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Baltics Tourism Report 2009
Market |
Travel |
Report Type |
Market Research |
Country |
Eastern Europe |
Published |
26 March 2009 |
Number of Pages |
58 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
Tourism Overview Official tourism arrival data for the whole of 2008 has not yet been released by the authorities in all three Baltic states. The clearest picture is emerging from Estonia, which welcomed some 1,285,017 tourists (excluding EU citizens) over the January-November 2008 period. 11-month data for the country points towards a modest decrease in the number of tourist arrivals to Estonia over the full year, in the order of 3- 4%.
The headline picture in Lithuania is less encouraging, with provisional tourist arrival data (which also exclude EU citizens) for the January-September 2008 period showing a 45.5% decline in the number of tourist arrivals, to 1,114,281. However, airport throughput data, which we use as a proxy for overall tourist arrivals, has shown a strong 20% rise during 2008, although this figure includes EU citizens. No tourist arrivals data for 2008 have yet been made available for Latvia. As a proxy, we have used number of visitors to hotels and other accommodation data from the central statistics bureau of Latvia. These show that some 1.276mn visitors stayed in hotels over the first three quarters of 2008, marking an increase of some 8% y-o-y on the 1.179mn visitors for the same period in 2007. Consequently, we believe that Latvia will have seen an increase in tourist arrival numbers across 2008, unlike its two Baltic neighbours.
We believe that the overall picture for Baltic tourism is somewhat mixed at present. First and foremost, the ongoing global economic credit crunch will impact on tourism industries around the world, and the will be Baltics no exception. Indeed, the Baltic area may feel the crunch worst than others, as cruise tourism could be one area that is particularly hard hit by a retrenchment of consumer spending. In addition, the cost advantage enjoyed by the Baltic states during the early years of the 21st Century has faded somewhat, as prices rise towards EU norms. It seems likely that all three Baltic states will see a decrease in tourist arrival numbers and tourism revenues over 2009. This is primarily due to the ongoing global economic credit crunch. Within the Baltic markets, Lithuania should fare the best, as Vilnius is a European City of Culture for 2009. We then feel that 2010 will mark a short-term low point, before recovery can begin in 2011.
New company profile For our 2009 Baltics report, BMI has added a new company profile: Olympic Entertainment Group (OEG). OEG was established in 1993 by Estonian businessman Armin Karu. Since then it has expanded dramatically across neighbouring states. OEG is listed on the Warsaw and Tallinn Stock Exchanges.
flyLAL ceases operations On January 17 2009, it was announced that Lithuanian flag carrier flyLAL was to suspend operations, effective immediately. The move follows the failure of a proposed buyout deal by Swiss investment firm SCH Swiss Capital Holdings. The airline has debts of some LTL90mn (roughly US$26mn), most of which is owed to Vilnius International Airport. At the end of 2008, the Lithuanian government turned down the chance to buy back a 51% stake in the airline and provide a state-guaranteed loan to ensure flyLAL’s continued operations, which had been negatively impacted by the current credit crunch. If no new buyer is found within the coming weeks, the airline will file for bankruptcy.
Data Difficulties A key problem when dealing with Baltic tourism data is the different approaches to tourist arrivals adopted by each country. Whereas Latvia counts all incoming travellers, Lithuania and Estonia have not counted arrivals from EU countries since their accession in 2004. A standardised approach to data collection could do much to help the development of the tourist sector in the region, as a joined-up approach would clearly identify where tourists are coming from and how best the Baltic states can tailor their tourism product offering to meet this demand.
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