Tourism continues to decline

  • 2009-05-13
  • By Ashley Brettell

TOUGH TIMES: The general manager of Go Hotel Shnelli said the second quarter would be just as difficult as the first and that current hotel prices were probably unsustainable in the long term.

TALLINN - Statistics Estonia has reported that the number of days tourists spent in accommodation establishments has fallen by 14 percent in the first quarter compared to the previous year.

According to Statistics Estonia, in the 1st quarter 359,000 foreign tourists utilized accommodation services such as hotels and hostels. Of these tourists, 165,000 were domestic tourists and 194,000 foreign tourists.  More than half of all tourists came from Finland.

The decline was reasonably consistent across all foreign sectors, with the only notable exception being Russia.

Raigo Triik, General Manager of Go Hotel Shnelli, was able to provide an insider's perspective on the decrease in tourism. 

Though he said "that the first quarter as reported was very challenging and that the second quarter was also looking difficult," he also confirmed that in Tallinn the growth in Russian tourists was evident and in his own hotel it had almost caught up with the level of Finnish clients.

Triik said his prognosis for the year was that it would generally be a difficult one, and that the current price scheme at hotels would be difficult to maintain over the year.

"The heavy discounting of high level hotels is probably unsustainable," he said. "Attracting corporate clients is proving somewhat difficult."

Regarding his own hotel, however, Triik remained slightly more optimistic.

"It is still very new and has an excellent location 's within its class segment it [will] remain very competitive," the hotel manager said.

There has been a general increase in tourism from Russia since a low point was reached just after the Bronze Soldier demonstrations two years ago 's but the most recent increase was still significant after taking that trend into account.

During the first quarter, traditionally the low season, the increase saw Russia become Estonia's second largest partner in tourism. A total of 23,000 Russians used Estonian accommodation services, which was an increase of 18 percent from last year.

The home market was particularly weak during the period. Over 40,000 fewer Estonians used their countries accommodation services in the first quarter. This fall brought levels down to those not seen since 2006. 

Another segment that performed very poorly was that of business related trips.  The number of visitors on business trips decreased 28 percent. This statistic includes both foreign and local visitors.

In recent years Estonia has seen a substantial increase in hotels and consequently in rooms As a result of this and the fall in tourism, the room occupancy rate in March fell to 29 percent 's whereas in previous years 40 percent was more typical. 

The average cost of a guest's one night stay fell to 423 kroons (27 euros).

Many in the sector are hoping to get a boost from the Ollesummer festival in June and the Madonna concert in August, but say the industry needs more such events to increase demand later in the year.

Though difficult times may be ahead for the accommodation industry, decreased prices and occupancy rates may present an opportunity for travelers from both within and outside of Estonia.