The Ministry of Economic Affairs wants tourism to play a greater role in the economies of rural areas. To that end, it has drafted a regulation providing grants to tourism development organizations, primarily in regions outside Tallinn.

The grants are intended for organizations officially known as destination management organizations (DMOs). For example, DMOs in southern Estonia include the Tartu County Tourism Foundation and The Onion Route (Sibulatee), while those in Pärnu County include the Tõstamaa Manor Foundation and the nonprofit Soomaa Tourism. On the islands, DMOs include the Hiiumaa Development Center and the municipal governments of Saaremaa, Ruhnu and Muhu.

Organizations receiving grants will be expected to develop rural tourism in cooperation with local governments, businesses and other partners to increase tourism's contribution to local economies.

"The main aim of the new grant regulation planned for 2027-2029 is to make funding for regional tourism development more stable and long-term," Kristina Jerjomina, head of tourism at the Ministry of Economic Affairs, told ERR.

She added that grants have so far been awarded for shorter periods, but under the proposed changes, funding would be provided for three years. However, recipients' required co-financing would increase from 50 percent to 55 percent by the third year to reduce dependence on government funding.

According to Jerjomina, greater emphasis will be placed on reducing tourism seasonality to encourage travel beyond major centers outside the peak summer season, as well as on the impact of tourism on regional economies and ensuring positive visitor experiences.

"At the same time, the use of grants and reporting requirements will be simplified, the range of eligible expenses will be expanded and the total annual funding available will increase by approximately €200,000," Jerjomina explained.

Under the tourism action plan for the coming years, the share of overnight stays outside Tallinn should reach at least 53 percent by 2029. The share of overnight stays during the spring, fall and winter months should rise to 65 percent by the same year.

To achieve these goals, the grants are intended to support the continued development of cultural, heritage, culinary and other tourism offerings to meet the expectations of international visitors. The draft regulation places particular emphasis on improving quality and making these experiences available during the low season, with the aim of increasing tourism revenue.

Plans also call for continued digitalization and automation in the tourism sector, including making more services available for online booking.

Rural tourism bottleneck getting from the bus station to the forest or manor

Transportation is also a challenge. According to the explanatory memorandum accompanying the draft regulation, one of the biggest bottlenecks in regional tourism is how visitors can get from a bus or train station to a forest trail, manor or museum or find parking information they can easily understand.

Organizations receiving grants to develop rural tourism will not be expected to buy buses or operate routes themselves. Instead, they will be required to discuss ways to improve the situation with regional public transportation centers, local governments, technology companies and tourism businesses.

Tourism development organizations will also be tasked with identifying which tourist attractions most urgently need better access, analyzing visitor travel patterns and determining which solutions could be tested.

The grants will total €1.97 million annually, with funding allocations taking into account how far a destination is from Tallinn and how well it is connected to other areas.

Under the draft regulation, regional impact calculations will be based on the assessment that access to services, jobs and infrastructure is best in Tallinn and neighboring counties, while more remote regions need additional incentives and support to retain residents and services.

"Using a regional impact indicator makes it possible to direct more funding to destinations where tourism development can make the greatest contribution to regional balance, increased business activity and job creation outside Tallinn and Harju County," the explanatory memorandum states.

Grant recipients will also be required to ensure that their region's tourism services and destinations are accurately listed in the visitestonia.com database.

The regulation is still in draft form and the ministry is accepting feedback until October 26. The final wording will be determined after the consultation period.

--

Follow ERR News on Facebook and X and never miss an update!