Expensive transport and business ambitions slow down Estonia

Tour operators, specializing in the Baltic region are reporting an increased demand for Estonia in March. This year, March 8 falls on Friday, so Russians will have a three-day vacation. Operators note, that many tourists have seized the opportunity and made reservations for these dates. Last year, the holiday was in mid-week, so the demand for this same period was minimal.

At the same time, operators are carefully evaluating the results of the winter season in Estonia, for which they had high hopes back in autumn. According to Irina Setun, General Manager of SatMarket, sales for New Year holidays, which are considered to be high dates for the destination, did not fully meet market players’ expectations. Early bookings were off to a good start, but as the New Year’s Eve was coming closer, the sales started to go down. “The railroad is a good indicator. At the end of 2011, Russian Railways introduced an additional train, as well as a charter one, in order to attend to the tourist flow to Estonia. This season, regular Moscow-Tallinn train was enough to handle all the tourists”, explains Mrs. Setun. Neither were there any new air services this season.

Experts say that Estonian hoteliers’ unbounded ambitions are among the reasons for slow sales on the destination. According to Tatiana Fedotochkina, Leading Manager of the destination at Las Floras, a tour to Tallinn during New Year holidays was usually 30-40% more expensive than that to Riga or Vilnius. The end of the year results for 2012 show a 4% decrease in sales of the destination with this particular operator. Yet, other Baltic countries like Latvia and Lithuania show an increase in sales: 17% and 11% respectively.

Still, Estonian experts consider the past year successful. According to official statistics, the number of Russian tourists staying at Estonian hotels has risen by 31%, compared to 2011. Overall more than 2.8 million tourists (foreign and domestic) have put up at local hotels over the course of 2012. According to the country’s Bureau of Statistics, foreigners make up two thirds of the total tourist flow with 64% of them being from neighboring countries: Lithuania, Finland and Russia.

Irina Setun believes that these record numbers are a result of many independent tourists tailoring their own trips on the internet. But market players are going to have some payback soon. “Booking systems started to raise their prices some time ago. Right now it’s pretty hard to find accommodation for €40 per night online. Yet, some operators have special deals with hoteliers, so buying a package tour can save you up to 20%”, concluded the SatMarket spokesperson.

Andrey Zharkov, General Manager of Zharkov Tour, is already taking advantage of the situation. According to him, Estonia was pretty popular in the second half of January 2013. This period is usually considered low, yet 70% of the tours were sold. Russians prefer spa-hotels in Tallinn or on the Saaremaa Island, lying 2.5-hour ferry ride away from the capital.

According to Anastasia Ginters, General Manager of ABClub, the overall demand allowed the company to close the year with a 20% increase in the tourist flow. Yet, most Russians see Estonia as a weekend destination, only viable for short trips. Another popular trend for Baltic-bound tourists is travelling by their own cars. “One of the biggest problems with Estonia is high prices on transportation. For many people, travelling by car is a way to save a lot of money. A return train ticket during high season may cost you almost twice as much as accommodation - €350. The same applies to airfares”, noted Mrs. Ginters.

Early bookings for May holidays are going well, as most operators agree. The demand is pretty high this year, because the 2013holidays will be rather long. Andrey Zharkov explained that some hotels are almost fully booked already. The reason for this is that in the beginning of May Estonia is popular not only with Russian tourists, but with Finnish ones as well.