RIGA, Dec 27 (LETA) - The overall indicators in the hospitality sector have not yet reached pre-pandemic levels, Andris Kalnins (Greens/Farmers), President of the Latvian Hotels and Restaurants Association (LVRA), told LETA.

He said that 2025 has been a year of steady recovery and gradual growth in demand for the hospitality industry in Latvia. In particular, the number of guests and nights spent continues to recover and the foreign visitor segment is gradually strengthening its economic importance.

However, he said, overall figures have not yet reached pre-pandemic levels, especially in categories such as professional events and extended stays, which are crucial for the sector's growth and fiscal contribution.

Kalnins stressed that the hospitality sector in Latvia is an important component of services exports and provides a significant economic flow in the country. According to him, the consumption of foreign visitors directly increases the country's income and the sector should be seen as an export instrument and not just a segment of domestic consumption.

The LVRA President noted that the most significant challenges in 2025 were related to high costs, availability of labor, predictability of the administrative environment and the impact of the informal economy. He added that for legal businesses this meant more difficult investment decisions and limited opportunities to develop service modernization, employee training and quality improvement. The existence of a shadow economy, in turn, hinders fair competition and reduces public revenue.

He stressed that Latvia's lagging behind in regional competitiveness is not currently linked to tax rates, as they are comparable in the Baltic countries. However, the decisive factor is that Lithuania and Estonia are investing more in attracting foreign visitors, international marketing, developing professional events and conferences, and promoting exportable tourism products. Kalnins added that these investments are around three to four times higher compared to Latvia and lead to higher visitor flows, longer stays and higher overall economic returns for these countries.

Thus, tourism exports contribute EUR 1.8 billion per year in Lithuania, EUR 1.5 billion in Estonia and EUR 1.2 billion in Latvia. Kalnins stressed that Latvia's figure is significant and important in the country's export structure, but it is lagging behind its neighbors due to insufficient international marketing and visitor attraction strategies.

Kalnins pointed out that the sector's priorities for the coming year are clear, including a predictable business environment, the reduction of the shadow economy, the development of professional services, the availability of labor and a targeted public policy to attract foreign visitors.

He stressed that hospitality businesses are ready to invest in service quality, digitalization and energy efficiency, provided that there are predictable conditions and long-term administrative and fiscal stability.

The LVRA President stressed that recovery is possible if the country's strategy to attract foreign visitors is strengthened and the business environment is improved. The potential of the sector is substantial, he said, and with coordinated action, 2026 can become a period of full-fledged growth for the whole country.

As reported, according to the Central Statistical Bureau data, guest nights spent at Latvian tourist accommodation establishments increased 6.6 percent to 4.332 million in the first ten months of this year compared to the respective period last year.

In the ten months of 2025 the number of visitors in Latvian tourist accommodation establishments comprised 2.45 million, which is 4.9 percent more than in the first ten months of 2024. The number of nights spent by visitors has grown by 6.6 percent and comprised 4.33 million nights. Out of all visitors 1.46 million or 59.4 percent were non-residents, but 997,000 or 40.6 percent were residents.