The flow of vacationers is similar to last year
Spring and early summer did not bring much joy to beach entrepreneurs, guests and visitors were attracted to foreign locations with better weather and lower prices, but in the middle of summer the situation changed: the sun warm weather encouraged Lithuanian seaside vacationers.
“At the beginning of the summer, we realized that we will have great challenges to keep the same flows we had in 2021. in the summer because it was really good. All the restrictions have been removed and the foreign locations have invited to relax in Greece, Turkey and elsewhere.
We heard it already in the spring, in May. But when the summer ends, we see that we have overcome the challenge of the flow. It really got close to last summer, “he says Hotels and restaurants in Palanga head of the association Ingrida Valais.
Businesses also felt the invigoration of foreign tourists, although some of them canceled their trips to the Baltic countries in the spring, fearing war. Most of them came from neighboring countries. According to the interlocutor, very few of them visited last year, so businesses are happy with the gradually increasing traffic this year.
However, another major challenge led to worse financial performance.
“Judging by the flow of people, the summer was good, but the inflation that started in the spring and the rising costs have significantly increased our costs, they are higher than last year. This result is obviously worse. costs have risen steadily since March, which has affected all of our services, detergents and food raw materials are becoming more expensive, “he notes.
Vacationers in Palanga
© Mindaugas Milinis
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Prices have gone up by a tenth, people are saving more
Although this summer in Palanga prices increased by an average of one tenth, which did not compensate for the increase in costs.
“Costs have risen more than prices could rise. There have been phases where the price has been reduced. In the beginning, when the weather was not that hot – in June or early July – prices were more bass “, says I. Valaitienė.
It seems that the rise in prices did not scare people, because the weather this summer has attracted Lithuanians to the sea. However, according to the interlocutor, entrepreneurs feel that people are starting to save and visit restaurants less often.
The last month has dealt the biggest blow
According to the head of the Palanga Hotels and Restaurants Association, the last month of summer has dealt the hardest blow to seaside businesses.
“We have received terrible electricity bills, they have risen up to 4 times. Like all businesses, we have applied and are asking the Government to provide assistance measures. We believe this is necessary. Here and now, the energy cost line at times it has increased, we are not able to earn 3-4 times more at once, it is impossible and the heating season is also ahead. It scares us a lot, “he says.
According to the interviewer, there is already talk of worst-case scenarios. According to I. Valaitienė, the scenario of many companies in Palanga will depend on the government.
Ingrida Valais
© DELFI / Justinas Auškelis
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“Some hotels and restaurants wait a week, a second, but if there are no government decisions, we will see various scenarios: business closures, goodbyes until spring or summer,” he adds.
The most worrying thing is to wait for the heating seasons, especially for those activities that heat with gas.
“The heating season is just around the corner and those with gas heating are more afraid of it. When gasoline is 10-12 times more expensive, they can already count on the fact that the money earned in the summer will not be enough for the season. autumnal, “he observes.
The summer money will be enough for just one month
The representative of the entrepreneurs of Palanga believes that the money earned from the summer may be enough to live just one month. He points out that seaside businesses always feel a strong sense of seasonality, with employment and prices halving in autumn.
“In the summer you always manage to make money, we live for the remaining 9 months of the money earned during the summer. If there is no seasonality in the big cities and the occupancy in the hotels is more or less similar, then here in the summer, when employment reaches 90-100%, and prices are 100-120 euros (accommodation – ed), then in the low season the occupation drops to 30-40% and prices drop to 60 euros in a working day, i.e. halve and triple employment “, says I. Valaitienė.
“When everything shrinks, during the heating season you live off the money you made in the summer. What we could have spent in three months, we will now spend on one with such an increase in costs,” he adds.
Weekend in Palanga
© Tomas Sakalauskas
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It solves the question of survival
According to the interviewer, the deterioration of the pandemic situation and the possible consequences do not scare companies, because there is simply no time to think about it. Now it is said that everyone is dealing with energy chaos and raising the fundamental question of survival.
“Here the math is very simple and the scenario is clear: either you will spend all your money and you don’t know what awaits you, and how much more you will have to deposit, because the available money may not even be enough, so is it worth doing?” Maybe then it is better to stop the activities, which would be a shame, “she says.
Furthermore, it is not yet clear whether the subsidized VAT rate will be extended next year: “After all, the subsidized VAT issue is still” suspended “, and it has not yet been confirmed whether it will be extended. In a few months it will be the new one. year and we do not yet know the scenario for next year “.
Prices and visitor traffic are halved
September is already halfway through, so the guest segment is changing to the seaside. Prices are also falling.
“On weekdays, the beach is empty, there’s another event going on in the conference rooms, it’s more of a weekend resort.” If occupancy exceeded 90% in July and August, in September, which is a transitional month, it can be 40-50%. This is already mid-autumn. Prices have already halved as well. And I’m not talking about October and November at all “, teaches I. Valaitienė.
Entrepreneurs cannot raise prices further due to the growing loss of competitiveness with foreign countries.
“We understand that we have to raise prices, because otherwise we will not survive, but we cannot really raise prices as much as our costs increase and impose everything on the consumer. And so we are already losing our competitiveness when neighboring countries pay less for electricity. , so that part is higher in our cost price, “he notes.
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