Hospitality: German tourists return to Estonia | New

When the full-scale invasion of Ukraine began, travelers from more distant countries canceled their hotel reservations and there was a lot of uncertainty in the air. However, people are now ready to visit Estonia again, said Käpp, chairman of the board of the Radisson Collection, the Palace Hotel Tallinn as well as the Estonian Hotel and Restaurant Association (EHRL).
“We talked a lot about Estonia’s security at the state level, but tourism is allergic to these topics, and the war definitely affects it,” he explained. “Unfortunately, many are now ready to travel as they are used to the situation. German groups who first canceled their trips, are now slowly starting to return.”
Nevertheless, the Estonian hotel and catering sector still has a long way to go before it can recover to pre-crisis levels.
“Due to a 30 to 35 percent drop in sales, our costs have increased,” Käpp said. “We are delighted that tourists and visitors are returning to Estonia. Locals have also regained interest in domestic travel during the crisis, as evidenced by statistics showing that they now vacation in Estonia.”
According to the executive, the high room rates that residents worry about are actually limited to just a few days.
“If you want a nice weekend at a resort, it’s reasonable to expect to pay a higher price,” he said. “However, even with timely bookings, there is a significant price difference between a holiday in Scandinavia and Europe and a holiday in Estonia, which would benefit local businesses. The catering sector is also forced to increase prices in response to market changes.
A 50% increase in ferry ticket prices has had a negative impact on tourism.
“Fuel prices have also gone up,” Käpp continued. “Attractive national destinations, such as islands, are struggling. The state could join us here in a collective effort to restore tourism.”
Unlike Kuressaare, hotel prices in Tartu have increased.
“These are serious warning signs,” Käpp said. “Hotels are running, but we also have to repay the debts incurred during the crisis. Companies are in a difficult situation.”
Nevertheless, he added that “the general outlook for this summer is good”.
A potential increase in the national minimum wage would also affect the hospitality and service sectors.
“We pay more than the minimum wage in general, but since we are the first employer for many young people, we pay them the minimum wage,” Käpp explained. “This is where I see a risk to the industry’s ability to attract young people to the job market in the future.”
EHRL has submitted proposals to the Estonian government regarding the regulation of employment opportunities for young people.
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