This year the tourism sector could be similar to 2023 or slightly better in Latvia, as inflation in Europe has slowed down and the incomes of potential travelers is improving, Andris Kalnins, head of the Latvian Hotel and Restaurant Association (LVRA), told LETA.
At the same time, he stressed that in order for the incoming tourism industry in Latvia to work successfully, it is necessary to recognize at the national level that the tourism industry makes a significant contribution to Latvia’s exports, and therefore it would be important to focus on improving the tourism industry so that it is competitive at least with the rest of the Baltic States.
“It should be understood that investments in an export-oriented sector, both in the form of allocated financial resources and a competitive tax policy, will return significantly higher revenues to the state budget in the medium and long term,” Kalnins explained, adding that in 2022, for example, direct and indirect spending by foreign travelers in Latvia exceeded one billion euros.
The LVRA head also pointed out that it is important to invest in marketing activities in the tourism sector at least at the same level as Lithuania and Estonia, but currently Latvia invests at least two to three times less than its neighbors.
“The result is quite logical, as it is clear that Latvia is significantly behind Lithuania and Estonia in terms of foreign tourist arrivals, and even ranks last in the entire European Union (EU) after the recovery compared to 2019,” Kalnins noted.
He expressed the opinion that the situation when Latvian entrepreneurs have to hold meetings at national stands of neighboring countries at international tourism exhibitions, because Latvia has not established such stands due to the lack of state funds, is unacceptable.
At the same time, Kalnins stressed that it is important not to scare off potential travelers and investors by Latvia being in a “war zone”, as some like to believe. He stressed that Latvia is a member of NATO and the EU, which invests heavily in national security.
“Unfortunately, quite often in the public space our politicians maintain the narrative that a war can start in Latvia at any moment,” said the head of the LVRA, adding that it is absolutely right to prepare for all possible scenarios, but it is necessary to consider what information is expressed in the public space, because potential tourists to Latvia and investments in the country depend on it.
Kalnins also pointed out that, given that the catering industry is an important part of hospitality and tourism and is also an exporting industry, it is necessary to follow the example of other EU countries and introduce a reduced rate of value added tax (VAT) so that the industry can recover from the turmoil of previous years and invest in its growth, thereby increasing Latvian exports.
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