RIGA, Feb 11 (LETA) - As many as 55 percent of companies operating in Latvia's hospitality sector have applied for some kind of state support during the Covid-19 pandemic, shows a survey conducted by the Vidzeme University of Applied Sciences in collaboration with the Latvian Association of Restaurant Owners and the Association of Hotels and Restaurants of Latvia.  

The survey reveals that the criteria set by the government, vague terms and red tape are the main obstacles preventing hospitality services providers from receiving the necessary assistance. 

"The survey of entrepreneurs shows that the decision-makers must urgently revise the current support criteria and adapt them to the industry's specifics, for instance, by including companies established in 2019 and 2020. It is necessary to significantly improve communication between the State Revenue Service and entrepreneurs, speed to the processing of applications and use an individual approach to assessing each particular company's situation," said Ilgvars Abols, director of the tourism and recreation study programs at Vidzeme University. 

The survey shows that downtime benefits and tax deferrals are the most popular support mechanisms, used by 62 percent and 55 percent of the surveyed companies, respectively. Meanwhile, 39 percent of respondents have applied for working capital grants and 61 percent either have not applied for the grants or have been denied this support. Most often, they cited vague terms, long waiting time, red tape, inadequate requirements or unprofessionalism of Revenue Service employees. 

"Decision-makers should realize that the downtime benefit is essentially support to the employees, not the employers. It eases the burden on the social budget, but does little to help the business. The government therefore uses the grant programs and "helicopter money", the size of which is tied not to tax payments but the industry's overall long-term contribution to the national economy," said Janis Jenzis, president of the Association of Restaurant Owners, adding that the Latvian hospitality industry, for instance, paid EUR 147 million in taxes alone in 2019. 

However, despite the Covid-19 restrictions, a drop in turnover and great uncertainty about the future, 72 percent of the surveyed respondents are ready to carry on with their business. Five percent said they would cease operations and 23 percent have not yet made up their minds. 

The survey, which included 170 companies operating in the hospitality industry, was conducted in January 2021.