Estonian accommodation sector's summer season outlook not so sunny
This April, accommodation establishments in Estonia saw a decrease on year in the number of tourists served, including both domestic and foreign tourists, according to figures published by Statistics Estonia on Friday. According to the sector's businesses, this summer season may be worse than expected.
"The entire world and also Finland's economic situation is evidently such that people are cutting spending – people are saving," said Estonian Hotel and Restaurant Association (EHRL) CEO Killu Maidla. "Uncertainty. They don't feel like things are getting better and they can spend freely. Weather also plays a vital role in tourism, and we had an exceptionally long and cold spring."
"The drop in April was pretty steep in Pärnu too – 11 percent compared with April 2023," admitted Estonia Spa Hotels CEO Andrus Aljas. "The last time Pärnu experienced such a huge drop for one month was in August 2021. In that sense, April's results really were shocking. We saw based on our own company that April was worse, but there was still hope that maybe we ourselves had done a bad job – but it's still in fact Pärnu's entire tourism sector that is in decline."
The summer capital's hotel chief believes rising accommodation prices may be having an impact. Maidla at EHRL, however, finds that accommodation prices have increased rather little.
"As long as demand doesn't recover, it will be very difficult to increase prices," she explained. "According to Statistics Estonia too, while the consumer price index (CPI) has increased by more than 40 percent and the sector's wages have also gone up by 40 percent in four years, prices have in fact only actually gone up 15 percent compared with 2019."
Tervis Spa Group CEO Jaan Ratnik said that their two hotels fared a bit better this April than they did last year.
"There is growth, but this growth isn't enough to cover the cost that just keep continuing to add up," Ratnik said. "The new economic situation is an existential challenge for all accommodation establishments."
While May figures were better, accommodation companies are feeling rather gloomy about this summer's prospects.
"This summer's forecasts aren't terribly positive," Maidla acknowledged. "Generally speaking, the sector is rather guarded about this summer, about this summer's outlook, and we hope that things will go better than we fear they will."
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Editor: Merili Nael, Aili Vahtla
