Latvian hotels are in crisis, especially in Riga. So far, only three countries remain – Lithuania, Finland and Cyprus, from which self-isolation is not required when entering Latvia, the workload for hotels has decreased by as much as 90%.
Some hotels are already worth closing, similar to the Covid-19 crisis in early spring. The tourism sector may soon increase Latvia’s unemployment rate again.
One of the leading accommodation chains “Mogotel” with 13 hotels in Riga – “Wellton”, “Rixwell”, “Rija” – has closed four hotels this month. It is planned to stop working in four more hotels next spring by spring.
“Those who work still work at a loss. We look at whether those losses are less than closing the hotel shut. It is clear that we will have nothing until April. There will be a winter heating season. There have been huge disadvantages for their first period, as hotels were closed from March to July, ”says Jelena Stirna, Chairman of the Board of Mogotel Hotel Group.
The manager of the almost 500-room hotels “Pullman”, “Mercure” and “Ibis” says – a fundamental crisis will occur if this Friday Lithuania is also included in the list from which to enter Latvia, self-isolation must be observed. Then, as practically the only foreign immigrants in Latvia, the Finns remain, but they alone are not enough.
Valdis Vanadziņš, General Director of Pullman Riga Old Town, points out: “If it continues that more and more countries are closing, we see no other way to suspend operations. This means an additional burden on the state budget, as there will be unemployed people. This is such a very tragic moment. Well, I don’t see any way to keep the hotel open, to keep my staff. It’s awful. “
Although since August the tourism industry can receive a one-time government grant or gift to compensate for wages in the amount of 30% of the mandatory state social insurance contributions made last year, it can only be used for two months. Hotels all over Latvia are also starting to push credit payments and penalties. At least there was protection during the emergency.
“It simply came to our notice then. Here we closed the hotel, all contracts have contractual penalties at once. Hotels need support for current payments, utilities, ”says Jelena Stirna, Chairman of the Board of the Mogotel Hotel Group.
There is no immediate solution in the Ministry of Economics responsible for tourism.
“It simply came to our notice then. New tools are being evaluated. We assess what the work we can do in the future could be and what the proposals could be for the government, ”explains Kristaps Soms, Director of the Business Competitiveness Department of the Ministry of Economics.
Valdis Vanadziņš, General Director of Pullman Riga Old Town, points out: “There could be either downtime benefits or tax relief. Total remission of land tax and subsequent non – application. That’s huge money. Our property has approximately 300,000 euros per year for land tax alone. This is a huge burden for a company that is in such a situation. How to deal with it all? ”
But the chairman of the board of the Mogotel Hotel Group says: “The affected industry clearly needs support from employees, which could be the solution as in the spring – downtime benefits. In the spring, we managed to retain employees. ”
The Minister of Finance Jānis Reirs (“New Unity”) says immediately – the tourism sector will no longer be granted a special status and the downtime allowance will not be renewed.
“How long can society wait until an industry is down and borrow, borrow, and put that debt on society as a whole,” says Reirs.
Therefore, the Riga Tourism Development Bureau, as the only reasonable solution to prevent the collapse of the industry, proposes to the government to raise the cumulative morbidity threshold of Covid-19, the so-called yellow list. This would continue to ensure the flow of tourists to Latvia.
“Latvia is currently in a position. Estonia, Finland and Lithuania have raised to 25, which means that all Germans, Swedes and other solvent tourists will travel to these countries. No one will go to Latvia, because it is clear that no one will want to sit in self-isolation, ”explains Jānis Jenzis, the head of the Riga Tourism Development Bureau.
Radisson chain hotels, where the occupancy is only 5%, offer another solution – tourist groups could be subject to the same requirements as sports teams, which are still allowed to enter Latvia from different countries.
“It could be adapted in some way for tourist groups, business group travelers who would like to organize a conference or seminar. To position Riga and Latvia as a unique destination, where, following the security protocol, we can look for some solutions, ”says Jānis Priede, Sales Manager of Radisson Blu Latvija Confernce & SPA Hotel.
However, how to help hotels overcome the Covid-19 crisis, with the management of the Hotel and Restaurant Association going to the policy makers in the coming days with proposals.