Domestic tourism may face problems

Photo: SCANPIX

Estonia’s domestic tourism is likely to continue its rapid growth this year, yet obstacles are appearing in the path of the success story: ever more people vote against bad weather by buying budget air tickets and money travels across the border, while only a few days are allocated for vacationing in Estonia.

Estonia suffers the third cold summer in a row. BBC in 2015 wrote how cheap package tours to tropical islands deprived the South English resorts of the British working class. While the picturesque towns there hosted five million people in 1949, only a quarter of million are expected to visit the south coast this year.

The author has also visited the historic British coastal towns of Hastings and Brighton in the summer and the atmosphere there cannot be compared with that of Pärnu on a sunny day – the small Estonian town     The decline of some former English resorts is quite apparent – abandoned and sometimes burnt-down buildings, former grand hotels now used as hostels.

“But with new large, fast aircraft, rising wages and higher rates of employment – not to mention a collective desire for something aside from grim seaside guesthouses with limited hot water, crowded roads, stuffy trains, uncertain weather, cold seas and chilblains – the package holiday business boomed” – BBC lists the causes of decline of the seaside towns.

Thus the question rises, whether Estonia’s coastal towns of Pärnu, Kuressaare and Haapsalu may face a similar fate. Statistics does not support it in any way so far since the standards of living are rising. But the tendency to have one or two planned foreign vacations in the autumn-winter-spring period is increasing among the middle class while summer plans depend on the situation. If the weather is good, they stay at home but cold summer means grabbing first available air tickets to any South European region. It all happens quickly in the web: search, find and buy.

Fewer days

But the number of overnight stays of domestic tourists in Estonia’s hotels is not showing any signs of decline. According to Tarmo Mutso, director of tourism development of Enterprise Estonia, the reason is the steady growth of income – there is enough money for foreign travel and a few days’ summer tour to Pärnu, Kuressaare or Haapsalu. But it is about a few days only because foreign tours last longer. Estonians no longer go to Pärnu for a week.

Rainer Aavik, Deputy Mayor of Pärnu, says that the situation is somewhat concerning for hotel businessmen, since the stay of tourists is becoming ever shorter. “It does not happen that the clients stay longer next year”. He says. “Estonians usually come for a night, foreigners for three or four nights. They no longer spend the vacation in a hotel. The world has become much smaller and people have more opportunities to spend their free time.”

The Finns have also a choice between a nostalgic trip to Pärnu by bus or car or turning towards the airport and landing in a warmer place.

If the economic situation should deteriorate, people will have to choose: whether to travel in Estonia or visit the Canary Islands? Prices in Pärnu are no longer cheap and people compare them with those of Tenerife and Varna rather than Haapsalu.

Global competition

According to Tarmo Mutso, budget airlines definitely affect the business of Estonia’s resort towns. “They do and significantly”, he says. “Abrupt and quick vacation choices are increasing all over the world.” Estonia’s tourism businesses therefore no longer compete with each other but with Mallorca, Dubrovnik, Barcelona, Costa de Sol, Tenerife, Madeira and Ibiza. They are engaged in global competition, where the key question is, what new can they offer to tourists and what are the quality and the price of the service.

“Competition for tourists is ruthless and we clearly compete with other countries”, Mutso says. “So far we have managed quite well. People may go abroad in the summer, but they need not give up their plans for Estonia.”

Tallinn’s hotels registered last year 362,000 overnight stays of domestic tourists, 13 percent more than the previous year. Pärnu town and county reported 327,000 overnight stays and 18-percent rise, while according to the Statistical Office, Tartu city and county also showed 13-percent increase – 222,000 overnight stays of tourists. Amazingly East Viru county reported almost the same number of overnight stays, more than Saaremaa and West Estonia.

Obviously foreigners, especially Finns, ensure a significant share of income to Estonia’s resort regions. They spent five percent more nights in our hotels last year than the year before. For the first time foreign tourists accounted for more than four million overnight stays in Estonia, while domestic tourists amounted to 2.2 million.

Pärnu’s Deputy Mayor Rainer Aavik says that the town has been showing growth for several years in a row and the summer booking factor and prices are at the world level. “We are a bit worried that there are no bargains in summer. But a significant apartment market has emerged besides hotels, which compensates the need for cheaper stay.” Pärnu hotels have over 4,000 places and the owners of apartments and houses add approximately 2,000.

Aavik admits that the Pärnu hotels and spas are already too expensive in summertime for an average income family. “Still, if someone wants to come from Tallinn and stay overnight, they can have a night’s lodging in an apartment for 50 euros. This price level is acceptable for Estonians.”

Pärnu’s standards have been kept up by strong competition and large investments – according to Aavik, a new hotel is built every year and new summer events are staged. “Until investments are made in tourism here, I see no great reason to be worried”, the deputy mayor adds. “The standards of the city’s restaurants have also improved much compared with five years ago.” Pärnu was highly popular in the 1990s as well, but unfortunately that resulted in excessive prices and very bad service culture, which in turn caused decline in the past decade.

Population numbers set the limits

According to Aavik, there is a new trend in Europe of South Europeans traveling northward for the summer. “Summers in the South have become ever hotter and one can meet a number of Italian and Spanish speakers in central Pärnu. They are escaping from heat”, Aavik says.

According to Verni Loodmaa, hotel entrepreneur and board chairman of the Estonian Hotel and Restaurant Association, domestic tourism has been growing so rapidly in recent years mainly because the earlier figures were almost nonexistent. “Only a few years ago most of the hotel clients were foreign tourists, while Estonians tried to spend as little money as possible while traveling within the country – they stayed at their relatives or acquaintances.”

But the growth of domestic tourism has its limits. “We are a small nation, one day we have seen them all and people need not want to return the same places”, Loodmaa says. According to him, it is apparent even in Tartu that the average number of overnight stays in hotels is declining rather then growing. “Life is not as rosy as statistics show – tourism is increasing in Tallinn and Harju county above all, but I just visited a motel near Lake Võrtsjärv and asked the owner about the business this summer. He said that it was all right, but worse than last year.”