Current situation in the rural tourism sector

During the last week (until 22 April), Latvian rural tourism association “rural traveller” surveyed rural tourism entrepreneurs about the current situation and forecasts for summer. Contrary to the information provided by the Ministry of Finance at the meeting of the Ministry of Finance, the fact that "in rural tourism this summer is“ broken ”, the members of the association inform that the reservations are cancelled and the income drops by 80-100%. There is a risk that many companies can not survive the crisis.
The situation of the crisis affects the reactions of both society and tourism entrepreneurs, who are often afraid of both their health and safety and simply surviving by losing income. By surveying entrepreneurs, the overall activity of the industry is shown to be paralyzed. Several processes during the crisis are marked.
Reservation of rural tourism accommodation:

• Some farm reservations have stopped by 80-100%. Canceling reservations that have already been made, no new ones.
• All group event reservations - wedding, corporate events, seminars, camps, etc. are cancelled.
• For some farms, summer reservations from local and nearby foreign customers are currently in force, customers wait.
• Owners receive new requests for information from local, sometimes foreign tourists, to summer months, especially holiday houses, but they do not yet have reservations.

Business situation and patterns of action, depending on options:

• the operation stops completely due to a lack of demand;
• closed for certain periods of time for safety reasons;
• continues to work by reducing service volumes (for example, closing a hotel and restaurant, continuing to operate separate camping houses, holiday home companies);
• as a precautionary measure, only family/long-term customers shall be taken into account in the light of the prohibition of assembly;
• take customers with larger intervals (24 hours – 3 days) to get out and disinfect rooms, do not take several customers at the same time (groups, pairs, etc.) so that visitors feel safe and have no contact with other guests;
• the company is sold because the activity has stopped;
• owners are in standby mode and, while there are no customers, continue to commence improvement jobs to prepare a company for a new season and customer flow.

Problems to solve in order to maintain business activities
- credit obligations
Banks agree to postpone the repayment of the principal amount of the credit for a fixed period, but interest payments are not postponed. Owners are forced to take credit for the maintenance of the company (wages, heating, electricity, etc.). However, they are merely additional credit commitments, pushed back to a later time, further increasing the burden in the future. Farmers believe that rural tourism entrepreneurs should be given a grant for paying credit interest to the time of the crisis.
- lack of savings
Owners are counting on income decline in winter months and with planned income in the active season, making savings for winter. Currently, the savings have been spent, but there will be no planned new income. In addition, many entrepreneurs are forced to reimburse customer contributions for approved reservations that are currently being cancelled. There are companies who do not have the opportunity to continue their activities in such a situation.
- labour force
Employees are vacated or are dismissed because there is no accumulation of stockpiles after the winter season. If the season resumes, there will be no staff because the departed people have found new jobs and will be difficult to prepare for tourist accommodation.
Conclusions:

• The situation is partly facilitated by idle benefits, but not all qualified to receive them, for example if they choose to work part-time or part-time. Partial downtime allowances would be required here. Businessmen believe that local governments should allow real estate tax relief not only during the crisis, but also for some time after it to give the opportunity to recover.
• In general, the owners predict that there will be no foreign customers, but hopes to abolish restrictions as soon as possible and to return to local tourism in the summer season.
• Urgent support measures are needed to promote local tourism in order to maintain rural tourism business and Latvia as a high-quality tourist destination.

Proposals for support:
1. Tourism requires a special, separate national support programme which also includes the specificities of rural tourism business. Direct support to small and medium-sized tourism enterprises (accommodation, catering, tourism and tourism) and micro-enterprises providing a variety of tourism services, determining the amount of aid per company, depending on the scope of the company, size, volume of turnover lost. In the case of aid, the amount of the unpaid grant or compensation would be sufficient to 75% from the turnover of previous years.
2. A separate aid programme for the compensation of the losses of the measures not taken as a result of the crisis.
3. Non-conditional credit holidays, subject to the prohibition of any amendments to the credit agreement which would deteriorate the status of the borrower.
4. A comprehensive, high-quality internal tourism promotion campaign.
5. Review of idle benefit criteria, as many tourism companies do not qualify for idle benefit at this time.
6. As soon as possible, the relaxation of strict restrictions on events in the free environment where the operator can provide distance opportunities.
Objectives of the aid measures:
1. Maintain small businesses and ensure their existence up to the possibility of resuming activities after the crisis.
2. To ensure the competitiveness of Latvian small tourism entrepreneurs in comparison with the entrepreneurs of neighbouring countries.
Asnata Ziemele,
Presidency of the Latvian Rural Tourism Association “Rural traveller” (tel. 29285756)
“Rural traveller”: the association “rural traveller” is the oldest and most powerful rural tourism organisation in Latvia, founded in 1993. The aim of the association is the development of rural tourism in Latvia in the context of the common rural economy, in partnership with agriculture, local government, nature protection and other sectors. “Rural traveller” represents the interests of their members, engages in business-friendly policy-making, serves as a forum for professional information and a marketing platform. The members of the “rural traveller” are rural tourism, agriculture, artisanal entrepreneurs in all regions of Latvia.