MKM: Foreign demand is the main driver of tourism growth

TALLINN - July's accommodation statistics confirm the trend of the first half of the year, with Estonia's tourism growth being driven primarily by foreign demand, according to Aleksandr Michelson, a tourism advisor at the Ministry of Economic Affairs and Communications (MKM).

Estonia's accommodation market continued to grow in July. According to Statistics Estonia, guests spent 964,200 nights in accommodation establishments with at least five bed places, a 3.5 percent increase compared to the previous year. In total for the first seven months, just over 4 million overnight stays were recorded in Estonia, up nearly 5 percent from the same period last year, the ministry announced.

In July, the growth was driven almost entirely by foreign tourists. The number of their overnight stays increased by 5.9 percent year-on-year to 561,700, while the 402,400 overnight stays by Estonian residents remained essentially at the previous year's level with a 0.2 percent increase. Foreign tourists accounted for 58 percent of all accommodation nights in July.

"July is one of the most important months for Estonian tourism, and a nearly 6 percent increase in overnight stays by foreign tourists is a strong result. It is positive that in addition to Finland, demand grew from several other significant European markets, including Poland, the United Kingdom, Sweden, Italy, and the Netherlands. At the same time, we see that the growth is currently very heavily concentrated in Tallinn, and the regional picture is more uneven," Michelson said.

Tallinn was the clear driver of growth in July. The capital recorded 455,000 overnight stays, 12 percent more than a year ago, accounting for 47 percent of all accommodation nights in Estonia. There were 373,400 overnight stays by foreign tourists in Tallinn, a 13 percent increase from the previous year, and 81,700 stays by Estonian residents, up 6 percent. Two-thirds of all overnight stays by foreign visitors in Estonia during July were in Tallinn.

A comparison of absolute numbers also highlights Tallinn's significance. While Estonia as a whole added 32,200 accommodation nights year-on-year, Tallinn alone added 47,800. This implies that outside of Tallinn, the total number of overnight stays actually decreased by nearly 3 percent. The number of nights spent by foreign tourists outside the capital fell by 6 percent, and by domestic residents by 1 percent, compared to a year ago.

By region, the number of overnight stays saw the fastest growth in Valga County, with 37,000 stays in July, a 13 percent increase from the previous year. The number of stays grew by 11 percent in Harju County and 3.8 percent in Tartu County. In Harju County, excluding Tallinn, the growth was 3.6 percent, while in the city of Tartu, it was 5.2 percent.

However, in several key summer destinations, July's results were lower than the previous year. Parnu County recorded 122,900 overnight stays, a 10 percent decrease, with the city of Parnu itself seeing a 12 percent drop. Declines were also seen in Laane County (5.4 percent), Viljandi County (3 percent), and Saare County (1 percent). In Ida-Viru and Voru counties, the number of overnight stays remained essentially unchanged from the previous year.

Among foreign markets, Finland held a firm first place. In July, Finnish tourists spent 231,000 nights in Estonian accommodation establishments with at least five bed places, a 5 percent increase from the previous year. They accounted for 41 percent of all overnight stays by foreign visitors. The year-on-year increase from Finland was over 11,000 overnight stays, representing more than a third of the total growth in foreign demand.

Several other European markets demonstrated even faster growth. Overnight stays by Polish tourists increased by 28 percent, Norwegian tourists by 24 percent, British tourists by 23 percent, Dutch tourists by 20 percent, and both Italian and Swedish tourists by 17 percent.

However, growth was not consistent across all major foreign markets. Overnight stays by German tourists decreased by 2 percent and by Latvian tourists by 0.7 percent compared to the previous year. The number of stays by Lithuanian tourists fell by 12 percent, and by tourists from the United States by 16 percent. Consequently, the growth in foreign demand in July was primarily driven by Finland and several other fast-growing European markets.

The increased demand in July led to higher occupancy rates for accommodations. While Estonia had 1 percent more bed places and 0.6 percent more rooms available than the previous year, demand outpaced supply. The bed-place occupancy rate rose from 50 to 51 percent, and the room occupancy rate from 60 to 61 percent. The changes were more pronounced in Tallinn, where the number of bed places and rooms increased by 6.2 percent and 6.4 percent, respectively, while overnight stays jumped by 12 percent. Consequently, the bed-place occupancy rate in the capital climbed from 65 to 69 percent, and the room occupancy rate from 77 to 80 percent.

The average cost of an overnight stay per person in Estonia decreased from 56 to 53 euros, and in Tallinn from 65 to 56 euros. This price comparison is affected by the large number of major concerts last year, which drove up accommodation demand and prices in July 2025, especially in Tallinn. As a result, while occupancy rates were higher this year, the average price remained below the exceptionally high level of the previous year.