Tourism companies expect vacation prices to increase

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The passenger terminal at Tallinn Airport. Source: Sander Koit/ERR

While tourism companies do not anticipate a sharp jump in the prices of foreign travel, but it is likely that vacation prices will eventually cost more than they did pre-pandemic.

Booking.com CEO Glenn Fogel told BBC recently that he expects travel prices to rise this year due to pent-up demand and fewer aeroplanes in service. There is a large number of people on the market who have had to delay their vacations and foreign trips due to the pandemic and are eagerly awaiting for restrictions to be eased.

Estonian tourism companies do not estimate a sharp increase in prices because people have alienated from travel and there is still much uncertainty. Currently, flight and tourism companies deal with having to attract people to travel again.

At the same time, Estravel marketing manager Katrin Aaslaid said that while there are still plenty of good offers for travel packages and flight tickets available, it is likely to change in the future.

"It will certainly begin increasing once more people are vaccinated and they dare take more trips and more destinations become available. Prices will certainly increase due to flight companies having taken out loans, they need to disinfect everything. Everything must have new, more specific requirements. A price increase will follow," Aaslaid said.

Age Põder, head of partnership relations at Gotravel, said that the situation in the tourism sector differs by region based on whether the sector had state support or not. It is clear that many service providers have also closed up shop due to the uncertainty in the sector over the last year and a half. Põder said it is unclear how much that will affect prices.

Põder said travel companies are not likely to jack up prices, because the market situation simply does not allow for it. She anticipates that a creeping price increase will come, however.

"For those, who have survived the crisis, they must already contribute into the quality of the service and all that costs money. We consider it normal and expect hotel prices to increase," the Gotravel representative said.

Põder added that client expectations have changed for some services and that will also be reflected in pricing. "Primarily group trips, where expectations, desires and security requirements have changed. People no longer want to travel in large groups, groups will be smaller and investments will be made into quality. This could increase prices a little," Põder noted.

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Editor: Kristjan Kallaste

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