dissuade the letters from coming to life. They became an instant hit. City marketing bureau, Amsterdam Marketing the newspaper cited, found that an average of six thousand selfies were taken on a daily basis with the I Amsterdam sign. The visitors themselves became ambassadors for the city. The success was unprecedented.
In 2005, The Parool spoke with then alderman for the city of Amsterdam, Frits Huffnagel, who responsible for city marketing, introduced the city to the I Amsterdam campaign. Huffnagel was characterized by one-liners, devoid of fluff. A proponent of embracing joy not sadness. His appointment wasn’t met with open arms however, the local labor party, PvdA, opposed much disdain from Huffnagel, who considered a symbol for left arrogance, stating he lacked substance. Whatever your stance on the political spectrum may be, Huffnagel was ready to transform the city.
His job wasn’t bound to be easy as he inherited one of the toughest dossiers; Finance, Economy IT and Schiphol, one of Europe’s busiest airports, the job ahead was tough. Despite Huffnagel’s seemingly down-to-earth demeanor, he had a knack for flair. The city supported Fashion Week, with Huffnagel commenting that the event helped forge a strong image for the city and its hospitality industry. Combined, the I Amsterdam letters strengthened the city’s brand. Meanwhile, Huffnagel was busy crafting the city’s international allure.
Growing tourism numbers
The I Amsterdam campaign was an undeniable success. Tourism numbers grew rapidly after its introduction. In 2007, Amsterdam was an upcoming tourism hotspot, seeing 4.7 million hotel guests, with visitors staying longer on average. The number of nights spent at hotels grew to a record-breaking 8.7 million. The municipality noted that tourism volumes were growing exponentially several years in a row. The growth comes after a dip in 2003, a year before the launch of the I Amsterdam campaign. Between 2004 and 2005, the number of visitors grew by 9 percent, and in 2006, by another 6 percent compared to 2005.
Dutch tourists have contributed greatly to the number of hotel stays. An additional 155,000 Dutch citizens visited the capitol in 2006, a growth of 25 percent compared to the previous year. Additionally, the number of European visitors grew exponentially, with an additional 51,000 Spanish and 20,000 British tourists coming to Amsterdam. Visits were not limited to Amsterdam, as the neighboring regions such as Flevoland and Zaanstreek saw a strong rise in the number of guests.
The tourism sector in Amsterdam encountered a speed bump as the world was entering a global recession. After years of near infinite growth, the city experienced the first, significant, drop in the number of visitors. In 2008, the number of hotel stays decreased by 6 percent compared to 2007, with the first two months of 2009 seeing a drop of 12 percent compared to the same period the previous year. The municipality noted that the sector is prone to shifts in the economic climate with the tourism industry being the first to experience the effects of a cooling global economy.
British, American, Spanish, and Dutch tourists skipped Amsterdam, leading to the drop witnessed over the course of 2008. The drop was especially noticeable with Spanish and American visitors, with this tourist cohort experiencing a drop of 15 and 18 percent respectively. The lowest figure in over a decade, the municipality commented. The drop was short-lived however, as over the course of 2010, tourism volumes bounced back to record-breaking volumes once again.
In April 2011, the municipality reported that the number of hotel guests and overnight stays increased by 14 percent in 2010 compared to 2009, double the national average. The strong recovery could partially be attributed to the largest freely accessible maritime event in the Netherlands, SAIL, which is held once every 5 years, attracting countless visitors to the city of Amsterdam. In part, the number of visitors could maintain its momentum, thanks to increase in hotel capacity, allowing for more guests to arrive during the peak holiday months such as August.
Across the board, from American to British tourists, visitor numbers grew once again. Amsterdam however was not alone in seeing a growth in the number of visitors. The entire continent over Europe experienced increases in tourism levels over this period. In 2011, the number of international arrivals grew beyond expectations, the bureau for tourism at the United Nations (UN) discovered. In the first eight months of 2011 the number of international arrivals grew by 4.5 percent.
In 2014, ten years after the introduction of I Amsterdam, the campaign was seen as one of the best city marketing examples the Netherlands had ever seen. Machteld Lichtvoet from Amsterdam Marketing, who saw residents skeptical against the campaign, never expected the campaign to become such a success and that it would stand the test of time for so long. A decade in and the campaign was still going strong. Reason for this being that I Amsterdam is more than just a slogan, it was the entire brand for the municipality of Amsterdam.
The rise of low-cost airlines
These developments don’t exist in a vacuum. As Amsterdam and other major cities across Europe saw tourist numbers grow exponentially, another industry was expanding rapidly as well, namely the airline industry and primarily the rise of low-cost airlines, who introduced a radical new approach to air travel, democratizing travel for many European citizens. This industry expansion started well before Amsterdam saw tourist numbers grow. The liberalization of the European aviation market allowed low-cost carriers to gain significant momentum.
In a world dominated by flag carriers who operated long-haul flights and only serviced major airports, once the market opened up, new airlines started to emerge, who created new business models previously unknown to flag carriers who turned a healthy profit through high ticket prices. Back in 2003, the contours of how the European aviation market would develop were yet to be witnessed, but already back then the International Civil Aviation Organization (ICAO) found that consumers had greatly benefitted from the emergence of low cost airlines.
Ticket prices started to fall as more airlines started to compete for customers. While airlines such as Ryanair and EasyJet were still expanding their networks, already ticket prices had dropped, with travelers now being able to enjoy more destinations with more flights and having the choice to pick the best service that fit their travel needs. The ICAO observed that newly developed routes were now serviced by low cost airlines, who accounted for 50 percent of traffic. Flag carriers and other major airlines could feel the impact of this changing landscape. Fast forward to 2022 and low-cost carriers carved out a significant portion of the European aviation market. In January 2022, low-cost carriers claimed a market share of 26.51 percent of the aviation market.
Close to the ground, Flixbus, a budget European international bus operator was disrupting the existing bus networks across continental Europe. In 2011, FlixBus was established, with its founders having a simple mission, creating comfortable and affordable travel options for everyone. The company started by partnering with small, independent touring companies, which it gradually connected through a unified network, The Europe Entrepreneur explained. Through this interconnected network, FlixBus developed a strong value proposition, including buses that came equipped with free WiFi and other onboard entertainment options.
FlixBus grew to develop the largest bus network in Europe, delivering 400,000 daily connections to over 3,000 destinations across 35 European countries. In combination with an expanding aviation industry, a strong destination network formed across Europe, which not only lowered fares, but also introduced millions of citizens to cheaper travel options. Cities such as Amsterdam, which lie at the heart of these networks, enjoy consistent and growing visitor numbers.
Overheating housing market
The developing hospitality industry acted as a magnet for those who wanted to turn a profit, leading to a severely dysregulated housing market. Over the years the number of hotels had been steadily increasing in Amsterdam. In January 2017, the city counted 474 hotels. A year later this figure grew modestly to 481. By January 2019 the number of hotels had grown to 510. While the number of hotels decreased over the course of 2020. This trend already started before the global pandemic. In January 2023, the total number of hotels in Amsterdam had grown to 505, stabilizing to 497 by September 2024.
These figures seem modest, but the 3-star hotel category has grown significantly over this period. In January 2017, the city counted 142 3-star hotels, growing to 164 by September 2024. An increase of 15 percent in 7 years. Overall, the number of hotels had grown by almost 5 percent. The changing real estate landscape across the city has led to many undesirable consequences, with platforms such as AirBNB driving up housing costs and depleting the already strained housing portfolio even further.
In August 2017, Han Oomen wrote on the independent journalism platform Binnenlands Bestuur, that AirBNB investors should be barred from buying up property in the Dutch capital. Housing prices were skyrocketing, with foreign and native investors seeing the city’s rental market as a lucrative investment. This has led to an overheated housing market where median income households don’t stand a chance against deep pocketed investors, who see platforms such as AirBNB as a money printing machine.
The influx of investors, who not only rent out property for AirBNB rental purposes, resulted in a rapidly depleting housing inventory, in turn inflating prices from the rental and selling market. Oomen warned that while this has negative effects on affordability, the changing urban landscape and its target audience, deteriorate the social fabric of the city. Once publicly available portions of the city such as inner gardens, are becoming gated communities for a wealthy elite who is reluctant to interact outside of its comfort zone.
As the housing inventory decreases, households who cannot apply for social housing are competing with more and more searchers, driving up rental costs. Another segment of the housing audience, Oomen notes, decides to leave the city altogether, unable to compete or simply unwilling to participate in a cycle of disappointment. Apart from a disrupted housing market, those who all reside in Amsterdam are confronted with a changing city landscape. In December 2017, researchers Anne Hootsmans and Emma Berndsen for the website Geografie commented that once bustling city streets had turned into a cacophony of sound.
During the night, the sounds of wheels on trolley suitcases echoing through the streets and drunken tourists screaming unintelligible sentences. Citizens meanwhile see their sleeps disrupted and a cityscape that has transformed into a glorified fair. Hootsmans and Berndsen found that the tourism industry and its visitors acted as opposing forces, bringing economic prosperity, whilst simultaneously putting pressure on liveability. Both concluded that in part the municipalities own policies have been a cause for a dysregulated city center.
Reclaiming Amsterdam
Policy makers in Amsterdam have realized a strategy has to be developed to reclaim the city. In December 2022, the municipality of Amsterdam published its vision for the hospitality economy of 2035. The hospitality industry is vital for a vibrant and diverse city, the municipality opens. However, the unchecked growth of its tourism industry comes with a cost. Amsterdam has turned into a European hot spot, resulting in an overheated housing market and a crowded, dysfunctional city center. Tourists come for the obvious activities, from visiting the red light district to consuming copious amounts of alcohol, leading to many unwelcome effects for Amsterdam residents.
In the year 2000, the city welcomed a humble 4 million visitors. At the time, this was seen as a record breaking figure. Fast forward to 2019 and the number of overnight stays passed twenty million, clocking in at 21 million. The city of Amsterdam was bustling and more popular than ever before. But, this growth is deemed unsustainable and policymakers have already sounded that alarm that tourism volumes had to be reduced to keep the city livable. Amsterdam is not unique. Many popular destinations such as Lisbon, Barcelona and Paris among others are trying to find a balance between safeguarding its economy, whilst ensuring their cities remain liveable.
During peak seasons, cities such as Amsterdam welcome millions of tourists, keeping the cash registers ringing across the vibrant tourist economy. However, the city notes, the COVID-pandemic showed that when this machine comes to a complete standstill, the economy crumbles and the city is turned into a desolate wasteland overnight. This brief period in world’s history shows how brittle the foundations of a city running on hospitality can be. But as the sun was allowed to shine through the empty streets of Amsterdam, it gave room to develop a new vision. A sustainable vision for a unique city, accessible to those living, working and traveling within its borders.
In order to achieve a more durable and sustainable economy that benefits its citizens and business, policymakers want to limit the growth of the hospitality industry. The city acknowledges that quantitative growth has its limits. The number of tourists coming to the city has to be reduced, whilst maintaining a vibrant economy. Therefore, a more durable, new type of tourist has to be attracted to Amsterdam. The loud, pleasure seeking tourist, will have to make for a more sophisticated, wealthier travel. By doing so, the number of overnight hotel stays can be sustainably reduced.
This will allow the city to return to a healthy balance, where living, working and leisure can harmoniously coexist. Policymakers will adopt a more rigid take on desirable and undesirable commercial activity across the city, as the hospitality offering caters to a certain target audience. By changing the commercial lay-out, the city can encourage particular tourist groups to seek their desires elsewhere. This doesn’t mean that Amsterdam only wants elite travelers. By 2035, the city wants to remain a hospitality hub, but with tourism more equality distributed across Amsterdam. Backpackers are encouraged to seek their travels outside the city and loud bachelor parties will have become a relic of the past.
City marketing monster
Wandering the streets of Amsterdam over two decades ago was no pleasant stroke. The city was filthy. A cold, desolate state of affairs. Hence, policymakers decided enough was enough. The economy had to be restored. Amsterdam’s picturesque city center was no longer eye-soar, but an opportunity. At the turn of the millennium the municipality set out a tender where the best agency would win a lucrative campaign to rebrand Amsterdam and put it back on the world stage. The man behind this stroke of genius was Frits Huffnagel. An alderman with a relentless drive to rebrand Amsterdam.
The embodiment of this new vision for Amsterdam was the I Amsterdam campaign. A simple concept that resulted in countless copies around the world, but worked like magic for the medieval Dutch capitol. Tourism numbers skyrocketed as years passed. Despite experiencing minor hiccups, the city of Amsterdam thrived. Seeing millions of visitors from around the world and especially from within Europe. Citizens from around the region enjoyed a sprawling low-cost airline carrier and bus network. Offering rock bottom fairs to the continent’s most desired destinations. The aggressive rebrand of Amsterdam however came at a costly price.
The city’s housing market started to overheat as foreign capital found its way to the dense historic property market. AirBNB’s started to pop up and the number of hotels increased significantly. With the increased demand, the number of visitors rose, putting further pressure on the city. Policymakers in Amsterdam were trapped in a vicious cycle of their own creation, where the citizens it was meant to serve were unable to afford staying or saw their neighborhoods shredded apart by opportunistic investors. They had to pull the brakes to stop further disintegration of their city.
A new vision was formulated where tourism numbers would be decreased, aiming to attract wealthier, diverse visitors. A visitor not attracted by the pleasures unobtainable at home, but rather by the city’s rich cultural heritage and beautiful historic cityscape. The city would once again return to its citizens, where the tourism industry is an extension to the economy, rather than an overwhelming force. Amsterdam’s tale is a cautious reminder that quantitative success does not translate to quality. City marketers should look beyond growing metrics and know when a goal has been reached, instead of moving it.