Tallinn is the cultural and archaeological center of Estonia. Estonia shares a 180-mile border with Russia (Estonian Prime Minister Kaja Kallas on the war in Ukraine and the Russian threat | PBS NewsHour). Russia’s invasion of Ukraine impacted the Estonian economy due to supply difficulties and higher inflation. Estonia has donated a third of its military budget to Ukraine. Additionally, the country has taken in about 40,000 Ukrainian refugees since February 2022. (Updates: Russia’s invasion of Ukraine – reactions in Estonia (estonianworld.com)

The country has been making slow economic progress due to the negative impact of the Covid-19 pandemic since March 2020. According to Visit Estoniamany hospitality and tourism businesses use the “Covid-19 safe and clean” the label and website suggest this is maintained 24/7/365. It is a violation to show this label if establishments violate the rules.

The hospitality and tourism industry in Estonia may not gain momentum for the remainder of 2022. Although hotel management may lack confidence in the % occupancy trajectory for the remainder of the year, she can continue to make plans for 2023.

There are 157 hotel properties that provided STR data. Of the selected Estonian properties, some of the hotel properties have closed and STR provided class category information for 77 of these properties. The majority of hotels are located in big cities such as Tallinn, Narva, Tartu, Parnu. 40.26% of the hotels are middle class, followed by 25.97% are high-end class, 11.69% are upper-middle class 9.09% are high-end upper class and luxury class a the least number, 5.19%, as shown in the chart below:

The average % occupancy for 2019 was 71.1%, and the Covid-19 pandemic had a negative impact on the % OCC, as it was 26.3% and 37.3% in 2020 and 2021 respectively. The OCC% is 42.4% in 2022 since the beginning of the year. Revenue per available room was 65 euros in 2019, followed by 17.9 in 2020, 21.7 in 2021 and 26.9 in 2022 (year to date). Similarly, the turnover for 2019 was around 14 million euros and only 3 million in 2020 and 4 million in 2021. The figures are improving in 2022, but these are not pre-pandemic figures.

The rich preservation of historical and cultural heritage makes Estonia an attractive place in Northern Europe. The majority of the country is covered in forests and has more than 2000 islands. (https://www.visitestonia.com/en/why-estonia/estonia-facts) It is known to be a place to get some peace, quiet and solitude, and its population increases with the number of immigration increasing every year.

The Estonian Tourist Board plays a key role in strengthening destination management organizations and coordinating the development of tourist products and activities to ensure the best tourist experience. (https://www.oecd-ilibrary.org/sites/ee702954-en/index.html?itemId=/content/component/ee702954-en). The food and drink industry employs most people in Estonia, followed by the hospitality industry. The development of hotels will benefit the growing tourist population and increase the number of jobs for the local population. 5 properties are expected to open between 2023 and 2026. Hampton by Hilton Tallinn, an upper mid-range property, is in the construction phase and is expected to open in April 2024 as per the STR.

Rachel Mammen
Candidate in the Department of Hospitality and Retail at Texas Tech University
+1 806 834 3471
Texas University of Technology