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Tourism in the Baltic States in the ascendant – need of new hotels.
Thursday, 21st August 2014
Source : TOPHOTELPROJECTS
Tourism is a key driver of income and employment in the Baltic States. Estonia, Latvia and Lithuania have more guests in the past years as in 2012 and according to recent analyses, the industry will grow above-average during the next ten years.

The congress tourism counts as upgradeable. Thanks to the recent good development, there are now again some investment projects. According to TOPHOTELPROJECTS, the worldwide leading provider of b2b hotel data, currently six new large hotels are in the pipeline in Latvia, Estonia and Lithuania.

Impetus for tourism in the Baltic States: In the next ten years the travel industry in Estonia will grow by 3.7 percent per year, 5.8 percent in Latvia and in Lithuania by 5.2 percent. Expected by analysts of the World Travel & Tourism Council (WTTC) in its latest forecast, the Baltic States are above the global average annual growth of 4.0 percent.

Already last year, the travel industry has grown vigorously. But currently there are dangers for the tourism in the region: given the Ukraine crisis, the uncertainty can be felt by guests not only from outside Europe. Besides the weak ruble and the slow development of the Russian economy. It is expected that the deal with the large number of travellers from Russia, visiting the Baltic States, is experiencing a damper.

Regarding the attractiveness of the tourism industry, the Baltic States has upside potential. In the world rankings for competitiveness of the travel and tourism industry in 2013 of the World Economic Forum in Davos, Estonia is ranked 30 of 140 countries. Latvia and Lithuania are at positions 48th and 49th.

The Davos "Travel & Tourism Competitiveness Report", which is published every two years, certify very high marks in terms of environmental compatibility and cleanliness of the Baltic tourism industry. Significantly worse it looks when it comes from international flights. Estonia is far slipped to rank 87 th, Latvia and Lithuania are on places 40th and 75th. This data has been revealed by the "Global Competitiveness Report 2013-2014", which is updated by the World Economic Forum annually.

One reason for the poor flight connections in the Baltics is the lossy Estonian Air. The airline has transported just over 0.5 million passengers in 2013, almost 40% less than in 2012, the network was thinned. Also in Latvia the national Carrier Air Baltic needed to be nationalized. Last both companies have their route network, expanded again to Germany for example. In addition Latvia is expanding the Riga International Airport with EU funding in the amount of 95 million euros. The large and modern center for VIP travelers could already be opened.

With 5.7 million nights the Estonian tourism sector has scored the most bookings in 2013 under the Baltic States. This is mainly due to the large number of Finnish guests, who come mostly from the just 80 kilometres away Tallinn - Helsinki. Germany ranks, which relates the number of overnight stays, in fourth place. According to the National Statistics Office visits from Russia are increasing in August 2014.

Photo: Hilton Hotel Tallinn

4Hoteliers Image LibraryThe National Development Plan for Tourism 2014 to 2020 provides for public investment in the sector in the amount of 123 million euros. The agenda includes support for the construction of a conference and exhibition center, the establishment of a network for the many small ports and attractions for family tourism.

In Latvia Russian visitors dominate

In Latvia, the nights have increased by 6.4 percent in 2013 to almost 3.8 million. As before, the visits from Russia are increasing significantly in 2013 to more than 33 percent, this is mainly because that there is still a very strong Russian minority in the country. Germany is what the number of foreign overnight stays relates to second place - after Russia.

Overall, the property agent Colliers expect in its market report for the Baltic States in 2014 that the investments will continue to rise in the Baltic tourism real estate. As European Capital of Culture in 2014 Latvia's capital Riga is attracting additional tourists this year, as well as additional investors as youngest Euro member, writes Colliers in "Real Estate Market Overview 2014 - Latvia, Lithuania, and Estonia ". The accommodation prices in Riga belong to the cheapest among European capitals.

In 2013, two four-star hotels have opened in the historic city of Riga, the Astor with 60 and the Wellton Center with 120 rooms. In 2014/15 are at least three more hotels planned, including another Wellton as well as a Mercure. The FG Royal has found an investor from Azerbaijan. Colliers is expecting - probably overlooking Mariott and Sheraton - that another international hotel chain implemented market entry in this year or next year.

Euro adoption is also boosting tourism in Lithuania

Lithuania will introduce the Euro in the turn of 2014/2015, a move that will pull investors into the country. In addition, the EU presidency could boost the conference market in the second half of 2013. The Louvre Hotel Group - as announced - opened the Campanile at the airport in 2013, local chains are now present with the European City Aurora in Klaipeda (144 rooms) and the Amberton Green Apartments in Palanga (59 rooms).

According to Colliers there are plans of the international hospitality to open new properties or to redesign old ones. More concretely, there are projects in tourism departments, for example, an ethno-village on the beach of Zibininkai in Palanga. Also new wellness and spa centers are very popular.

After more than three years of standstill other property, the L'Erimitage, has opened until December of 2013 in the Estonian capital, Tallinn. Also the Hilton chain plans to enter Estonia. They are planning the opening of a conference hotel including spa with more than 200 rooms by 2016. By the end of 2015, the Reval Park Hotel will be demolished and replaced by a 13-storey building. On the other hand, the Swedish hotel chain Scandic has withdrawn from Estonia. Their traditional Palace Hotel was taken over by the Estonian real estate funds Eften Kinnisvarafon.

According to the World Travel & Tourism Council accounted just over 22 percent of industry revenue on business trips in Estonia in 2013, in Latvia there were over 17 percent and in Lithuania almost 19 percent. The rest comes about through the holiday tourism. In the business the Baltics states is below the European average of around 23 percent. The countries could better promote conference tourism, say industry experts. With its World Heritage, the capitals of Tallinn, Riga and Vilnius and traditional seaside resorts have a lot of potential.

Further information: www.tophotelprojects.com
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