Estonia sticks to ambitious long-term goals

  • 2004-12-15
  • By Aleksei Gunter
TALLINN - For years now Estonian tourism officials have been trying to entice foreigners out of Tallinn and into the hinterland, and despite undeniable success, they say they are not about to give up.

Recently Enterprise Estonia, a state-run business promotion agency, began financing construction of Toila Spa in Ida-Virumaa county to give the impoverished northeastern region a much-needed boost. The unique sauna complex, which will boast a Romanesque atmosphere, will cost some 20 million kroons (1.3 million euros), half of which is to be provided by Enterprise Estonia.

Toila Spa, which should be completed in the summer of 2005, may not seem like a cure-all given that the town has been known for its spa facilities for nearly a century. However, local authorities have not seized upon the opportunities brought by EU membership. Even though a special program for improving regional competitiveness with the help of EU structural funds was launched by Enterprise Estonia in July, none of the three projects approved so far is based in Ida-Virumaa.

Hundreds of buses packed with tourists pass through Narva every day, and local businessmen are eager to get them to spend the night. But this, alas, presumes there is a place for them to stay. Slowly, Narva, once heavily criticized for a conspicuous lack of modern facilities, is remedying this problem. The city acquired two new hotels this autumn, an existing one is being expanded, and yet another is scheduled to open in the spring.

Viktor Malkov, who works at the recently opened Hotel Narva, claims the hospitality business is on the rise and will remain robust for at least another year given that the city, Estonia's third largest, has only nine accommodation facilities.

To be sure, the government is neglecting neither other regions nor other facets of the industry. Maarika Liivamagi, head of the Estonian Tourist Board, says the National Tourism Development Plan for 2002-2005 sets four priorities: conference tourism, historical heritage and culture tourism, nature tourism, and national parks and active tourism.

Each requires it s own approach. "For example, in order to develop conference tourism, Enterprise Estonia, along with travel companies, is creating the Estonian Conference Bureau," he says.

Enterprise Estonia hopes to help local tourism businesses create 10,000 new jobs by 2009. Local businesses can apply for an EU-sponsored support program - the Marketing and Product Development Program for Travel Trade - through Enterprise Estonia. Another program, the Destination Estonia Marketing Program, helps the Estonian Tourist Board promote the country as a tourist destination.

"Local businesses have provided a strong contribution, along with foreign capital, to the development of the Estonian hotel and restaurant sector," said Liivamagi.

In the last four years, investment in tourism has amounted to 608 million kroons. In 2003 alone 226 million kroons were invested in the hotel and the restaurant sector, or 2 percent of total foreign direct investment last year.

From January to August of this year, over 960,000 foreign tourists have stayed at least for one night in an Estonian hotel or other accommodation, according to Enterprise Estonia. As far as inbound tourism, about 383,000 Estonians spent the night in a hotel away from home during the same period. In both cases growth compared with 2003 amounted to approximately 30 percent.

The main causes for the tourist inflow growth were both Estonia's promotional campaign activated in several foreign countries in 2004 and expansion and improvement of the tourist facilities such as building new hotels, launch of new ferries on the Helsinki and Stockholm routes and cheaper plane tickets. An increase of car travelers from Latvia, Lithuania, Poland and Germany taking advantage of the open borders within the EU is expected to come out in the final year analysis.

Prime Minister Juhan Parts, who spent two hours in Enterprise Estonia's office last week, commended agency officials on a job well done during the country's first year in the EU. He emphasized that a knowledge-based economy must become not only a slogan but a reality in all fields, including tourism.