Crisis in the hospitality industry got even worse in June this year - support is needed

According to the information compiled by the Central Statistical Bureau, in June 2021, 122.3 thousand guests were served in Latvian hotels and other tourist accommodation establishments, of which only 20.9 thousand were foreigners. Thus, judging by the number of guests, the share of the Latvian population in all Latvian tourist accommodations was 83%. Similar results are obtained when looking at the number of nights spent in tourist accommodations. In June 2021, all guests spent a total of 213.7 thousand nights in Latvian tourist accommodations, of which foreigners paid for 40.4 thousand nights. Consequently, also in terms of the total amount of purchases, the share of local travelers in Latvian tourist accommodations was 81%.
19.08.2021. NNeatkarīgā
Number of guests served in Latvian hotels and other tourist accommodations (thousands) and the proportion of Latvian travelers (%) of all guests of hotels and tourist accommodations ©Neatkarīgā

Although the number of serviced foreigners in Latvian tourist accommodations in June this year was 50% higher than in May, it is still 60% lower than in June 2020. In turn, the total number of tourists served in June this year was 4% lower than in June last year. However, compared to June 2019, the number of guests served has dropped dramatically - 2.6 times.

In addition, in 2019, the share of local guests in all Latvian hotels and tourist accommodations was less than a third (30.5%), and more than two-thirds of all hotel and tourist accommodation guests were foreigners. Thus, within two years, the hospitality industry has changed from a sector serving foreigners and exporting tourism services to a sector that is based mainly on the purchase of services by local residents.

In 2021, Latvian tourist accommodations are supported only by local travelers. Given that the industry did even worse this summer than last summer, it is perfectly justified to demand that the industry needs support when ending the direct support measures of the Covid crisis, but in a different form. One form of indirect support could be the possibility of reducing value added tax (to 5%) for two years for the sectors most affected by the crisis, both in the hotel and tourist accommodation sector and in the catering and indoor sports services sector. The Minister of Economics Jānis Vitenbergs has already made such a proposal, but unfortunately, other coalition partners have not expressed support for it. Let us hope that the call of the Minister of Economy will be taken into account when discussing next year's state budget, and that the coalition will move from promises to support those most affected by the crisis to real actions.


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