Russian currency woes hitting Estonian tourism industry
Hotels in Tallinn are faced with an unusual problem this year, the two-week mini high season is threatening not to take place as Russians are cutting back on travel.
Traditionally, many Russians head to Tallinn and to other parts of Estonia for the New Year's festivities and the Orthodox Christmas at the beginning of January, with hotels capitalizing in, during an otherwise long winter and fall low season.
Russian tourists make up the second largest tourist group after Finns, but are now staying away as the ruble has weakened from 55 rubles per euro to a high of 100 on Tuesday, although it has stabilized around the 70-ruble per euro mark since Wednesday.
Külli Karing, the president of a union of tourism companies, said the drop could be as big as 30 percent. Head of an organization of hotels and restaurants, Ain Käpp, said he hopes hotels will be 70-80 percent full.
New Finance Minister Maris Lauri said the weak ruble is proof that the sanctions are working.”The economic situation is very bad. That means the sanctions are working and are more painful and serious than Russia thought.”
Alis Möll, who specializes in selling real estate to Russians, said the property train has been missed and real estate in Estonia, and in the whole of Europe, is now too expensive as a safe haven for funds. She said the number of Russian buyers has dropped this year.
Käpp said it is highly unlikely that Russians are choosing to travel to London or Berlin instead of Tallinn, and are opting for internal locations. The first week of January usually produces the vast majority of January's income for hotels, although the estimated 20-30 percent drop will still mean January will be far more profitable than February or March.