Latvia
Tourism is an important sector in Latvia, directly contributing to 4.8% of Latvian GDP in 2019. Following the pandemic, total tourism expenditure in 2020 was down 73% from 2019 to EUR 145.4 million, and held steady in 2021 at EUR 145.5 million. In 2021, employment in tourism-related sectors represented 7.1% of the total workforce, down from 8.3% in 2019.
Inbound tourism recovery has been limited: the total number of international tourists in 2021 was 24.9% less than in 2020, totalling 478 000 tourists – 75.3% below 2019 levels. Latvia’s top source markets are the neighbouring countries of Lithuania, Estonia and Russia, which contributed to 60% of 2020 international arrivals, up 18% from 2019.
Domestic tourism is an important pillar of Latvian tourism. Domestic tourists totalled 2.5 million in 2019. In 2021, 2.4 million domestic tourists were recorded, with a total expenditure of EUR 163.3 million.
Latvia aims to bring tourism back to pre-pandemic levels by 2024. However, the impacts of Russia’s war in Ukraine and energy crisis in Europe risk further delays to the full return of tourism.
The Ministry of Economics is responsible for developing national tourism policy and organising and co-ordinating its implementation. The Ministry supervises the Investment and Development Agency of Latvia, which is responsible for implementing tourism policy and promoting Latvia at national and international levels.
The Ministry (along with the Investment and Development Agency) co-operates actively with the regions of Latvia via four regional tourism associations. It co-operates with local municipalities and tourism information centres as required. Regional and local authorities take part in creating the Latvian Tourism marketing strategy, marketing campaigns and printed and digital informative materials.
The Ministry of Economics works closely with the Latvian Hotel and Restaurant Association, the Association of Latvian Travel Agents and Operators, the Country Tourism Association and other trade bodies. In the case of nationally important issues, the Latvian Tourism Advisory Council is brought together with a variety of ministries and association members.
The Ministry of Economics co-operates with other ministries in development policy concerning tourism and reviews and comments on policy guidelines developed by the ministries of Culture, Environmental Protection and Regional Development, and Transport. When the competence and opinion of tourism sector professionals are required, Latvia creates working groups, including local authorities, associations, other governmental organisations and non-governmental organisations.
In 2021, the total budget for tourism marketing was EUR 2.7 million, including state funding of roughly EUR 700 000 and funding of EUR 2.0 million from the European Regional Development Fund. Tourism marketing activities are implemented by the Tourism Department of the Latvian Investment and Development Agency. The Agency is also responsible for implementing the “Promotion of international competitiveness” programme, co-financed by the European Regional Development Fund (ERDF), which supports tourism entrepreneurs in various marketing activities.
Source: OECD, adapted from the Ministry of Economics, 2022.
The Tourism Development Plan for 2021-29 was created before the COVID-19 pandemic. Due to the difficulties in long-term planning during the pandemic, the Ministry of Economics decided to shift to a short-term Tourism Recovery plan for a period of 1-2 years. A new plan is being developed to account of the geopolitical situation and the ongoing recovery of the tourism sector in 2022. This plan will include additional activities to stimulate the sector. Budget limitations are still being identified.
The Investment and Development Agency of Latvia has developed the Latvian Tourism Marketing Strategy, which determines priority tourism markets and activities for promoting inbound tourism and addressing future tourism challenges. The marketing strategy aims to improve the image of Latvia, develop sustainable tourism and foster investment. In addition, the Agency co-operated with regional tourism associations and local authorities to organise domestic promotional campaigns to partially compensate for the decrease in international tourists and to support local businesses (see box below).
Latvia had several support programmes in place for the tourism sector to deal with the effects of the COVID-19 crisis, including:
Salary compensation programme for tourism enterprises (EUR 19.4 million).
Tax payment extensions: the possibility to split tax payments or defer them for up to three years.
Loans for current assets: funding with reduced collateral requirements (EUR 210 million).
Self-isolation programme: indirect support to hotels (EUR 141 000).
The positive effect of the pandemic was new knowledge and skills gained, such as the ability to organise online and hybrid events, making it possible to invite speakers and participants who would not previously have been able to attend.
Latvia has set longer-term priorities to increase the competitiveness and export capacity of the tourism sector. The main priorities are:
Building value through a focused cluster system: development of new, innovative and creative tourism products through a tourism cluster system with high added value and return on investment. The programme will support eight tourism clusters: four thematic clusters (MICE, health tourism, cultural tourism and nature tourism) and four regional clusters. The programme is co-financed with ERDF funding of EUR 6.5 million.
Digitalisation of the tourism sector: enterprises will have the opportunity to participate in the EU Recovery and Resilience Facility and the programmes co-financed by the EU’s multiannual budget, which support the digitisation of processes, training of digital skills and the development of new digital products.
In response to the dramatic decline in inbound tourism and growing demand for domestic tourism, the Investment and Development Agency of Latvia, in co-operation with regional tourism associations and local authorities, organised several domestic promotional campaigns aiming to partially compensate for the decrease in international tourists and to support local businesses. In 2021, the number of nights spent by domestic tourists was 1.5 million, an increase of 9.5 % compared to the previous year. The campaign included:
“Open Days in the Countryside”, which attracted 26 000 visitors to 240 rural guest houses, restaurants and other rural tourism businesses.
“Home Café Days”, which involved 448 pop-up cafes, attracted more than 40 000 visitors and was repeated in 2022 due to its success.
“Zoom Latvia Closer”, a campaign game organised from July to October 2021, which included 33 destinations all over the country. The campaign was repeated in 2022 with new routes and destinations.
“Let’s visit Latvian castles and manors!”, a travel campaign organised from May to September 2022 for domestic cultural tourists to experience the cultural heritage of various castles, manors, and parks.