Travel Reference
In-Depth Information
Most of the tourism budget growth in 2004
was assigned to international and domestic
tourism marketing, including participation in
international tourism fairs and the opening of
new tourism information offices abroad. In
order to promote the development of religious
tourism, an additional
€
1.6m was assigned to
the maintenance of churches in autumn 2004.
In 2003, the VAT rate for tourist accommoda-
tion was changed from 18% to 5%.
Domestic tourism information is provided by
tourism information centres (TICs: 55 in 2004)
and points (TIPs) financed and maintained by
local municipalities (Ministry of Economics of
the Republic of Latvia, 2004b). In 2004, a state-
financed TIC was opened in R
i
ga, providing visi-
tors to the capital with information about tourism
attractions and services across the country. Orga-
nization improvements required include a decen-
tralization of tourism services, effective local
tourism advertising and an extension of the tour-
ism season. The Latvian Tourism Development
Agency maintains tourism information offices in
Helsinki, London and Berlin (the last being
shared by all three Baltic States). In 2005, tour-
ism information offices were opened in Stock-
holm and Moscow.
In 2004, the government adopted tourism
development basic guidelines, whose main pur-
pose is to increase the value of tourism during
the period 2004-2008, at the end of which
GDP contribution is planned to increase by
5-7%, and tourism export earnings to average
10-15% per annum (Ministry of Economics of
the Republic of Latvia, 2004a). It is planned to
achieve these targets by positioning and pro-
moting Latvia in the international market as a
different, safe and recognizable international
tourism destination while also promoting the
development of domestic tourism (NTDP, 2001).
Latvia is a member of the European Travel
Commission, the Baltic Sea Tourism Commis-
sion and, from 2005, a full member country of
the World Tourism Organization. Participation
in these organizations opens wide cooperation
possibilities in a number of sectors.
According to CSB information, 112 tour-
ism companies operated in Latvia in 2004, ser-
vicing 370,000 travellers, 80% of whom were
Latvians who travelled abroad. The majority of
Latvian tourism enterprises are small family
companies.
There is a tendency of relatively small foreign
tourism companies to enter the market, which
currently appears too small to attract the larger
international groups.
One must emphasize also investment of EU
pre-structural and structural funds in tourism.
These have been especially important in the
renovation of accommodation and develop-
ment of new products, as well as enhancing the
involvement of local government and NGOs in
the provision of tourism information. Com-
pared to other new EU member countries, indi-
cators of tourism activity in Latvia were low
in 2002 (Table 14.2). For example, tourism
income in that year was
€
170m, the lowest
level among the new EU member countries and
28 times smaller than that of Poland. This
reflected the limited horizons (focus on nature
and rural tourism), restricted budgets (Fig. 14.2)
and dominance of domestic tourism prior to the
administrative changes of 2003.
In terms of accommodation capacity in
2002, Latvia had the second lowest provision
after Lithuania among the new EU member
countries. Compared to the Czech Republic,
Latvia had 13 times fewer rooms. This reflects
the relatively slow construction of new accom-
modation
and
refurbishment
of
Soviet-era
hotels and resorts.
Tourism development still requires greater
investment. Overseas promotion is still inade-
quate, and an integrated state tourism develop-
ment strategy is required, which should include
the development of infrastructure, quality
improvement, service diversification, and
improved availability of information provision.
These dimensions are receiving attention, as
tourism is now recognized as one of the priority
branches of the national economy (Luj
a
ns,
2004).
General improvement in the
economic situation
The recent economic development of Latvia is
reflected in annual GDP growth rates of 8%
(2001), 6.4% (2002), 7.5% (2003), 8.5% (2004),
and 7.4% (forecast for 2005). For all the quar-
ters of 2004 and the first two quarters of 2005
Latvia had the strongest growth rate in GDP
among all EU countries compared to the same
Most
are
concentrated
in
R
i
ga.
