Latvia’s restaurant industry is bracing for a rocky start to 2026, with industry leaders warning that financial pressures could force more closures in the coming months. The challenges come as the sector grapples with a years-long slump, rising operational costs, and a sharp decline in tourism—factors that have already pushed some long-standing businesses to shut their doors.
Jānis Jenzis, president of the Latvian Restaurant Association, painted a sobering picture of the industry’s struggles in recent comments. Speaking to local media, Jenzis noted that January and February are traditionally slow months for restaurants and hospitality businesses, but this year’s downturn feels different. “Energy costs remain high, and customer traffic—especially from tourists—is still low,” he said. “It’s a tough combination.”
The warning arrives as Latvia’s tourism sector sets ambitious goals, aiming to match pre-pandemic visitor numbers by the end of the year. But Jenzis expressed skepticism about the feasibility of those targets, particularly given recent cuts to tourism marketing budgets. “We applaud the government’s optimism, but without clear long-term planning and investment in promotion, it’s hard to see how we’ll hit those numbers,” he said. “Restaurants and hotels need stability to survive, and right now, that’s in short supply.”
The industry’s struggles aren’t new. Jenzis pointed out that Latvia’s restaurant sector has been in crisis for four years, first battered by the COVID-19 pandemic and later by the economic fallout from Russia’s invasion of Ukraine. The war, in particular, has had a chilling effect on international tourism, with fewer visitors from key markets and fewer large-scale events—like conferences and festivals—being held in the region. “Restaurants and tourism are deeply connected,” Jenzis said. “When one suffers, the other feels it immediately.”
The impact is visible in Riga’s historic Old Town, where empty storefronts and shuttered eateries have become a common sight. Jenzis didn’t mince words when asked if more closures were likely in 2026. “I perceive so,” he said. “Even with some price drops, costs are still high. Winter is always slow, but heating bills don’t go down. Unfortunately, I expect more restaurants won’t make it.”
Adding to the industry’s woes is a fierce competition for tourists among Baltic capitals. Riga lacks iconic landmarks like Paris’s Eiffel Tower or Rome’s Colosseum, making marketing even more critical. Jenzis highlighted the potential benefits of Riga’s recent inclusion in the Michelin Guide, which could boost its profile—but only if the city can effectively promote itself. “Our tourism offerings are similar to those in Tallinn and Vilnius,” he said. “It all comes down to who does the best job selling themselves.”
In an effort to ease the financial burden on restaurants, lawmakers are considering a proposal to lower the value-added tax (VAT) rate for food service businesses from 21% to 12%. The measure, which has already been introduced in Parliament, would bring Latvia in line with many other European Union countries, where reduced VAT rates for dining are common. Andris Kalniņš, president of the Latvian Hotel and Restaurant Association, has been a vocal advocate for the change, arguing that it would make dining more affordable for consumers during a period of rising prices.
“Ninety-eight percent of EU residents already benefit from reduced VAT rates for dining,” Kalniņš said in earlier remarks. “This isn’t just about helping businesses—it’s about keeping prices reasonable for customers.”
For now, Latvia’s restaurant owners are left waiting, hoping for relief from either policy changes or a rebound in tourism. But with winter’s slow season underway and economic pressures mounting, the road ahead looks uncertain. As Jenzis put it: “We’re in survival mode. The question is how many of us will make it through.”
The situation underscores a broader trend in Europe’s hospitality sector, where post-pandemic recovery has been uneven and economic headwinds continue to test resilience. For Latvia’s restaurants, the coming months could be make-or-break.
