Industry body calls for Estonian state to take steps to reverse drop in tourist numbers

TALLINN – The number of foreign tourists staying at the accommodation establishments of Estonia is set to decline also in the future and the state needs to take action to address this worrying state of affairs, the Estonian Hotel and Restaurant Association finds. 

"I very much hope that the political parties about to begin coalition negotiations understand the importance of tourism for the Estonian economy," the association's board chairman Verni Loodmaa told BNS on Thursday, pointing out that tourism accounts for 7 percent of Estonia's GDP. 

Loodmaa said this should be paid more attention to.

In January 2019, the number of foreign tourists staying in the accommodation establishments of Estonia declined 4 percent compared with the same month a year ago. The drop was biggest in the number of tourists from Finland -- 19 percent. 

Loodmaa described this as a serious sign of danger.

"When it comes to Finland, it needs to be understood that, today, we have our back against the wall. Efforts by the businesses alone are no longer enough -- we need also steps by the state to be better visible on the Finnish market, work together with business operators, because so abrupt a reduction in our biggest partner in tourism is already becoming quite a risk for our whole tourist industry," the manager of the association said.

According to the Estonian Hotel and Restaurant Association, also the small share of tourists visiting Estonia on a work related trip is a problem, especially considering that the numbers of tourists on a business trip are usually bigger in January.

"Of all foreign tourists, 64 percent are tourists on a holiday trip and only 28 percent people on a business trip, which demonstrates that we need a conference center and also that direct flight connections with Estonia are insufficient," Loodmaa said.

Loodmaa highlighted the price level as putting the tourist industry under particular stress.

"A night at an accommodation establishment cost as much as a year ago. We know what the inputs did over the past year. We know how much labor costs have risen at companies, as well as several other inputs," Loodmaa said.

"I can see that the profitability of hotels is beginning to decline quickly -- which is a also a trend that we have been seeing before, but it has become steeper now," he said. 

Contrary to the trend seen in foreign tourists, the number of domestic tourists climbed 9 percent year over year in January. 

"Also that trend is continuing and demonstrates that the wellbeing of the Estonian people has increased," Loodmaa said.

In January 2019, 114,000 foreign tourists stayed in the accommodation establishments of Estonia, 4 percent fewer than in January 2018, Statistics Estonia said on Thursday. Of tourists, 68 percent or 77,000, arrived from Finland and Russia. Compared to the previous year, the number of tourists from these countries has decreased by 19 percent and 4 percent, respectively.

Altogether 8 percent more tourists came from Latvia. More tourists came also from other European countries -- Sweden, Lithuania, the United Kingdom, Germany and Norway. The number of tourists from Asian countries remained at the level of previous year.

A total of 72 percent of the foreign tourists stayed in the accommodation establishments of Tallinn, 7 percent of the foreign tourists stayed in accommodation establishments in Parnu and 6 percent in both Tartu and East-Viru County. Altogether 64 percent of foreign tourists were on a holiday trip and 28 percent on a business trip.

Domestic tourists accommodated during the month numbered 95,000, 9 percent more than in January 2018. Altogether 59 percent of domestic tourists were on a holiday trip and 25 percent on a business trip. A total of 31 percent of the accommodated domestic tourists stayed in the accommodation establishments of Harju County, 15 percent in Tartu County, 14 percent in Parnu County and 11 percent in East-Viru County.

Altogether 999 accommodation establishments offered services for tourists in the first month of this year. A total of 20,000 rooms and 47,000 bed places were available. Altogether 36 percent of the rooms and 27 percent of the bed places were occupied. In January 2019, the average cost of a guest night was 37 euros, as expensive as in January 2018. The average cost of a guest night was 42 euros in Harju County, 37 euros in Tartu County, 33 euros in East-Viru County and 27 euros in Parnu County.