Some hotels did not resume their work after the first outbreak of the disease, but some have recently announced temporary closure. The Chair of the Latvian Hotel and Restaurant Association Jānis Naglis said that these hotels represent a large chunk of the industry.
70% of the income of hotels in the capital is provided by foreign guests. Given the constraints that affect travel, this revenue stream has fallen sharply.
Naglis said that the future scenario with hotel closures is closely linked to whether the industry will be able to receive support from the state and local government. If there is no support, the wave of hotel closures could continue and six to eight thousand hospitality workers would join the ranks of the unemployed.
Naglis said that hotel downtime is difficult because the utilities have to be paid at this time, otherwise the building will go bust. Moreover, it is not easy to resume after downtime.
“It may be easier to close a hotel, but then it is difficult to open a hotel, even find employees,” said Naglis.
He said the negotiations were ongoing and “the response from the Ministry of Economy is high, at the level of the government I would not say so, many initiatives are disappearing, and some very simple ones, which in my view do not require too many resources to re-establish this moratorium on insolvency applications that existed before 1 September”.
“There is, of course, a further part of the unused grant money, there was a grant of up to €18 million, EUR 14 million have been distributed, 4 remaining to be reallocated, we are working on new criteria. Talks are ongoing with Rīga municipality on the reduction of real estate tax,” Naglis said.