Economic analyst: Too early to talk about recovery of tourism sector

Cruise ships at the Port of Tallinn. These are barred at least until the start of May.
Cruise ships at the Port of Tallinn. These are barred at least until the start of May. Source: Siim Lõvi/ERR

SEB Pank economic analyst Mihkel Nestor said that while the number of foreign tourists is increasing, it is still too early to talk about the recovery of the tourism sector.

Nestor said: "The number of foreign tourists has started to grow quietly, but is several times lower than last year's visitor numbers. Although domestic tourism helps to prevent major problems in many places, the fate of the sector as a whole still depends on the further course of the virus and the recovery of people's travel courage."

According to Statistics Estonia, 41,800 foreign visitors stayed in Estonian accommodation establishments in June.

Nestor noted: "This is six times less than at the same time last year, but it is still a significant improvement over previous months. For example, in April, just over 1,200 foreign visitors stayed in local hotels, meaning that only one of the larger hotels in Tallinn would have likely been enough to accommodate the whole group."

The analyst added that the situation is currently the best with tourists from Estonia's neighboring countries. In his opinion, the Latvians, slightly surprisingly, have remained the most loyal to Estonia. "While in June last year, 17,000 Latvians stayed in Estonian accommodation establishments, this year the number was 10,000. The 40 percent drop is large, but it is much larger for other countries of origin."

According to Nestor, domestic tourism has at least partially compensated for the decline in foreign visits. "July statistics will truly tell the popularity of spending a holiday at home, but more than 120,000 local visitors visited the local accommodation establishments also in June," the economic analyst said.

In June, Pärnu benefited the most from the cancellation of Estonians' trips abroad. In Pärnu, the number of stays increased from last year's 15,600 to 22,500, but more tourists stayed overnight in East-Viru County than in the previous year as well.

Nestor emphasized that the future of the tourism sector depends foremost on the spread of the coronavirus in the coming months, the success of researchers in developing a vaccine and the decisions of politicians to impose economic and movement restrictions.

Nestor concluded: "On the other hand, people's attitudes and courage to travel again also play an important role. While it is still difficult to measure the fear of the coronavirus, then from an economic point of view, Estonia's view could be a little more optimistic than in some other country. Namely, the economic crisis caused by the coronavirus has been more modest in the countries from which tourists traditionally arrive in Estonia."


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Editor: Kristjan Kallaste

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