Riga, July 18 (LETA) - The 2025 tourism season has started poorly for the hospitality industry in Latvia, Andris Kalnins (Greens/Farmers), President of the Latvian Association of Hotels and Restaurants (LVRA), told LETA.

He noted that the cool and rainy weather conditions have particularly affected the tourism season in seaside resort towns. "This has a significant impact on the revenues of both accommodation and catering businesses, which are critical in the summer season to survive the winter months," Kalnins added.

He said that overall, the number of foreign tourists is increasing, but Latvia still ranks last in the European Union (EU) in terms of foreign tourist arrivals compared to 2019. Kalnins pointed out that Riga used to be the tourism capital of the Baltics, but now it is lagging behind Tallinn in terms of the number of tourists.

According to him, this is a consequence of a lack of targeted action and ignoring the sector at state and municipal level.

Kalnins stressed that Lithuania and Estonia systematically invest two to three times more money than Latvia in promoting the country's image and tourism offer abroad and attracting international events. Meanwhile, Latvia, with one of the smallest marketing budgets, expects similar results, which is illogical.

He pointed out that last year inbound tourism to Latvia, generated by spending by foreign visitors, generated more than EUR 1.3 billion. However, if the country invested in tourism marketing at least at the same level as Lithuania and Estonia, he said, it would be possible to attract an additional EUR 200-400 million a year.

He stressed that if strategic decisions were not taken in the near future to strengthen Latvia's competitiveness in the tourism sector, Latvia would continue to fall behind and lose potential hospitality industry income, jobs and tax revenues.

Kalnins added that, given the difficult start to the season and the industry's low rate of recovery, especially the issue of targeted state support, including in the form of competitive tax policies, is particularly pressing. "The Latvian catering industry has been calling for a reduced rate of value added tax (VAT), as is the case in most EU countries, for a long time," he said.

According to him, a reduced VAT rate would serve as one of the most effective instruments to stabilize the sector, promote recovery and increase Latvia's competitiveness in the region.

Kalnins summarized that the Latvian tourism industry needs a strategic approach and support, including an increase in the marketing budget and a VAT reduction on catering would be the most powerful tools to reverse the early season trend, strengthen its position in EU tourism and increase next year's revenues and jobs in the sector.

As reported, according to the Central Statistical Office, the number of nights spent by guests in Latvian hotels and other tourist accommodations in the first five months of this year increased by 11.3 percent compared to the same period in 2024, amounting to 1.575 million.

However, compared to the same period in 2019, the number of guests staying in Latvian tourist accommodation establishments in the first five months of this year is 2.5 percent lower, including a 15.4 percent decrease in the number of foreign guests and a 25.2 percent increase in the number of local residents. At the same time, the number of nights spent by guests is 12.5 percent behind 2019 figures, including 22.6 percent by foreign guests.

The LVRA brings together accommodation and catering establishments for professional cooperation. LVRA is a member of the Association of Hotels, Restaurants and Cafes in Europe.