Riga postpones tourism tax

The new fee will be introduced one year later than planned, as a nod to local hospitality industry

On 16 September, the Riga municipal website informed that the local government had taken the decision to delay the introduction of a tourism tax by one year – meaning it will be levied from 1 January 2023. The tax, amounting to 1 euro per tourist per night, came into being as an idea back in 2019, however, the subsequent COVID pandemic made it irrelevant since there was a significant slump in tourist visits to the city.

The tax will be collected from accommodation facilities

All tourist accommodation facilities will have to pay a tax in the amount of 1 euro per person per night, but not more than 10 euros if the visitor is staying longer in the Latvian capital. This means that the city is expecting to be able to collect some 3 million euros annually, given the popularity of Riga as a destination.

The decision to postpone the introduction of the fee, however, was motivated by the continuing need to support the local hospitality sector in times of crisis.

A letter from the Latvian Hotel and Restaurant Association to the Riga City Council indicated that the tourism industry has been experiencing the worst crisis in history since March 2020 due to the spread of Covid-19. According to the Central Statistical Bureau, both occupancy and the number of foreign tourists served have decreased significantly.

For example, bed occupancy in Riga in the first half of 2021 was one of the lowest in history - 14.47%, reaching only about 60% of the 2020 indicator and 28% of the 2019 indicator. In the first half of 2021, 50,364 foreign tourists were received, which is about 21% of the number of foreign tourists welcomed in 2020 and about eight percent of the number of foreign tourists in 2019.

Levying a tourism tax is becoming an increasingly common practice in many European cities, including Venice, Kaunas and Vilnius, among others.