RIGA - The Baltic hospitality industry's main problems have always been seasonal. This could soon change.
Before EU accession, the industry's chief headache was how to fill hotels in the winter. Even in the capitals, winter occupancy was a real problem: in the first quarter of 2003, average room occupancy in Tallinn was 45 percent, while in Riga it was 32 percent. The regional situation was even worse, with 39 percent occupancy in Estonia and 26 percent in Latvia.
During the summer, however, the situation was reversed. Across Riga, almost 60 percent of all rooms were occupied in summer 2003, while in Tallinn the figure was 80 percent. At the top end of the market, occupancy topped 95 percent, prompting the media to claim that there were not enough hotels in the Baltic capitals. The situation worsened in 2004, when according to Charles Otter, executive assistant manager at Riga's Radisson SAS Daugava hotel, "some nights, there literally wasn't a room free in the city." Another tourist boom is expected in 2005.
For the hotel industry, it is a dilemma: open more hotels and risk bankruptcy in the winter, or leave the number unchanged and turn guests away during the warmer months? Jolanta Macioniene, sales manager of Vilnius' Hotel Conti, sums up the situation: "The high season is no problem, but the low season is difficult because there's huge competition," and Otter says simply, "Right up to November 2004, seasonality was our main issue."
But this winter, for the first time, the situation has changed. Tourists have been flocking to the Baltic capitals. "We've done very well this winter. Our visitor numbers were up 15 percent on last year," says Otter. Kairi Stokgolm, sales and marketing manager for Domina hotels, adds, "Our numbers this winter have been fantastic. The Domina City hotel in Tallinn had 64 percent occupancy, up 10 percent." Even regional hotels have been affected. "The average occupancy in January this year was over 50 percent. During the school [winter] holidays we were totally booked out," says Egle Brazauskaite, marketing assistant at Spa Vilnius in Druskininkai, Lithuania.
Industry experts cite several reasons for this change. First are local attempts to increase winter trade.
"Seasonality is a big issue everywhere in northern Europe, so we have to develop congress tourism," explains Alvitis Lukosevicius, director of the Lithuanian State Tourism Department. "Every three- and four-star hotel in Lithuania has to have a conference hall, and we're highlighting our conference facilities at international exhibitions."
In an interview with the travel and tourism trade magazine Baltic Standby, Gundega Zeltina, chairman of the board of Latvia Tours, recommended arranging fashion festivals and big-name concerts during the low season to boost numbers. Estonia, meanwhile, has looked east, according to Macioniene.
"The Estonians are doing a lot of marketing in Russia now. That's why there are so many Russians there," she says.
The Russian market is becoming increasingly important. Russian visits to Estonia in winter 2003 's 04 far outstripped summer visits, and Stokgolm confirms this trend for 2005: "Russian influence [in the winter] is getting more and more important." Macioniene concurs: "A few years ago Russians thought Lithuania was too expensive, but now we're getting very big interest, especially during the New Year."
Latvia has not yet shared the Russian winter boom, a fact that industry observers attribute to complexities in the visa situation. If these complexities can be ironed out, Latvia, too, could enjoy a low-season surge.
A second factor has been publicity due to EU accession. In 2004 the number of guests from EU countries in Lithuania rose 47 percent. In the same period, the number of German tourists in Latvia grew 40 percent, British tourists 44 percent and Italian tourists 57 percent.
If most came in the summer, the winter has not been short of action either. In November 2004 the budget airlines EasyJet and RyanAir entered the Baltic market from Britain and Germany, and the result has been impressive.
"There has been a big increase in the number of British tourists this winter," says Otter. And Stokgolm agrees.
"This winter the number of British visitors to Domina City in Tallinn increased by 18 percent. That's a dramatic change."
Lotta Lindquist-Brosjo, Ryan-Air's manager in the Baltics and Scandinavia, says that Reval Hotels experienced a 30 percent surge in visitor numbers this winter, a change which they attribute largely to RyanAir passengers.
Moreover, this surge in European interest is changing tourism patterns.
According to Lindquist-Brosjo, 45 percent of all RyanAir passengers across Europe leave for just one night. According to official figures, the average length of stay in Latvia decreased by 7 percent in 2004, to 2.2 nights per person.
"All across Tallinn, we're seeing more and more leisure weekend breaks," says Stokgolm.
"Weekend breaks are definitely going up," Otter agrees. "Europe is so accessible now." In Druskininkai, Alma Matuleviciene, director of the Hotel Violeta, says, "summer and winter weekends are really busy, the weeks are much quieter."
Taking into consideration the Baltics' push for conference business, there is a real chance that 2005 might see a leveling in the seasonal gap.
However, the happy ending is not guaranteed. The city-break boom has not yet escaped the capitals. New hotels are being built at an impressive rate across the Baltics, and this could well lead back to seasonal capacity problems.
"If too many hotels open up, we could go back to the gaps in the low season," says Otter.
It may well be that despite all marketing efforts, the Baltic winter is simply too bleak for most tourists. For all that, however, this year's winter grip seems to have slackened for the first time. Seasonality will be an issue for years to come, but 2004 may yet mark the beginning of the end.
