Inflation topping list of European insecurities

In 2021, the most acute concern was the [COVID-19] pandemic; last year, the war breaking out drew a clear distinction between east and west in the recovery of tourism. Based on a recent European Travel Commission (ETC) survey, however, a full 40 percent of European travelers are worried about their living, about inflation and about increased travel costs.

Significantly fewer people consider war an influencing factor in their travel decisions — only about one-tenth of those surveyed. Nearly 10 percent consider their favorite destinations overcrowded (a good opportunity here for Estonia!), and the fewest, about 6 percent, fear too abruptly changing travel conditions (such as due to quarantines again).

The uncertain economic situation has impacted travel decisions from Great Britain through Italy, and this is reflected in European countries' foreign tourism results as well.

Potentially bigger burden on Estonia's summer season

In the wake of the pandemic, the majority of travel was to under the Southern European sun, but this pleasure is being overshadowed by new record high temperatures. Nearly a tenth of travelers consider extreme summer weather conditions a problem, the ETC survey showed.

What does this mean for Estonia? Potentially greater interest in us. For example, wealthy sailing enthusiasts attending the Hanseboot Boat Show in Germany have been looking for years for smaller marinas where it isn't as hot out. News of record heat to the south adds further arguments in our favor.

We absolutely cannot get cynical when highlighting this in tourism marketing, however, because we're sharing the same planet, and climate change can be felt even in Estonia.

In the context of tourism stats, record-setting summer temperatures prevailing to the south may mean that our tourism will become more summer-oriented. This would put further pressure on the peak season, prices and the burden on our tourism sector.

Nevertheless, it would also depend on how this burden is distributed between the summer months. If we saw more tourists from Western and Southern Europe in June and August, that would be a good thing, as we have reserves then.  This would help even out the summer season, as our most numerous visitors, the Finns, focus on July.

Tourism recovery looks better sans Russian tourists

If you look at the first three, four months' of European tourism results this year, they vary considerably by country. Many eastern countries haven't reached pre-crisis, i.e. 2019, levels, but the first half of the year has seen modest results in several parts of Western Europe as well, including in Italy, Switzerland and Germany.

Estonia, for example, saw 19 percent fewer overnight stays by foreign tourists in the first five months of 2023 than during the same period in 2019. Excluding Russian tourists from these calculations, however, the number of overnight stays by all other foreign tourists was only down by just 5 percent this year.

Foreign tourism in Finland is recovering even more tenaciously than in Estonia right now, largely because prior to all the crises, they had a higher ratio of Russian tourists than we did. Even others must adapt and find new markets. That's precisely what's currently underway in European countries' tourism marketing, but it will take time. Replacing a major market combined with inflationary pressure means, first and foremost for more eastern countries, that achieving 2019 volumes may take more time than predicted.

Changing circumstances in more distant markets

Prior to the crises, Japan was a growing market for Estonia, visits from China were showing strong results, and we had already started looking toward other countries like Singapore and South Korea.

Japan is currently troubled by economic instability, while travel from China has long since been inhibited by restrictions, as a result of which travel is still viewed skeptically, and domestic travel to visit relatives and friends tends to end up the priority. The war has also protracted Asian countries' air connections with Europe — making them more inconvenient and expensive. Many people's passports have expired in the meantime as well, and applying for visas takes time.

A welcome distant market has been the U.S., which thanks to the strong U.S. dollar has been one of the best recovering target markets both last and this year. Their overnight stays in Estonia have already exceeded 2019 levels as well.

Concentration of flights to hubs

At the end of this May, we hosted the ETC, which had met in Tallinn to launch its Climate Action Plan aimed at reducing tourism-related emissions. One of the biggest changes lies ahead in the reorganization of aviation. It's clear that tourism can't live without flying, but going forward, Europe will be closely reviewing which connections to maintain via flights, and which via other means of transportation.

France is leading the way here, having banned domestic flights to destinations that can be reached by train at the start of this summer. A review of travel connections awaits pan-European tourism cooperation as well, and travel is increasingly moving toward a major hub-based approach.

This may not necessarily mean worse tourism numbers. Riga, for example, currently has better flight connections [than Tallinn], however visits to Estonia significantly exceed those to Latvia, thanks, among other factors, to the proximity of and frequent ship connections with Helsinki.

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