Riga struggles to accommodate tourism boom

  • 2004-10-13
  • By Elizabeth Celms
RIGA - There are simply no places to stay in Riga. All hotels - from five-stars to two-stars, are packed. Even the suburban Riga campsites were overcrowded with tents and parked cars until the first frost of September. And, as industry officials note, the tourists just keep coming.

Some blame discount airliners such as EasyJet and Ryanair, while others blame EU accession. But no matter who the fingers are pointed at, Riga has a problem: There are too many tourists and not enough beds.

"I had to turn my advertising off this summer because there were no hotel rooms," says Mike Johnson, general manager of Patricia LTD, a tourist office in Riga. "It came as a big surprise and was very irritating. We got caught by it - everyone got caught. It's the first time this has happened in years."

Reval Hotel Latvija's marketing coordinator, Ilona Kalnina, says receptionists were turning away an average of 20 people a day between May and September of this year. "It was a big problem for us," Kalnina says, "Now there are many unsatisfied guests."

Johnson explains that his company had to pull rabbits out of hats this summer in order to appease irritated customers - some long-time clients - who couldn't find a room. As did other hospitality professionals in Riga, Johnson had to get creative. Instead of discouraging visitors completely from the booked city, he suggested camping sites in Kipsala, staying at ancient Latvian castles and even venturing into the rustic Baltic countryside. "Of course you run some risk of turning people off," he admits.

And the problem will only get worse. Budget airliners Ryanair and EasyJet, offering cheap flights to Stockholm, London, Tampere and Berlin, will soon begin transporting planes full of tourists - many first-time visitors - to Riga. Statistically, passenger turnover at Riga International Airport is already up 30 percent this year and Transport Minister Ainars Slesers is aiming for 2 million passengers in 2005.

"This is definitely the biggest fall we've seen in five years," Johnson explains. "The good thing about these discount airlines is that they facilitate competition, which is long overdue. We'll see a good, solid inflow of tourists with spendable income."

Indeed, the boom is a gift to the Latvian economy, and city officials have every right to celebrate over the long needed boost. But the decision to woo the masses will inevitably backfire if Latvia can't provide them with a decent place to lay their heads.

Pushed by the sudden urgency to accommodate the inflow of people, the Riga City Council has approved the development of 16 new hotels in the capital before 2006. Half of these are planned to open next year, increasing Riga's lodging capacity by 1,000, according to Kalnina.

But until then, hotel managers are doing their best to get by. "Right now we're handling it, but we're afraid of next year if the hotels aren't finished," explains Kalnina.

The dearth of rooms could become particularly harmful in 2006, when Latvia hosts the World Ice Hockey Championship, an event that will attract throngs from Scandinavia and North America.

Johnson also harbors doubts about the city's promise to provide enough rooms for new guests. "I seriously doubt there will be hotels of sufficient size to solve this problem within the next two years," he says. "There's a plan to build a five-star hotel, but that's not what we need. We need three- to four-star hotels that can hold a large amount of people."

The Latvian Tourism and Development Agency, on the other hand, is more optimistic about the situation. Agency director Uldis Vitolins sees it as little more than booming business.

"I don't think it will be a big problem," he says. "We've had many meetings about this with the Riga City Council and other municipalities, and we're currently working with an investment guide."

In fact, hotel construction is already underway. The Reval Hotel Latvija, one of the city's largest inns, is currently building an annex on its north side. The new wing will increase capacity by 200 rooms and boast a conference hall that accommodates 1,000.

"After EU accession, more and more international companies are organizing conferences [in Riga]," Kalnina says. "As of now, our conference rooms are always occupied."

Legendhotels Latvia, a firm established by an Estonian enterprise, is planning to open two hotels in downtown Riga within the next couple of years.

In the meantime, creativity is the buzzword in the hospitality industry. "There's a lot of opportunity for creative people right now to accommodate these two- and three-day visitors," Johnson says. "Despite the bargain flights, most of these people are willing to spend money. They have the income and whoever provides the bargains will get the business."