TOURISM IN ESTONIA IN 2008

Tourism in Estonia in 2008 (as of June 2009) 1 TOURISM IN ESTONIA IN 2008 Inbound tourism In terms of inbound tourism, 2008 showed better results th...
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Tourism in Estonia in 2008 (as of June 2009)

1

TOURISM IN ESTONIA IN 2008 Inbound tourism In terms of inbound tourism, 2008 showed better results than 2007. Several markets that decreased in 2007 showed a recovery in 2008. While tourism in Europe stagnated in 2008 (according to the UNWTO Barometer issued in January 2009, tourism to European countries increased by just 0.1%), Estonia achieved a 3.7% increase in tourist arrivals. 1.97 million foreign tourists stayed overnight in Estonia in 2008 (+3.7% compared to 2007). Among them, 1.43 million stayed at accommodation establishments, and about 0.54 million stayed with friends or relatives or at their own apartments. Several factors facilitated the development of inbound tourism in 2008: • The new fast ferries that started sailing year-round between Tallinn and Helsinki in 2007 and in spring 2008 contributed to increased traffic from Finland, especially during the first half of 2008. Also, thanks to the warm winter, the catamarans sailed between Tallinn and Helsinki about 1.5 months longer than usual (in the first quarter of 2008). • Joining the Schengen Area on 21 December 2007 facilitated travel from Russia. Abolishing the border control between the Baltic and other Eastern European countries also facilitated multi-country touring (combining Estonia with the Baltic or Nordic countries) for other nationals. • The substantial increase in the number of new hotel beds in Tallinn during 2007 resulted in increased marketing efforts (incl. favourable offers) by the hotel sector which seemingly contributed to the increase in tourism from nearby countries (especially during the first half of 2008). 1.43 million foreign tourists stayed overnight at Estonian accommodation establishments in 2008. Compared to 2007, their number increased by 3.8% (+53,000 tourists). The number of nights spent by foreign tourists amounted to 2.93 million, increasing by just 0.6%. The main reason for such a small increase in overnights was the continuing decrease of Finnish overnights in health spas (where the average length of stay is somewhat longer than at the other accommodation establishments). Holidays accounted for 62% of foreign overnights, conference trips for 3%, other business trips for 15% and other trips (incl. health treatment holidays) for 19% of foreign overnights. Holiday tourism increased by 6% and conference tourism by 18% (after a decrease in 2007). Overnights on other business trips decreased slightly (-2%) whereas overnights on other trips continued to decrease substantially (-14%). After three consecutive years of decline, arrivals from the main inbound market Finland increased by 3% in 2008. Overnights, however, decreased slightly (-0.7%) due to the continuing decrease of Finnish overnights in health spas. Thanks to the warm winter, the catamarans started to sail between Tallinn and Helsinki about 1.5 months earlier than usual. This and also the new type of fast ferries that started sailing year-round between Tallinn and Helsinki in 2007 and in spring 2008 contributed to increased traffic from Finland, especially during the first half of 2008. In absolute figures, the biggest increase occurred in their most popular destination Tallinn (after two years of decline), whereas the biggest decrease occurred in the Finns’ second most popular destination Pärnu (4th consecutive year of decline). In other words, their short holiday trips (with one or two overnights) to Tallinn increased whereas their spa and health treatment trips continued to decrease.

Tourism in Estonia in 2008 (as of June 2009)

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Joining the Schengen Area on 21 December 2007 facilitated travel from various countries. In particular, tourism from Russia, which decreased in 2007 due to political problems, increased substantially throughout 2008. Due to the general strong growth trend in Russian outbound tourism, the number of Russian tourists increased significantly not only from the 2007 level but also compared to the 2006 figures. However, the trips were somewhat shorter than in previous years, possibly because the Schengen Area enabled more Russian tourists to visit Estonia on a multi-destination trip with shorter stays in each destination country. In absolute figures, the biggest increase occurred in their most popular destination Tallinn but the substantially smaller East Viru County (their second most popular destination) also experienced a significant increase. Following the strong growth trend of 2007, tourism from Latvia increased substantially also in the first half of 2008. This growth trend can be attributed to the additional marketing activities by the public and private sector and the general growth trend in Latvian outbound tourism. However, starting from July, tourism from Latvia showed a decline. Apparently, the main reason was the worsening economic situation in Latvia. Possibly, the rainy weather in summer had also some negative impact on the results of July and August. The number of Latvian tourists in Tallinn (their most popular destination) increased by just 0.7% but as their trips were shorter than in 2007, their overnights in Tallinn decreased by 10%. Their second most popular destination – Saaremaa Island – attracted a substantial growth during the low season (especially in the first quarter) but experienced a small decline during the summer months. On the other hand, Latvian arrivals and overnights in Tartu and Pärnu (their 3rd and 4th most popular destinations in Estonia) increased considerably throughout the whole year. Tourism from Lithuania maintained the strong growth trend of the past three years throughout 2008. The biggest increase (in absolute figures) occurred in their most popular destination Tallinn but also their second most popular destination Saaremaa Island continued to enjoy strong growth. Tourism from Germany increased by 6% (after a decrease both in 2006 and 2007). Most of the increase occurred in Tallinn (their most popular destination) in the high season (from May to August). Apparently, both some additional transport connections and easier border crossings in the Schengen Area (which facilitated multi-country touring holidays in the Baltic/ Nordic countries) contributed to the increase in spring and summer. However, starting from November the number of flight connections between Estonia and Germany were reduced. This had a negative impact on German arrivals in November and December (although tourism from Germany to Estonia is rather seasonal and the absolute figures in the winter season are small). Some important markets showed a decline: notably Sweden and the UK (both decreasing for the second consecutive year) and Norway (decreasing after a substantial increase during the past three years). Decrease from Sweden, Norway and the UK can be explained by a combination of several factors: e.g. lack of new stimuli for growth (new tourist products, competitive transport connections, especially from regions outside the capital cities, etc.); better competitive position of similar destinations, such as Latvia (in terms of novelty and flight connections) and increase of prices in Estonia. In the case of UK outbound tourism, there has apparently been a general decrease in interest in secondary short breaks in 2007 and especially in 2008. Of the smaller source markets, tourism from the United States decreased (after two years of good increase). The number of U.S. tourists and overnights decreased in most European countries in 2008, apparently due to the economic downturn and the low U.S. dollar (until autumn). In addition to overnight tourists, the number of cruise passengers visiting Tallinn for one day increased substantially (+28%) in 2008 (from 293,000 in 2007 to 375,000 in 2008). The number

Tourism in Estonia in 2008 (as of June 2009)

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of cruise ships sailing on the Baltic Sea increased and several ships were also larger than in the previous years. Of the cruise passengers visiting Tallinn, 21% were from the United States, 18% from the United Kingdom, 15% from Germany, 13% from Spain and 6% from both Sweden and Italy. With 298 cruise ship calls, Tallinn was the third most visited destination on the Baltic Sea, following St. Petersburg and Copenhagen (which attracted 311 and 301 calls, respectively).

Domestic tourism Following several years of strong growth, domestic tourism showed modest results in 2008. The most important factor contributing to the strong growth in 2006 and 2007 was the economic growth which enabled Estonian residents to make more domestic holiday trips and also contributed to the increased spend on conference and incentive trips by the public and private sector. However, the first months of 2008 showed a slowdown in domestic tourism and starting from June, domestic tourism decreased (taking into account domestic arrivals and overnights at accommodation establishments only). The main reason behind the decrease is the economic slowdown which reduced business and incentive travel already starting from the first quarter of 2008. Domestic holiday travel decreased mainly from June to September – in addition to the worsening economic conditions the rather rainy weather during the summer months and numerous attractively priced outbound holiday offers in winter and spring may also have had some negative impact on domestic trips in summer. 944,325 domestic tourists stayed overnight at Estonian accommodation establishments in 2008. Compared to 2007, their number decreased by 18,400 or by 1.9%. The number of nights spent by domestic tourists amounted to 1.67 million, decreasing by 5% - as both business and private trips were slightly shorter than in 2007. Both health spas and spa hotels as well as other accommodation establishments experienced a decline. Holidays accounted for 44% of domestic overnights, conference trips for 6%, other business trips for 26% and other private trips for 24% of domestic overnights. Overnights on holiday trips increased by 0.8% while overnights on other private trips decreased by 7% and overnights on business and conference trips decreased by 11%.

Revenue from tourism After a decrease in 2007, tourism receipts started to increase again in 2008, exceeding also the level of 2006. In 2008, Estonia’s tourism receipts amounted to EUR 1.12 bil. This was 9.1% more than in 2007. Travel receipts (foreign visitors’ expenditures in Estonia) amounted to EUR 820 mil. (+9% compared to 2007). Fare receipts amounted to EUR 304 mil. or 10% more than in 2007. The share of tourism receipts in Estonia’s total exports of goods and services was 9.3% (in 2007, it was 9.1%).

Compiled by: Piret Kallas, Research Coordinator Estonian Tourist Board Enterprise Estonia

Tourism in Estonia in 2008 (as of June 2009)

4

Arrivals and overnights at all accommodation establishments of Estonia by country of residence Arrivals at accommodation establishments 2004

Total domestic foreign Finland

2005

2006

2007

2008

change (compared to the previous year) 2005

2006

1 922 126 2 072 586 2 259 087 2 343 044 2 377 671 150 460 186 501 547 712

619 168

831 504

962 721

944 325

1 374 414 1 453 418 1 427 583 1 380 323 1 433 346

2007

2008 2005 2006 2007 2008

83 957 34 627

8%

9%

4% 1,5%

71 456 212 336 131 217 -18 396 13% 34% 16% -1,9% 79 004 -25 835 -47 260 53 023

6%

-2%

-3% 3,8%

728 181 -44 732 -50 007 -42 008 21 057

-5%

-6%

-6%

3%

4 806 28% -18%

-3%

6%

843 871

799 139

749 132

707 124

Germany

85 643

109 346

90 073

87 109

91 915

23 703 -19 273

Sweden

89 042

108 234

105 939

90 221

86 308

19 192

-2 295 -15 718 -3 913 22%

-2% -15%

-4%

Russia

42 348

53 427

67 201

56 407

82 280

11 079

13 774 -10 794 25 873 26% 26% -16%

46%

Latvia

40 956

51 558

65 559

74 667

79 527

10 602

14 001

Norway

35 798

41 273

48 863

55 999

47 240

5 475

7 590

UK

38 903

62 926

61 393

56 113

46 575

24 023

-1 533

Lithuania

20 555

24 703

29 889

35 561

41 396

4 148

5 186

5 672

Italy

25 642

26 712

26 753

24 901

26 280

1 070

41

-1 852

Poland

11 301

14 194

14 240

18 555

20 859

2 893

46

4 315

USA

19 411

19 506

19 856

22 169

19 185

95

350

France

15 086

16 921

16 510

17 813

18 522

1 835

-411

1 303

709 12%

-2%

8%

4%

Spain

12 177

15 533

15 148

17 454

17 844

3 356

-385

2 306

390 28%

-2% 15%

2%

Denmark

13 915

15 407

16 206

14 053

14 281

1 492

799

-2 153

228 11%

5% -13%

2%

Holland

10 490

12 714

13 688

12 229

12 533

2 224

974

-1 459

304 21%

8% -11%

2%

7 362

8 066

8 093

6 799

6 862

704

27

-1 294

63 10%

0% -16%

1%

Japan

Overnights at accommodation establishments 2004

2005

2006

2007

2008

-2 964

9 108

4 860 26% 27% 14%

7%

7 136 -8 759 15% 18% 15% -16% -5 280 -9 538 62%

-2%

-9% -17%

5 835 20% 21% 19% 1 379

4%

2 304 26%

2 313 -2 984

0%

0%

16%

-7%

6%

0% 30%

12%

2% 12% -13%

change (compared to the previous year) 2005

2006

2007

2008 2005 2006 2007 2008

Total

3 757 715 4 111 577 4 543 330 4 674 501 4 602 212 353 862 431 753 131 171 -72 289

domestic

1 010 909 1 129 118 1 522 963 1 759 045 1 669 550 118 209 393 845 236 082 -89 495 12% 35% 16% -5,1%

foreign

2 746 806 2 982 459 3 020 367 2 915 456 2 932 662 235 653

Finland

1 664 799 1 581 685 1 501 481 1 425 926 1 415 884 -83 114 -80 204

37 908 -104 911

9% 11%

17 206

9%

1%

-3% 0,6%

-75 555 -10 042

-5%

-5%

-5% -0,7%

Germany

163 842

215 892

185 550

177 355

187 665

52 050 -30 342

Sweden

184 871

235 202

236 998

195 748

185 592

50 331

1 796

Russia

101 546

138 508

176 862

149 663

198 319

36 962

38 354

Latvia

59 532

74 880

101 300

119 429

123 299

15 348

Norway

81 288

105 432

134 741

148 254

125 683

24 144

UK

94 843

159 141

155 667

140 230

112 423

64 298

-3 474

Lithuania

32 068

40 925

52 202

61 207

69 555

8 857

11 277

9 005

Italy

52 507

59 553

61 348

60 393

60 692

7 046

1 795

-955

Poland

22 681

26 459

31 802

38 274

48 254

3 778

5 343

6 472

USA

44 492

44 349

49 460

53 599

46 014

-143

5 111

4 139

France

28 962

33 990

35 817

37 791

38 416

5 028

1 827

1 974

625 17%

Spain

21 878

28 634

29 362

35 442

38 510

6 756

728

6 080

Denmark

28 510

32 445

34 358

30 946

31 684

3 935

1 913

-3 412

Holland

21 698

26 095

29 145

26 873

27 662

4 397

3 050

-2 272

789 20% 12%

15 516

12 246

12 143

1 176

166

-3 270

Japan 14 174 15 350 Source: Statistics Estonia

3% -1,5%

-8 195

10 310 32% -14%

-4%

6%

1% -17%

-5%

-27 199

48 656 36% 28% -15%

33%

26 420

18 129

3 870 26% 35% 18%

3%

29 309

13 513 -22 571 30% 28% 10% -15%

-41 250 -10 156 27%

-15 437 -27 807 68%

-2% -10% -20%

8 348 28% 28% 17% 299 13%

3%

-2% 0,5%

9 980 17% 20% 20% -7 585

0% 12%

26%

8% -14% 6%

2%

3 068 31%

3% 21%

9%

738 14%

6% -10%

2%

-103

8%

5%

14%

-8%

3%

1% -21% -0,8%

Tourism in Estonia in 2008 (as of June 2009)

5

Overnights of foreign and domestic tourists at accommodation establishments (thous.), 1994-2008. Source: Statistics Estonia. 4800 4600 4400 4200 4000

Domestic overnights

3800

1523 Foreign overnights

3600

1759

1670

1129

3400

- 5% 1011

3200 3000 2800

817

2600 2400

698

626

2200 2000

613

1800

606

1600

593

1400

2747

517

1200

596

1000

518

523

800 600 400

594

200

753

886

1995

1996

1079

1187

1997

1998

1911

1998

2001

2002

2982

3020

2915

2933 +0.6%

2005

2006

2007

2008

2268

1598

1329

0

1994

1999

2000

2003

2004

450 2005

2006

2007

2008 375 384 368 379

2004

439 432 427 440

433

Overnights of foreign tourists at accommodation establishments of Estonia, 2004-2008 (thous.).

318 332 312 321

174

168 172 177 168

188 197 179 178

188

242 246 229 228

299

275 280 255 241

260

242

223

203

266

288 289

154

141 139 144 153

123

108

150

125 134 138 133

200

190 178 177 179

250

232 236 243 213

300

294

350

344

400

100

50

0 Jan

Feb

March

April

May

June

July

August

Sep

Oct

Nov

Dec

Tourism in Estonia in 2008 (as of June 2009)

6

Overnights of foreign tourists at accommodation establishments by country of residence, 2003-2008 (thous.). 3100 3000 2900 2800 2700 2600 2500 2400 2300 2200 2100 2000 1900 1800 1700 1600 1500 1400 1300 1200 1100 1000 900 800 700 600 500 400 300 200 100 0

431

476

41

52

159 75 105

156

61

70

101 135

140

Lithuania

119

112 123

148

126

UK

514

498 364 32

95 60 81

318

235

185

237

23

73 43 61 134

164

216

102

188

177

177

122 81

186

196

186

139

other foreign

Latvia

198

150

Norway Sweden 1665

1582

1412

1501

1426

Germany

1416

Russia Finland 2003

2004

2005

2006

2007

2008

Foreign tourists and their overnights at accommodation establishments by purpose of trip, 20042008 (thous.). Source: Statistics Estonia. 3200 3000

Other purpose

2800

Other business trip

2600

Conference trip

2400

Holiday trip

750

734

648

555

750

2200

454

2000

459

464

99

80

1638

1729

1723

2005

2006

2007

494

95

1800

455

99

1600 101

1400 159 1200 249 1000

63

168

159

257

230

59

50

151 235

124 228 60

43

800

1829

1442

600 400

903

968

989

952

1022

2004

2005

2006

2007

2008

200 0

Arrivals

2004

Overnights

2008

Tourism in Estonia in 2008 (as of June 2009)

7

Overnights of domestic tourists at accommodation establishments of Estonia, 2004-2008 (thous.). 260

2008

174

110

123 112

105

122 123

111 119 110

75

81

67

75

64

71

63

92

96

110

124 131

148

135

125

120 124

113 109 89 65

60

77

76

72

65

66

67

100

110

95

109 113 94

120

80

118 122

140

125 127

160

159

166

180

176

187

200

194

220

109

2007

82

2006

70

2005

211

2004

221

240

239

241

253

60 40 20 0 Jan

Feb

March

April

May

June

July

August

Sep

Oct

Nov

Dec

Overnights of domestic tourists at accommodation establishments by purpose of trip, 2004-2008 (thous.). Source: Statistics Estonia. 1800

change 2008/ 2007

1700 1600

Other purpose

1500

Other business trip

1400

Conference trip

1300

Holiday trip

431 402

-7%

440

-10%

395

1200 1100

487

1000 900

286 401

232

800 700 600 500

290 282

94

728

734

2007

2008

-17%

104

67 62

+0,8%

400 624

300 200

113

436

486

100 0 2004

2005

2006

Tourism in Estonia in 2008 (as of June 2009) Room occupancy rates of accommodation establishments, 2005-2008 (%). Source: Statistics Estonia.

% 68 66 64 62 60 58 56 54 52 50 48 46 44 42 40 38 36 34 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0

8

67 60

2005

2006

2007

2008

58 55

55

54

51

51 51 49

48 45

45

47

46

46 44

41 37

39

38

37

43 41

40

39

39

38

36

36

35

34 32 30

32 62

29

59

54 50

49

46

45

43 39

38

35 31

Jan

Feb

March

April

May

June

July

August

Sep

Oct

Nov

Dec

Accommodation capacity in Estonia Growth 2005 2006 2007 2008 2006/05 2007/06 2008/07 14,474 16,613 18,068 19,684 15% 9% 9% 31,589 37,494 40,427 44,117 19% 8% 9%

Number of rooms Number of bed places

Source: database of Statistics Estonia Travel services and passenger transport in Estonia's Balance of Payments (EUR mil.). Source: Bank of Estonia. 1200

Passenger transport: exports (foreign residents' payments to Estonian transport companies)

1100

Travel services: exports (foreign visitors' expenditures in Estonia)

1000

Passenger transport: imports (Estonian residents' payments to foreign transport companies)

900

181

700 600 116

500

0

162

173

190

187

63

717

69

200

-100

144

111

400

100

277

208

800

300

304

268

Travel services: imports (Estonian residents' expenditures abroad)

373

422

-78 -31

-108 -38

484

518

553

569

585

592

-202

-221

-214

-243

-281

-53

-69

783

811

754

820

260 -66 -22

-200

-138 -37

-38

-300

-78

-75

-400

-321

-70

-352 -465

-487

-95

-98

-550

-73

-500

-88

-600 -700 1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008