Tourism sector: Support from government needed in Latvia

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Several organizations in Latvia's tourism sector have sent an open letter to the European Commission (EC), drawing attention to the difficult situation in the sector, as well as the lack of government support, said representative Evija Ansonska on June 18.

“In Latvia's tourism sector, which accounts for almost 5% of the country's gross domestic product (GDP), there is currently no indication that the situation is likely to improve. On the contrary, it is deteriorating every day," said representatives of the organizations.

According to them, Latvian tourism and hospitality companies are currently in a worse situation than they were during the 1998 Russian financial crisis and the financial and economic crisis of 2009, as the introduction of an emergency and travel restrictions completely paralyzed their activity.

"In sectors that employ more than 30 thousand people in total, the drop in economic activity is currently between 50 and 100%. This means that a large percentage of entrepreneurs will be forced to decide on the cessation of business, increasing the number of unemployed people and deteriorating the overall economic situation," said industry representatives.

The representatives of tourism organisations have also noted in the letter that, despite its efforts and willingness to cooperate with the government in the development of aid measures, no sustainable solution has been received so far and there is no faith that this could take place in the near future. The sector is also disappointed by the decision not to apply the reduced value added tax (VAT) rate for the time being. According to organizations' estimates, the current reduced VAT rate for the hospitality sector is in force in 19 EU countries.

In order to save companies, industry organisations have asked the Latvian government to provide subsidies for wages, rent, supplier debts, as several other EU Member States have done.

"Unfortunately, companies in these sectors have still not received sustainable support that would ensure their preservation and a gradual exit from the crisis. We therefore appeal to the European Commission with a request to be involved in the situation, in line with the EC's call for Member States to provide support to the tourism and hospitality sector, "said the letter at the end.

The letter has been signed by representatives of the Latvian Hotel and Restaurant Association, the association “Lauku ceļotājs”, the Latvian Association of Tourism Agents and Operators, as well as the Latvian Association of Event Producers.

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