Rental apartments a problem for hotels

Hotels in Latvia are starting to feel the effects of companies like Airbnb providing an easy way to rent out apartments to tourists, reported Latvian Radio Wednesday.

Airbnb offers in Latvia are numerous and prices start from seaside rooms for €12 per night to villas in Jūrmala for €500 and apartments in central Rīga for €26.

Latvia's Hotel Association says that especially in Rīga hotels can feel the effects of rental apartments, said Santa Graikste, executive director of the association.

She said that while Airbnb is the most serious market player, there are apartment rental ads on booking.com as well.

"There are a 100 hotels in Rīga, and in the off-season there are about 400 apartments, while in the season there are about 700," said Graikste.

The association is worried that this market segment is not controlled.

"Not in the way of food sales, clients' safety, fire safety, or tax payments. There's no way this segment is being controlled. Most of it is shadow economy that doesn't pay taxes," said Graikste.

Graikste said that the association is preparing a list of apartments that could be operating within the shadow economy, to be given to the State Revenue Service for review this year.

While the Economics Ministry said that the European Commission has announced plans on issuing sharing economy guidelines. 

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