Sunday February 1, 03:27 AM
Estonian tourist trade turns to IT to fight recession
By Anneli Reigas
TALLINN (AFP) - As former economic tiger Estonia sinks ever deeper into recession, its tourist trade is trying to use the Baltic state's reputation for IT wizardry to offset the end of its boom years.
"Competition in the hotel market in Tallinn is very hard, especially since 2007, when the number of hotel rooms in town increased by 21 percent in just a year," Feliks Magus, chairman of the Estonian Hotel and Restaurant Association, told AFP.
"New tricks, taking advantage of IT innovations like free Skype phones in guest rooms, are meant to attract clients, as well as helping to save everyday costs for hotel management on international phone calls," Magus said, referring to the Estonian-founded Internet-based service.
Estonia, a nation of 1.3 million people, broke free from the crumbling Soviet bloc in 1991. It rapidly became one of the most wired countries in the world after a government drive to use IT to power up the economy.
It has enjoyed stellar growth, especially since joining the European Union in 2004. Growth was 10.4 percent in 2006 and 6.3 percent in 2007.
But Estonia slid into recession in 2008 as rampant inflation dented domestic consumption.
The global economic crisis compounded the bleak picture by hitting exports -- as well as the tourist trade, as many would-be foreign visitors stay at home.
The economy contracted by an estimated 2.8 percent in 2008. Authorities expect it to shrink by 4.5 percent this year, although analysts say it may plunge by as much as 7.0 percent.
Dozens of hotels built in the picturesque capital Tallinn during the boom are now struggling and are slashing costs by firing staff, closing for the winter and offering hefty discounts via their websites.
One of Tallinn's newest hotels is trying to draw visitors by offering free unlimited international calls via the Skype Internet service, which has more than 370 million users worldwide.
Magus said other hotels were following suit.
Skype, founded in 2003 by two Estonians in Tallinn, has developed wireless phones that do not require a computer to make calls.
At Skype's office in Tallinn, the sudden flurry of recession-tied business was welcome.
"The success has been an unbelievable surprise for us at Skype too," Sten Tamkivi, general manager of Skype Estonia, told AFP.
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