Online platforms with and without online booking options, such as AirBnB.com, Booking.com, Expedia.com and Tripadvisor are all active in Latvia, offering privately-run accommodation in addition to the usual selection of hotels and guesthouses.
Based on an agreement concluded in 2020 between Eurostat and the four largest accommodation booking platforms, experimental statistical data on booked nights in the countries of the European Union (EU) are available.
According to these data, tourists spent 700,900 nights in Latvia in 2021 in short-term accommodation (guest apartments, apartments, holiday homes, rest houses, cottages, etc.) booked on online platforms (42.7% of all nights spent in Riga, 26.8% – Kurzeme, 17.8% – Pieriga, 6.7% – Vidzeme, 4.1% – Latgale, and 2% – Zemgale).
For the year 2022, the "Eurostat" database only has data for the first nine months, which shows that 866,800 nights were booked on online platforms in the period from January to September – an unsurprising rise given that this was the period when the country was emerging from Covid restrictions.
In constrast, the data obtained from the relevant type of accommodation by the Central Statistics Office of Latvia (CSB) show that tourists spent 509,800 nights in them in 2021 nights, and in 2022 – 709,000 nights. The discrepancy between the figures suggests that a significant number of stays might be undeclared as far as tax payments go.
Either way, it is currently impossible to accurately identify the market share of short-term rental housing, the Ministry of Economy admits.
In the short term, the owners of rental accommodation can register with the State Revenue Service (VID) as economic operators or as micro-enterprise tax payers, or submit a rental agreement, and register information about any cooperation agreements they have with online booking platforms – but there are no statistics on these transactions.
In order to reduce unregistered transactions, in the opinion of the Ministry of Economics, it is necessary to identify these establishments and create a register and a new data recording methodology.
In the view of the Ministry of Economy, the use of residential houses and apartments for the provision of tourism services should not be prohibited, however, "it should be clearly defined what additional restrictive conditions or requirements should be applied in relation to short-term rental accommodation as a sector of the provision of accommodation services".
The Ministry stated that already on January 1 of this year, amendments to the Law "On Taxes and Fees" entered into force, which oblige digital platforms to provide information on the revenues of platform sellers, and in the future it is planned to establish an automatic exchange of information from online platforms, which will allow SRS to better track traders operating on online platforms, including landlords offering short-term rental services.
The government, upon hearing the report, instructed the Ministry of Economics to create a working group by November 31, involving all interested parties, "to jointly define what restrictive conditions or requirements should be applied in relation to short-term rental accommodation as a separate sector of the provision of accommodation services".
This working group would develop the necessary amendments to the Tourism Law and other necessary legal changes. However, the generous deadline handed out to this working group suggests no changes will take place for some time yet. By December 31, 2024, it is planned to submit an informative report to the government on the creation of a new short-term rental accommodation register or other solutions to the situation.