Estonia, Latvia and Lithuania Tourism Report 2012
2010 was a strong year for the Baltic tourism industry. In all three Baltic countries tourist arrival numbers rose sharply. Latvia welcomed the most tourists overall (5.04mn), with Estonia attracting 4.25mn and Lithuania 4.1mn. These figures incorporate same-day and overnight arrivals.
Looking at trends in 2011, all three countries reported higher hotel occupancy rates over the key summer months, which bodes well for the full-year tourist arrivals figures. We forecast growth in tourist arrivals of 12% for Estonia, 15% for Latvia and 10% for Lithuania in 2011. Looking ahead, we are positive about the outlook for all three countries, with a slight preference for Latvia’s potential growth over the next five years.
Estonia remains the largest tourism market in terms of tourist revenue, generating US$1.43bn in 2010. Lithuania was second with US$940mn, with Latvia in third on US$668mn.
We remain upbeat about the outlook for the Baltic region. Cruise travel is continuing to grow in popularity, with Tallinn’s status as a European Capital of Culture bolstering what we expect to be a record year for tourism revenues in 2011. Riga will be a Capital of Culture in 2014, so we also expect this to draw in tourists and revenue for the country.
Arrivals from Russia should continue to grow strongly throughout our newly extended forecast period to 2016 as a result of rising disposable income and more flights between Russian cities and the Baltic region.
In BMI’s updated tourism business environment ratings, the Baltic countries are towards the top of the table. Estonia is in joint-third place with Romania, Latvia has risen to sixth place and Lithuania now lies in eighth place with Greece. This reflects the strong growth being experienced by the regional tourism industry, bolstered by strong levels of government support.
airBaltic Back Under State Control
Following a 2009 when Lithuanian carrier flyLAL went into bankruptcy and then a 2010 when the Estonian government bought out the majority of SAS Group’s 49% stake in Estonian Air, in 2011 Latvia brought its flag carrier back under state control.
In October 2011, airBaltic returned to effective state control after the ousting of former CEO Bertolt Flick amid mounting financial difficulties at the airline. Flick’s departure was demanded by the government in return for it injecting LVL16mn of emergency funding to keep the airline flying.
The carrier has been pledged EUR153mn in new capital, with EUR81.9mn to come from the government and EUR71.1mn coming from Flick’s company Baltijas Aviācijas Sistēmas (BAS). The IMF has expressed concern that it was not consulted about the authorisation of state aid for the airline. The new CEO of airBaltic is Martin Gauss, a German national who was formerly CEO of Hungarian airline Malév. His first task was to prepare a business turnaround plan for the airline, which has suffered from high costs despite strong growth in passenger numbers in recent years.
Despite the airline’s cash flow concerns, passenger numbers continue to increase, airBaltic carrying 2,661,083 passengers during the first nine months of 2011, an increase of 6% year-on-year (y-o-y). Latvian transport minister Uldis Augulis said he hopes the new management team can return airBaltic to profit by 2013, with the potential reprivatisation of the airline taking place in 2014.
Efforts To Boost MICE Trade
In July 2011, representatives of all three Baltic states met in Vilnius to discuss how to increase the region’s of the lucrative meetings, incentives, conventions and exhibition (MICE) trade, The Baltic Course reported. Although it was still early days, the countries are looking to implement a common emarketing package in 2012 as a starting point for raising the profile of the Baltic region as a MICE destination.
BMI applauds this focus on boosting MICE traveller numbers. The Baltic region is ideally located to attract business travelers from Scandinavia, Central and Eastern Europe and Russia. We will monitor the situation to see how this part of the industry develops in the years ahead.
Looking at trends in 2011, all three countries reported higher hotel occupancy rates over the key summer months, which bodes well for the full-year tourist arrivals figures. We forecast growth in tourist arrivals of 12% for Estonia, 15% for Latvia and 10% for Lithuania in 2011. Looking ahead, we are positive about the outlook for all three countries, with a slight preference for Latvia’s potential growth over the next five years.
Estonia remains the largest tourism market in terms of tourist revenue, generating US$1.43bn in 2010. Lithuania was second with US$940mn, with Latvia in third on US$668mn.
We remain upbeat about the outlook for the Baltic region. Cruise travel is continuing to grow in popularity, with Tallinn’s status as a European Capital of Culture bolstering what we expect to be a record year for tourism revenues in 2011. Riga will be a Capital of Culture in 2014, so we also expect this to draw in tourists and revenue for the country.
Arrivals from Russia should continue to grow strongly throughout our newly extended forecast period to 2016 as a result of rising disposable income and more flights between Russian cities and the Baltic region.
In BMI’s updated tourism business environment ratings, the Baltic countries are towards the top of the table. Estonia is in joint-third place with Romania, Latvia has risen to sixth place and Lithuania now lies in eighth place with Greece. This reflects the strong growth being experienced by the regional tourism industry, bolstered by strong levels of government support.
airBaltic Back Under State Control
Following a 2009 when Lithuanian carrier flyLAL went into bankruptcy and then a 2010 when the Estonian government bought out the majority of SAS Group’s 49% stake in Estonian Air, in 2011 Latvia brought its flag carrier back under state control.
In October 2011, airBaltic returned to effective state control after the ousting of former CEO Bertolt Flick amid mounting financial difficulties at the airline. Flick’s departure was demanded by the government in return for it injecting LVL16mn of emergency funding to keep the airline flying.
The carrier has been pledged EUR153mn in new capital, with EUR81.9mn to come from the government and EUR71.1mn coming from Flick’s company Baltijas Aviācijas Sistēmas (BAS). The IMF has expressed concern that it was not consulted about the authorisation of state aid for the airline. The new CEO of airBaltic is Martin Gauss, a German national who was formerly CEO of Hungarian airline Malév. His first task was to prepare a business turnaround plan for the airline, which has suffered from high costs despite strong growth in passenger numbers in recent years.
Despite the airline’s cash flow concerns, passenger numbers continue to increase, airBaltic carrying 2,661,083 passengers during the first nine months of 2011, an increase of 6% year-on-year (y-o-y). Latvian transport minister Uldis Augulis said he hopes the new management team can return airBaltic to profit by 2013, with the potential reprivatisation of the airline taking place in 2014.
Efforts To Boost MICE Trade
In July 2011, representatives of all three Baltic states met in Vilnius to discuss how to increase the region’s of the lucrative meetings, incentives, conventions and exhibition (MICE) trade, The Baltic Course reported. Although it was still early days, the countries are looking to implement a common emarketing package in 2012 as a starting point for raising the profile of the Baltic region as a MICE destination.
BMI applauds this focus on boosting MICE traveller numbers. The Baltic region is ideally located to attract business travelers from Scandinavia, Central and Eastern Europe and Russia. We will monitor the situation to see how this part of the industry develops in the years ahead.
Contents
Executive SummarySWOT Analysis
Baltic Tourism SWOT
Estonia
Estonia Political SWOT
Estonia Economic SWOT
Estonia Business Environment SWOT
Latvia
Latvia Political SWOT
Latvia Economic SWOT
Latvia Business Environment SWOT
Lithuania
Lithuania Political SWOT
Lithuania Economic SWOT
Lithuania Business Environment SWOT
Industry Forecast Scenario
Estonia
Arrivals
Table: Estonia Arrivals Data, 2008-2016
Accommodation
Table: Estonia Hotels Data, 2008-2016
Expenditure
Table: Estonia Tourism Expenditure Data, 2008-2016
Inbound Tourism
Table: Tourist Arrivals In Estonia By Region, 2008-2016
Table: Tourist Arrivals In Estonia By Country, 2008-2016 (‘000)
Outbound Tourism
Table: Estonian Departures By Destination Country, 2008-2016
Latvia
Arrivals
Table: Latvia Arrivals Data, 2008-2016
Accommodation
Table: Latvia Hotels Data, 2008-2016
Expenditure
Table: Latvia Tourism Expenditure Data, 2008-2016
Inbound Tourism
Table: Tourist Arrivals In Latvia By Region, 2008-2016
Table: Tourist Arrivals In Latvia By Country, 2008-2016 (‘000)
Outbound Tourism
Table: Latvia Outbound Data, 2008-2016
Table: Latvian Departures By Destination Country, 2007-2015 (‘000)
Lithuania
Arrivals
Table: Lithuania Arrivals Data, 2008-2016
Accommodation
Table: Lithuania Hotels Data, 2008-2016
Expenditure
Table: Lithuania Tourism Expenditure Data, 2008-2016
Inbound Tourism
Table: Tourist Arrivals In Lithuania By Region, 2008-2016
Table: Tourist Arrivals In Lithuania By Country, 2008-2016 (‘000)
Outbound Tourism
Table: Lithuania Outbound Tourism Data, 2008-20016
Table: Lithuanian Departures By Destination Country, 2008-2016 (‘000)
Market Overview – Travel
Commercial Airlines
Cruises
Global Oil Products Price Outlook
Market Overview – Hospitality
Estonia
Latvia
Lithuania
Business Environment Outlook
Table: Central And Eastern Europe Travel And Tourism Business Environment Ratings
City Terrorism Ratings
Table: BMI’s Central And Eastern Europe And Central Asia City Terrorism Index
Europe Security Overview
Global Assumptions
Europe On The Edge
Table: Global Assumptions, 2009-2015
Table: Global And Regional Real GDP Growth, 2010-2013 (% chg y-o-y)
Table: Developed Market Exchange Rates, 2010-2013
Table: Emerging Market Exchange Rates, 2010-2013
Developed States
Table: Developed States Real GDP Growth Forecasts, 2010-2013 (%chg y-o-y)
Emerging Markets
Table: Emerging Markets Real GDP Growth Forecasts, 2010-2013 (% chg y-o-y)
Table: Real GDP Growth Consensus Forecasts, 2011-2012 (%chg y-o-y)
Company Profiles
airBaltic
Estonian Air
BMI Methodology
How We Generate Our Industry Forecasts
Tourism Industry
Tourism Ratings – Methodology
Table: Tourism Business Environment Indicators
Table: Weighting of Components
City Terrorism Ratings
Table: City Terrorism Ratings Methodology
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