Outflow of Russian tourists has a bad effect on Estonian economy

The outflow of Russian tourists, growing competition from neighboring states and the raised turnover tax are the key challenges to Estonia’s tourist sector, Managing Director of the Association of Hotels and Restaurants of Estonia Maarika Liivamagi said on air of ETV+.

She said that by late Oct the Russians had bought just 30,000 New Year tours to Estonia, which is more than five times less than last year. 

The next blow will be the 14% turnover tax for Estonian travelling agencies. Experts warn that as a result, the agencies may lose 200,000 tourists more.

“We are trying to put off this measure as it will have a bad effect on our sector. This is our priority,” Liivamagi said.

She said that some other related sectors will also suffer. “Tourists use not only hotels and restaurants but also many other services. For example, they go to hairdresser’s. So, if their number drops, those sectors will suffer losses,” Liivamagi said.

She said that in Latvia and Lithuania the tax is much lower. Besides, Latvia is going to open the offices of such international hotel networks as Hilton, Holiday Inn, Kempinsky, Accor. “This will also have a bad impact on our tourism,” Liivamagi said.

“In this light, we must try to become more competitive – for prices are a good thing but they must not be the only factor attracting tourists to our cities,” Liivamagi said.

Tourism accounts for 6% of Estonia’s GDP. In early 2015, experts predicted the sector to lose 50mn EUR during the year.