The Estonian Economy - September 2016
Tourism: can the success be sustained?
• Estonia has been an attractive tourist destination
• Growth despite fewer visitors from Russia and Finland
• Challenges and opportunities in 2017

Estonia has been an attractive tourist destination
Estonia has been rather successful in attracting tourists. The number of tourists per person has been higher than in Latvia, Lithuania, Finland, or Sweden, or the European Union (EU) average. Estonia’s net occupancy rates are also above the European average. Local tourism has been more active in Estonia than in other Baltic countries, but more sluggish than in Finland or Sweden or the EU average, where higher living standards enable higher expenditure on leisure and entertainment, and longer distances mean greater need for accommodation services.

Growth despite fewer visitors from Russia and Finland
The number of domestic tourists (40% of clients) has increased substantially in recent years, offsetting smaller flows from Russia and Finland. During the first six months of 2016, the number of tourists from Russia stabilised, while the number of tourists from Finland started to grow again. The sector’s economic indicators also improved: turnover was 17% and profits 10% higher during the first six months of 2016 compared with the same period in 2015.

Challenges and opportunities in 2017
Next year will bring some challenges and opportunities for Estonia’s tourism sector. Estonia will raise the value-added-tax (VAT) on accommodation services, thereby accelerating the convergence of average prices with Western Europe. The recovery of the Finnish and Russian economies, the expected strengthening of the Russian rouble against the euro, and the EU presidency should support tourism flows next year. The number of nights spent by Estonian tourists could grow less quickly in 2017 as the Estonians’ purchasing power is forecast to grow more slowly than in 2016.



PDF Tourism: can the success be sustained?

For more information about this report, please contact Ms. Liis Elmik, liis.elmik@swedbank.ee, +372 888 7206.

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