Latvia Restaurants: Closure Crisis Looms | No Light at End of Tunnel

Riga is bracing for more restaurant closures as Latvia’s hospitality sector faces a confluence of economic headwinds, with another Michelin-recommended establishment, Barents, announcing its doors will close on January 31st. The situation is so dire, industry leaders say, that manny restaurants are failing without making headlines.

Latvian Restaurants Face Closure Wave Amid Economic Strain

A growing number of restaurants in Latvia are shutting down, prompting industry-wide concern and planned protests.

• The closure of Barents marks the second Michelin Guide-listed restaurant in Riga to close this January.
• Industry leaders cite high taxes, low tourism, and declining purchasing power as key factors.
• Restaurant associations are planning a protest in September to demand government support.
• Many restaurants are closing “quietly and without much notice,” according to Jānis Jenzis, head of the latvian Restaurant Association.

What’s driving the restaurant closures in Latvia? The Latvian restaurant industry is struggling with a high tax burden-including one of the highest value-added tax (VAT) rates in the European Union and the highest labor tax burden in the Baltic states-coupled with low tourist numbers and decreasing consumer spending.

Jānis Jenzis, head of the latvian Restaurant Association (LRA), described the current situation as “very difficult.” He noted Barents’ closure as a stark indicator of the broader hardship facing the catering industry at the start of the year. “High-quality products that are loved by guests and well visited cannot survive and cannot continue operating,” Jenzis said. “This means that something in the overall system is not working properly.”

The trend extends beyond fine dining, with numerous restaurants closing “quietly and without much notice,” Jenzis added. He expressed pessimism about a near-term turnaround, citing the off-season and a lack of political engagement with the sector’s challenges. “There is no light at the end of the tunnel,” he stated.

The seafood restaurant Tails, also listed in the michelin Guide, closed its doors on Antonijas Street in Riga on January 12th, foreshadowing the difficulties to come.

In response, the Latvian Restaurant Association, the Latvian Bar Association, and the Latvian Hotel and Restaurant Association (LVRA) have agreed to organize a protest in September. Jenzis emphasized the urgency of the situation,pointing to the multiple challenges facing the sector: low tourist numbers,declining purchasing power,a high tax burden,a high VAT rate,and a high labor tax burden.

The closure of Barents, located on Smilšu Street in Riga’s Old Town, will take effect on January 31st, according to reports from LETA.