Estonia is well-known for its countless spa-hotel offers, Science Park and the recently opened Lotes Park. Lithuania has dolphins and a wide variety of spa resorts. Latvia is far behind in this regard because the country lacks unique and internationally known products to offer tourists, said Director of Lidot.lv and Latvia Tours Ieva Keisa in an interview to BNN.
What are some of the most notable recent events in your sector?
There was the 39th European Basketball Championship in September. I believe it can be considered a notable sports event. It did help with tourist flow. Active processing of trips began in September. The same goes for the beginning of an active professional exhibitions season in Europe.
October is noteworthy with the 10th jubilee of Latvia’s largest airline ticket shop Lidot.lv. Following the end of the cruise ship season we have begun preparing for the next.
Can you say economic conditions are improving and there is a lot of potential for economic growth in the market?
In spite of reports in the press that 2015 marked a record-high number of liquidated companies, as well as continued effect of the geopolitical situation, companies have adapted rather well. With that, the situation in the country, especially in Riga and its region, is viewed as stable with a slight tendency for growth. At the same time, however, the situation in regions is complicated, because the closure of the Russian market greatly impacted the fish processing industry. The halt of production over at Liepājas metalurgs has also greatly impacted the economic situation in Liepaja region. Neither this year nor next year is any growth expected, at least not in the tourism industry. Companies actively look for cost optimization solutions, investment in technologies and improvement of productivity.
How would you describe the government’s economy policy aimed at improving the economic situation in the country?
It is hard to call the government’s realized policy a policy at all, because what it is now is nothing more than a collection of general and theoretical activities voters will have to pay for. The adoption of Solidarity Tax will only put pressure on businessmen that already pay taxes, which would only serve to reduce their competitiveness. The proportion of shadow economy will not be impacted at all.
How is the industry affected by Latvia’s policy? What changes to legislation would you like to see? What helps? What makes things more complicated?
It would be easier to compete with Lithuania and Estonia if VAT rates for hotel services were equal. The current rate in Latvia is 12% (9% in Lithuania and Estonia).
The chaos in state procurements only adds to our despair: criteria for procurements are often illogical and unjustified. I believe it would be worth adding regulations to the Procurements Law that will provide an advantage to companies that have profits, invest in development and honestly pay taxes. For example, one positive criterion to consider would be company capital. There are many companies in Latvia that have been working with losses for a long time and have been unable to invest in development. In Estonia, such companies are either forced to close down or invest in their capital to compensate losses. Another potential criterion would be having liquidity coefficient above 1.0. It is one of the main criteria banks look at when assessing a company’s viability.
How would you describe the industry’s position in the Baltics? What about competition with Estonia and Lithuania?
Latvia’s position is stronger because we have a national airline. At the same time, however, Estonia is known for its countless spa hotel offers, Science Park and the recently opened Lotes Park. Lithuania has dolphins and a wide range of spa resort offers. Latvia falls behind in this regard: we lack unique and internationally well-known products to offer tourists. I think the best way to sell Latvia as a tourist attraction is to develop a combined travel offer that would include visits to all three Baltic States or even some other nearby country. Latvia is a small country. This is why it would be far more interesting for Japanese tourists to look at more than just Latvia. With that said, Latvia Tours now offers combined Classic Baltic tours that provide such options.
What can you can your ‘trump card’? What is your ‘Achilles’ heel’?
The fact that Latvia has its own national airline is definitely a trump card that offers us advantages before our neighbours. The same goes for our active hotel segment, which offers an expansive range of offers to tourists.
In spite of pessimistic predictions that traditional tourism agencies will soon stop existing and everything will be bought on the internet, we are proud to call a stable and loyal range of clients our trump card.
Our ‘Achilles’ heel’ is the current situation with state procurements and the lack of state and municipal support for major tourism events that would otherwise help popularize Riga and Latvia as a worthwhile destination.
Can you say there is a lack of skilled workers in Latvia?
Travel consultant is a profession that requires a lot of knowledge and skills, so it’s not easy finding good workers. It is also hard finding reliable people for middle-management positions, because such work requires a lot of energy and people quickly burn out. We are also proud to say our personnel rotation is lower than 10%, which is a good index.
Graduates of tourism programmes lack skills and knowledge that can only be acquired when working as a travel consultant. In most cases young people under the age of 30 become travel consultants. These people usually have good experience working with computers, social media and high-technologies in general. Nevertheless, communication and sales skills, knowledge of foreign languages and geography are invaluable in this profession. Education programmes should include acquisition of practical knowledge while working with actual employers. A good cooperation model with tourism agencies would allow students and their future employers to find each other more easily.
What do you predict for the next five years? Will the situation in the industry improve, worsen or remain the same?
It is hard to make predictions for the next five years, because the tourism industry is affected by international policy and global natural disasters. I believe that in the event of a positive scenario, the economic situation will be stable and with a positive outlook for growth.