TOURISTS IN TALLINN. New Year’s Eve can bring the occupancy rate of the capital’s hotels to almost maximum
“We have 90% occupancy in the last days of the year. As visitors increasingly make their decisions at the last moment, the increase in occupancy is certainly at its highest, especially in hotels where holiday celebrations are organised. New Year’s Eve,” said Kaisa Mailend, CEO of Hestia Hotel Group, about New Year’s hotel tourism in Tallinn.
According to him, New Year has always been a popular time, both among Estonians and visitors from our neighbors, Finland and Latvia. At the same time, hotel turnover in Tallinn is obviously lower than pre-crisis 2019, because the last months since September have shown a slowdown in demand and a sharp drop in prices. The share of domestic tourists has increased from year to year, but this does not compensate for the large deficit of foreign tourists.
“A few full days in a hotel will not provide relief from the high input prices and skyrocketing inflation that have been the talk of 2023. The VAT increase to 22% next year will increase the amount of expenses of each person and other taxes that impact everyday life will be added. The VAT increase on hotel services in 2025 will be the so-called icing on the cake, when the extinction of the sector is in full swing,” said Mailend.
According to him, the year that is ending has probably been a very controversial year for all hotels. “For a few months we have seen last minute house occupations and strong demand, but in the big picture we have made a notable setback in the hotel sector. The last time the number of foreign tourists was at the same This year’s level was more than 10 years ago, more precisely in 2010,” he said.
International clientele
Killu Maidla, chief executive of the Hotel and Restaurant Association, also pointed out that overnight stays by foreign tourists overall have not yet returned to pre-pandemic levels. Approximately 25% of the volume of overnight stays still remains to be made. “Of course this is felt especially in hotels where there are few local overnight stays. For example, in Tallinn the proportion of Estonians has always been significantly lower than in Pärnu or Kuressaare.”
However, on New Year’s Eve Tallinn hotels tend to have an international clientele. “In general, the occupancy of hotels on New Year’s Eve is quite good, but there are still places and it cannot be said that it is sold out. Hotels with an entertainment program and special dinners are better filled, the locals continue to be fascinated by the presence of a spa in the hotel, and in winter it offers a significant advantage,” described Maidla.
But there will definitely be difficult months ahead, as January and February fills have never been good. The tourist activity is very seasonal. At the same time, according to him, it is currently difficult to predict more precise results, as the time for advance notice of reservations is getting shorter every year. “It is no longer uncommon for an event with dozens of participants to be planned a few weeks in advance. The tourism sector is actively working to secure the new summer season,” confirmed the general director of the hotel association.
Christmas market experience
However, Madis Laid, president of the board of directors of Duco Hotels, welcomed the end of the Christmas period, as the number of Finnish tourists has increased, although it is still below expectations. However, this is a sign of recovery compared to 2019 data. It is also positive that Latvians have discovered Estonia and Tallinn, and their number of visits continues to be stronger than previously observed.
According to him, the Christmas market on Raekoja Square has made an important contribution to the development of winter tourism in Tallinn, offering visitors positive experiences, which they have already highlighted several times in their reviews. “Thanks to good marketing, the Christmas market has been discovered by visitors from many different countries and continues to be very positive for the entire hospitality industry,” he added.
New Year’s Eve also promises to be brilliant, especially as regards New Year’s Eve bookings, dominated by Finnish tourists. It gives hope for a positive end to the year and a positive start to the new year.
Laid underlined that if in previous years oriental tourism had dominated, this disappeared after the war in Ukraine and with it the holiday period, which filled hotels and restaurants in the first week of January. “The accommodation and restaurant sector has not found a new market to replace it, but cooperation with the city of Tallinn, the state and various foundations is underway to do so,” he said.
Decrease in competitiveness
Estonia’s tourism sector has shown signs of improvement this year, but the journey has not been without obstacles. Despite some declines, such as last October, which in terms of the number of tourists even lagged behind last year, the general trend is positive. However, Laid fears lower competitiveness compared to neighboring countries, which leaves the path towards tourism recovery uncertain. Furthermore, the planned increase in housing sales tax will further aggravate this situation.
“At the moment, the hospitality sector also needs to prepare to be competitive with the large VAT increase expected next year. The catering sector struggles with high input prices and with neighboring countries, which have a more favorable and the ability to offer better prices to guests,” he said.
However, according to Laid, the Estonian tourism sector has demonstrated resilience and adaptability, despite the current challenges. “We will continue to work to make Estonia an even more attractive destination for both domestic and foreign visitors.”
2023-12-29 11:14:27
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