Palanga in no rush for season's closing

  • 2009-10-07
  • By Linas Jegelevicius

Ala Valuziene, Director of Palanga Tourism Information Center(right) and Nijole Kliokiene, Director of Lithuanian  State Tourism Department (left) discuss Palanga's future.

PALANGA - Though October weather has settled in along the Baltic seaside and its pearl, Palanga, you won't get much of the penetrating autumn's mood when promenading down Basanavicius street. Many businesses, whether a restaurant, hotel or the Dutch-run amusement park, are still open as they cozily embrace scarce clusters of pinched passers-by. Palanga's restaurants and hotels, before shutting down for the gripping winter's standstill, remain reluctant to part with the occasional guest.
If you had talked to the resort's entrepreneurs before the high season, you would likely have heard teary lamenting over the sheer unfavorable business environment. Complaints were heard especially loudly from hotel owners over the increased Value Added Tax, increased from 5 percent to 21 percent; they grumbled about water prices, which rose from 3 litas (0.86 euros) to 7 litas for a cubic meter, and protested about the lesser hordes of revelers.

"I feel as if I'm at war. Every morning, when I wake up, I start thinking what other laws, that exacerbate business problems, have been passed overnight," President of Palanga Hotel and Restaurants Association Gintaras Siciunas told the author of this article last July.
This week however, he sounded less dramatic. "The high season was not as bad as had been predicted; it was not as good as it could have been under more favorable circumstances. However, I cannot give out further conclusions until our Association's council meets later this month," he told The Baltic Times.

Despite the economic meltdown, Lithuania's San Tropez (as Palanga is jokingly known) has accommodated relatively large numbers of pleasure-seekers this year. "We estimate the resort visitors' volume decrease this summer to be only 15 's 20 percent. This is far less than what had been predicted. Obviously, people tended to spend less, but things could have been much worse. I don't know a local business owner who doesn't complain, but, nevertheless, they all somehow managed to keep their doors open and operated fully staffed throughout the season."

Palanga Municipality's main task was not to hinder businesses activities," said Palanga's vice-Mayor Rimantas Garolis. He believes that Palanga will be even more attractive to visitors and locals alike in the near future, when its Tourism Information Center is renovated. The much-anticipated spa, with mud baths, will open its doors in the former Jurininku Hospital Rehabilitation Center providing an additional attraction, he adds.

"Currently we are negotiating with the Ministry of Health over the takeover of the Center. Several domestic and foreign investors contemplate possible investments there. What will be different from existing hotels with spas on their premises will be that this one would be marketed not only for tourists, but for locals as well," said Garolis.

As always, Palanga this summer has greeted many foreign tourists, but the abundance of visitors from Norway surprised Director of Palanga Tourism Information Center Ala Valuziene. "Numerous visitors from Norway have been the season's real discovery. Our extensive collaboration with our counterparts in Norway, and the direct flight between Oslo and Palanga, produced a high turnout of Norwegians. Their stays were comparably longer; they eagerly bought wellness packages at our health spas, they went shopping in Klaipeda; some preferred dentist visits because of much lower dental care rates than in Norway… Norwegians have filled the gap which emerged with the reduced flow of tourists from Belarus and Russia…," says Valuziene.

An extensive cover story titled 'Palanga is the pearl of the Baltics' was published in a major Norwegian newspaper, contributing to the inflow of the Vikings' descendants. According to Valuziene, in general the high season, despite the economic crisis, "was quite good. During the peak season, which lasts from July 10 till August 20, occupancy in hotels was 75 percent, and that's not bad. Honestly speaking, we had anticipated much worse hotel occupancy. There were fewer Lithuanians, Latvians and Belarusians this season."

However, with the high season having wound down, the resort's business owners are anxious about the lingering low season. Zivile Antropikiene, director of the three star hotel Meduza, says that in comparison with last summer, this year income plummeted by 20 's 30 percent. According to her, the number of hotel guests was pretty much the same as during last summer, however, the loss occurred due to significantly decreased hotel rates.
"People tended to choose last minute deals, thus avoiding advance reservations. The increased value added tax was strangling; hotel guests were more cautious with their spending at the hotel's restaurant and bar," she said.

The restaurant Ukrainieciu virtuve (The Ukrainian Kitchen), which features a hotel with 5 rooms, this summer had been tempting guests with 10 's 25 percent slashed rates on food and accommodation, but such a policy only helped it teeter close to closure.
"By cutting hotel rates we have almost reached the point where filling the rooms was nearly below cost, so it's better to keep the rooms vacant. As for the restaurant, every month, except July and August, was getting worse. In every restaurant, income from alcohol consumption usually makes up the bulk of profit, but this summer most visitors would spend an hour snuggling up with just a shot, dropping alcohol sales by 20 's 30 percent," noted the restaurant's co-owner Birute Tammertiene.

However, she says that the restaurant will remain open during the low season. She hopes to retain the entire staff by letting some employees work part-time.