Fans, locals suffer extreme price-gouging

  • 2006-05-10
  • By TBT staff

GOLD MINE: The Old Town's beer gardens are making a fortune off hockey fans, who will pay almost anything to enjoy a few icy brews.

RIGA - Irrational exuberance on the part of Riga hotel and restaurant operators in the lead-up to the ice hockey championship has fed a steep surge in prices that has trapped many sports fans and scared off locals. When Latvia won the right to host the championship in 2001, Riga's hospitality sector was the first to pop open the champagne bottles.

Downtown hotels doubled, even tripled, their room rates for the 17-day tournament, while many restaurants 's including popular brand-names such as Lido and T.G.I. Friday's 's waited eagerly for their chance to cash in on what was supposed to be a once-in-a-lifetime windfall.

The result has been an unexpectedly high number of empty beds 's in both hostels and four-star hotels 's and a swarm of disgruntled consumers. "People are mad," says Mike Johnson, director of Patricia, a full-service tourism operator. "Sure everyone knows that when a special event comes the prices go up, but this has been something else." Ardent hockey fans have refused to pay the "hotel surcharge" and have instead either chartered private plans to fly back home or book rooms outside Riga, particularly in Jelgava.

Several upscale hotels, such as Bergs and Metropol, have posted online notices that they still have vacancies during the tournament. Considering that a year ago the industry was complaining that it wouldn't be able to accommodate all the guests, the news is striking.

The other end of the industry is also licking its wounds. A newly opened hostel in Old Town, hoping to nearly recoup its annual expenses during May alone, raised the price of one bed to an incredible 50 's 60 lats. At the beginning of the championship the hostel was nearly empty.

In an attempt to find out just how much prices have gone up, TBT staff set out for Riga's Old Town. After visiting a few familiar bars and restaurants, we noticed that the price for a pint of Latvian beer had jumped from an average 1.3 lats (1.8 euros) to 2 lats and coffee from 0.8 lat to 1 lat. Bar snacks were up some 20 percent.

When visiting her favorite Old Town bar, one TBT journalist was shocked to learn that aher regular penne pasta dish 's once a prime bargain 's had increased 0.4 lat. And her precious peach milkshake was no longer 1.8 lats but an even 2.
An expat living in Riga said she was actually insulted by the brazen gouging.

According to Johnson, Riga's regular tourists 's those visiting for reasons other than hockey 's are the ones who suffer.
"There are a ton of people who did not know about the hockey, and they're caught in the middle," he says. "These visitors are just here on vacation and don't care about the championship. And now they're stuck with availability problems and high prices, and they're angry." Yet some tourists have found a way around the high prices. Hundreds of Czech fans, all of whom are visiting Riga for the hockey tournament, reportedly chartered planes to fly in and out of Latvia in one day, so as not to pay the outrageous hotel prices.

"I've heard rumors about this, and if we look at the chartered flights, they appear to be true," says Czech Airlines press secretary Roberts Zabello. "One charter flight is arriving today [May 5] and is scheduled to leave after the game. If we look at upcoming dates when the Czech team is playing, the flight schedules are the same 's they arrive before the game and leave shortly after."Meanwhile, other visitors, many of whom are from more expensive Scandinavian cities, have little to begrudge.
"The Norwegians have plenty of money, and they're willing to pay outrageous prices, Johnson says. "The Finns pay too, Riga's prices are no surprise for these people."

For the locals, there may be a silver lining. As soon as the final horn is blown on the championship game, prices are expected to drop 's as the law of supply and demand dictates. Therefore the question is not if, but when."Latvians just can't afford these prices. Once the tourists leave, proprietors will have to lower their prices again. Otherwise, they won't have any business," says Orange Bar director Jolanta Krimina. Orange Bar, which is especially popular among young Latvians, is one of the few places in the Old Town that hasn't raised its prices. This is because nearly 90 percent of its clients are regulars, Krimina says.

"We have not increased our prices by one santim," she affirms. "I know that many bars are, and I'm sure they will make fantastic profits from this, but our guests have come to Orange for years, and it wouldn't be fair for us to raise our prices on them. Our clients come first."