People are looking for destinations that are different, not overcrowded with tourists, and there the Baltic states are like a breath of fresh air, said Asnate Ziemele, president of the Latvian rural tourism association Baltic Country Holidays (Lauku Celotajs), in an interview with LETA, adding that although the impact of the war in Ukraine has not been fully overcome, travelers are returning from Germany, the Netherlands and tourism markets further away from Latvia. This year has also been good for domestic travelers after a drop following the pandemic. Rural tourism operators say that costs have risen a lot, especially labor costs, but prices cannot be raised because people do not want to spend more.

How has the past summer season been for rural tourism?

In spring we were scared that it would be bad, because there was a big lull, and the situation did not seem hopeful at all. Rural tourism operators thought that the shock of the war might have been worn off, but April and May were pretty gloomy months. But then it all went away - summer started and bookings in rural tourism also increased very rapidly. Even now, in autumn, rural tourism companies are saying that it has been a better year than the previous one, with lots of private events, weddings and parties. There are also a few foreigners, but only for events, as there are no tourists going to the Baltic states in November. The summer has been better overall than last year.

What is the explanation for this - good weather?

Yes, first of all, good weather. That is definitely the main thing - when the weather is bad, people go to Spain. This summer, there was no reason to go anywhere else at all, because it was a wonderful summer in Latvia.

There were also a lot more foreign tourists than we expected, which could mean that people are used to war, if you can say that. Tourists have returned from distant markets from which we did not expect to see people so quickly, such as Japan, America, Australia. Also at exhibitions, when talking to foreign tour operators, you can hear that potential tourists are coming, asking for and already planning specific itineraries in the Baltic states. People are looking for destinations that are different, that are not overcrowded with tourists, they are looking for something natural, not Paris, London or Venice. People have been a lot to traditional tourist destinations and are now looking for something new, and the Baltic states are a breath of fresh air.

Does this mean that the war in Ukraine is no longer such a big reason for foreign tourists not to come here? Earlier, hotel industry representatives said that sometimes it feels that foreign tourists feel that Latvia, the Baltic states, are so close to the war zone, that there is shooting just 50 kilometers away.

This has not completely disappeared and, of course, we are still suffering from it in the tourism industry. Moreover, I have recently realized, talking to Scandinavian colleagues, that the closer the markets are, the more they are afraid. It seems as if the Scandinavians understand very well where Ukraine is and where we are, but they are really afraid and they are afraid not only because we are next to Russia, but also because we are a bicommunal country. They think that we have a lot of disloyal people, so something could happen. They think that the situation here is not so peaceful and that ethnic conflicts could break out at any moment. Scandinavia is a different situation and experience, so possible international conflicts are taken very seriously. That surprised me, because I do not think they are any more afraid of that than they are of bombs that might accidentally fall.

Which are the foreign markets that rural tourism can count on more at the moment?

The Germans, the Dutch, which are the most important markets for us, are coming back. It was long and difficult with the Germans, because they are very sensitive about the war in general and are very cautious about it. But the Germans are now coming to the Baltics. I think it will be harder for us to get the Scandinavians back. The exception is the Finns, who are coming, and the distant markets. The Japanese are coming in large numbers.

During the pandemic, there was a strong tendency to travel around Latvia. Has this trend waned?

Of course it has very much diminished, especially immediately after the pandemic, when everyone went to warmer countries, when it was allowed again. The decline in the local population in rural tourism in 2022 was very large. It has now gradually increased again, and this has already been a good year in terms of domestic tourists. Of course, we are competing with Lithuania and Estonia. Rural tourism operators say that the difficulty is that costs have risen a lot, especially labor costs, but it is impossible to raise prices because people do not want to spend more. There has also obviously been a big reduction in the number of caterers in the countryside. Entrepreneurs say that whereas in the past guests could dine in a restaurant or a cafe, now guests in rural accommodation order full catering because there is apparently little or no choice. Rural tourism operators have raised prices for catering because it was impossible not to do so but they are afraid to raise prices for accommodation because they are afraid of losing the local market.

Are there concerns that some companies may not be able to survive the increase in costs?

I do not think it is that bad. It is more likely that guesthouses close for the off-season if they see that there is not enough movement of travelers.

How often does it happen that a guest house locks for the off-season and then is not able to reopen?

For caterers, it was typical after the pandemic that many never reopened. It was very harsh for business, and it is impossible to sustain it with any kind of aid and benefits. At that time, very many did not go back in business.

The most difficult thing in rural tourism is to provide service staff, and very many businesses rely solely on their families. The biggest challenge is to keep workers in rural areas, such as good cooks.

What is the demand for specific events such as company sports games, weddings?

This is also a demand from the local market - locals do not go on excursions, they go to events. In the off-season they only go to events, but in the summer they also travel around Latvia. Events like family reunions have also returned and are especially popular around Christmas time. Also, a lot of foreign Latvians come, invite their relatives from all over and celebrate the holidays in the guest house. Foreign Latvians also get married here.

Are there differences between the regions of Latvia, where the demand for rural tourism is better and where it is worse?

This is a difficult question because we do not have complete statistics and summaries of all bookings. I assume that the closer to Riga, the easier it is for guesthouses. Even in Kuldiga it is empty and quiet in the middle of the week.

Of course, in the seaside is very good in high season, but it is harder in low season.

I suspect that it is not easy in Latgale. Unless there are special events, it is far, expensive and also difficult to go to Latgale, and the accommodation and cafes are not as good as I would like. In summer there are a lot of people, but in low season it is not so good. It is increasingly difficult to keep people outside the city in the service sector. In Latgale it is particularly difficult. Also, of course, for people, security is an important aspect of the decision whether or not to go close to the border to spend the night, because sometimes it seems that illegal immigrants will come out of the woods.

The fight for a reduced rate of value added tax (VAT) on catering services has been fought for years. How important is this for rural tourism?

It would be very important for rural tourism. We also have businesses that are not subject to VAT, but there are fewer and fewer of them. The hard truth is that this is not why the price of a plate of soup will go down in the countryside, but it will allow the entrepreneur to pay more to the cook. It has been made clear by rural entrepreneurs that they lack the turnover, they lack the money to sustain a catering business. I do not believe that the state budget would suffer very much if VAT on catering were reduced, but it would help very much to keep the catering business in the countryside.

What are the typical problems that a rural tourism entrepreneur faces today? You mentioned the workforce...

Labor is a huge problem, and we are competing with the whole of Europe for labor. A lot of people have left, there is a very high turnover of staff, very often people are going from one company to another even with very small changes in salaries. The owners are trying to retain loyal employees by very different means. Very often, it is the profit from the accommodation that keeps the hosts catering, because if they do not even give breakfast to the guests, it is more and more difficult to get guests.

You have previously raised the issue of competition between municipalities and private business in the field of tourism, which hampers the development of rural tourism - municipalities building hotels, organizing events, etc. Has the situation changed for the better?

The situation has not improved at all. Let us look at Rezekne municipality and its SPA hotel. I have said all along that it is not the poor [sacked Rezekne mayor Aleksandrs] Bartasevics who is the only culprit who took out a loan to build the hotel. Someone in Riga gave it to him, someone in the Finance Ministry signed a loan for the construction of a spa for the municipality! There was no contract with the private investor, nor did anyone need the spa hotel. Why are journalists not bringing this up and why is this man the one to blame?

The municipal damage to private business has not stopped. What has improved the situation somewhat is that the state and the municipalities have no money and are now trying to cut budgets. It is absurd that I should now say that, hopefully, because the municipalities and the state have no money, there will be less competition with private business.

What is the area where local governments are most involved in private business? In guest accommodation?

Guest accommodation is not provided directly by local governments, but if we look deeper into the issue, there is a lot of it - all the dormitories of the technical colleges are used as hotels. They are not only used for their direct function, but they are also widely used as hotels.

The other area is events organized by local authorities. This is also a private field. Those events which are organized 'free of charge' by the municipalities take funding away from schools, kindergartens and nursing homes. It is the same purse from which the municipality pays for it. The private ones have long since stopped competing with small-scale concerts because it is impossible. If a municipal concert can be organized for free or with tickets costing a few euros, a private event with a ticket of EUR 20 cannot compete.

Where should local authorities start?

First, they need to sort out the big infrastructure, so that they can get there. They have to do everything to make people want to live locally, because they are already the service providers, the employees. You have to talk to the business community. The role of municipalities is, first of all, to look after the people who live and work there, especially the entrepreneurs, not to develop the tourism business themselves.

There is also a lack of understanding of partnership between the state and the municipalities. The idea of a SPA in Rezekne would not be so wrong if only there was a private investor who would participate in the project from the very beginning. The municipality, for example, participates in the construction of the swimming pool because it is probably needed by local children for swimming lessons, but the SPA, the hotel, is built by the private partner. Partnership is needed, and then the private partner will not allow the money to be wasted so frivolously, as happens when only the state or the municipality is involved.

What is the cooperation between the Baltic states?

The Baltics are one brand. In that sense, we are very lucky that all the Baltic countries are together and we are one destination. Sometimes Estonians go to the Scandinavians on their own, but Latvia and Lithuania are always together in their offer. The Baltics as a tourist destination is very important, although 'slow tourism' has recently come into fashion, where the tourist no longer wants to visit all three capitals in four days, but wants to enjoy the trip more without having to run around so much.

But if, travelling slowly, a tourist stays in only one country, then do we have to compete with Lithuania and Estonia?

Of course we are competing. We are one destination, but each country is competing with the other. For example, we are together with Estonia in one nature tourism project, but nature tourism is most often enjoyed in one country - you cannot take a dogsled ride in Latvia and still walk through a bog in Estonia in your bog shoes. It is more important for the tourist how they experience it than in which country. Of course, we are competing.

How would you compare our position in rural tourism with Estonia and Lithuania?

We have the best connections to Europe - airBaltic has a big advantage here. I have spoken to the English and they say that you cannot get to Tallinn. The direct flights have a huge advantage because you go there, but as soon as you have to change planes... Vilnius is not in a better situation than Tallinn in this respect either. Riga is definitely more accessible than other Baltic cities.

It would be good to have Rail Baltica. We should have started with rails, not stations, to connect us.

Public transport is becoming increasingly important in tourism. The train is number 1 in Europe. Bus services are also important. There are tour operators who are creating tours around the Baltic by public transport. It is green, people demand it, people do not want to drive their own cars, public transport is easier, but we do not have public transport oriented towards tourism, at best towards the local population. Many places in Latvia are inaccessible by public transport because buses only run once or a couple of times a week.

What projects is the association Baltic Country Traveler currently participating in to promote rural tourism both in Latvia and abroad?

Those are definitely Coastal Hiking Trail and Forest Trail. Recently, Lonely Planet wrote a wonderful article about Forest Trail, and I had the feeling that they had walked a part of it themselves. It is also very important that these two trails are shared by the Baltic states, and this gives us the backbone to promote ourselves as a hiking destination. So the Baltics are really top of the agenda at the moment for travelers who are into nature tourism and hiking in general. The other thing is that we are still lacking in the way that our small service providers are "bundled" into one tourism product to offer, so that a tourist can read about kayaking in Riga, hiking on the marsh trails in Kemeri or birdwatching in Kolka in one place and in one style.

When it comes to culinary tourism, the ability to incorporate our fruits, berries and the bounty of the forest and meadows into food products is crucial. These products must be highlighted. They do not contain preservatives, chemicals and other things that ensure a long shelf life but make all products look alike. We are not proud enough of natural products, in my opinion. We may not be able to make cheese so much and so well to compete with France, but we are very good at using fruit, berries and other herbs, and we have to appreciate that ourselves.

There is also now a military heritage tourism project in the Baltics. In addition, we are now trying to develop the military heritage offer not only as a tourism product, but also to figure out how to present these stories and experiences to young people in schools. Now all the Baltic states have started a joint project to make the story of how the Baltic states gained independence 100 years ago and what they have gone through since then a common story and adventure that is interesting and understandable not only for people who have experienced and remember a lot themselves, but also for people in their early teens.

Of course, there are many different projects. For example, the Home Cafe Days have already grown into an independent and popular event throughout Latvia.

What are the forecasts for rural tourism in the coming year?

At the moment, the biggest wish on everyone's mind is probably that there will be no new turmoil and that the war in both Ukraine and Gaza will end. However, if we assume that all will be well, then we have very good prospects to develop our offer. Seeing also the interest in the Baltic countries as a destination that is different - healthy, natural, numerous, good quality, interesting - I think the future is good. Also, if we look at the quality/price ratio in Europe, we are very competitive. Also, the fact that Latvia is not overpopulated is a big plus for us. Of course, in tourism, this creates problems with attracting labor, but on the other hand, I find it hard to imagine many countries in Europe where you can rent a guest house with your family or friends and there is a lake just for you or a neighborhood where no one else walks around. It is quite an exclusive thing, and we have every reason to be proud of it.