SPA Tours OÜ has announced two major projects in Tallinn: a €10 million water center in Lasnamäe planned for 2028 and another in Ülemiste. A new spa development is also planned for Telliskivi.

Outside the capital, new spas and spa hotels are also planned in Tartu, Viljandi, Alutaguse Municipality and Pärnu, where one of several upcoming developments is the beachfront spa Part.

Last fall, ERR reported that Estonia's accommodation capacity is projected to increase by about 20 percent in the coming years.

Estonian Chamber of Commerce and Industry (EKTK) director general Mait Palts said accommodation figures from last year showed modest growth led mainly by foreign visitors, while domestic tourism eased slightly.

That means the recent surge in spa projects cannot be explained by local demand alone.

Palts said several converging factors are at play, including "stronger domestic tourism compared with the pre-crisis period, growing potential in nearby markets, gradually improving confidence and long-planned investments now reaching construction or development."

He added that the distinction between spas and spa hotels is key.

"Tourism is a much clearer part of the business model outside Tallinn and in developments with overnight accommodation," the chamber director explained.

A clear niche

The difference is evident in Kurro Nature Spa, a €39 million spa hotel set to open this August on the northern shore of Lake Peipus in Alutaguse Municipality.

The Ida-Viru County project received €13 million from the EU's Just Transition Fund (JTF). Developers said without it, construction would likely have been delayed.

CEO Killu Maidla said entering an already saturated market requires a clear niche.

Kurro Nature Spa, she added, will not compete directly with water centers that attract day visitors, instead focusing on nature, calm and exclusivity.

While not a spa, Funderbeam founder Kaidi Ruusalepp is also pursuing a specific niche with the development of a new hotel in Põlva aimed at an affluent, sports-oriented clientele.

Analysts say many new projects are nonetheless now targeting shorter stays as full spa-hotel packages become less affordable for some families.

Palts, meanwhile, said Tallinn-area developments, including the spa complex coming to Lasnamäe, will rely more heavily on local day guests.

Playing the long game

At SPA Tours, meanwhile, board member Kalle Kuusik found it misleading to describe the current wave of water center projects as a boom.

"There's nothing sudden about these decisions," he said, adding that projects have simply reached similar planning stages at the same time. "Each development is a long-term process."

Palts agreed, noting spa developments are capital-, labor- and energy-intensive investments dependent not on short-term economic growth but long-term planning.

He said investors must account for "both local day guests and tourists who might use a service as part of a bigger trip," adding that calculations also include everything from dining to other additional offerings in the area.

The broader trend reflects stronger domestic tourism compared with pre-pandemic levels and more cautious consumer behavior, the chamber chief said, prompting more travelers to choose shorter stays closer to home.

"At the same time, a well-located and attractive spa center can serve both as a standalone vacation destination and as part of shorter weekend getaways or daytrips," Palts added.

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