Q1. Latvia has been heralded as one of the hardest hit economies in Europe as a result of the global financial crisis that began in 2008. In what ways has Latviaís tourism industry been visibly impacted by this financial crisis?
It was very difficult in 2009 because there was a drop in visitors of about 30%, which is a significant number. In practical terms we should perhaps look at it from a longer perspective because previously we had 5 years of constant growth of about 20-30% per year. So in that sense, we were hard hit but after a very steep growth. Of course it was difficult for the industry but there was also a positive side because it had become overpriced. The products were overpriced and the quality was relatively weak for the price that was being charged. If you have such a growth for several years then you also get too relaxed. And what I think has happened now is the correction of the service price. Everybody who actually understood the importance of quality stayed in the business and last year we had a 20% increase in visitors again. So we are very much back on track. I would say that this was the internal view while externally there was still the message that we had economic problems and this made people afraid to come to Latvia. In practical terms, there is no other reason to say that we are in any different of a situation than normal in terms of to travel abroad.
Q2. Corruption and crime are obviously tough issues every government struggles to combat. As a result of Latviaís historical legacy as part of the former Soviet Union, how can Latvia overcome its image as a former Soviet country and develop a modern image and brand based on democracy, openness, freedom and the rule-of-law that it can market abroad?
As you know, there are three ingredients in any nationís brand: tourism, business/investments and politics. For Latvia this is a huge challenge to overcome as a country that is just over 20 years old. What we have done is to develop the tourism brand. This is something through which we can do the true promotion of the country. The business and political brands are much more difficult than the tourism brand. Through the tourism brand you can create good word of mouth and recruit customers that will do communications for the country. In that sense I think that it might be a good opportunity for us to rebuild the brand. Business and political issues are more complex. You might be a country with a well-balanced economy and do very much harm to the world, or you can be a country which doesnít have a big strong brand or big productions but you create intellectual products that consume less energy resources and benefit the world. You cannot put all your eggs into one basket. When travelers come to Latvia they see a clean green country and they can say that perhaps the economy is not the only thing that attracts. For instance, Latvia was participating in the world expo with the Air Tunnel/flying and the key message we brought was that if you want to be happy then you need to fly. Make your life different and you donít need very many things to be happy. So I think itís an interesting concept and you can discuss the different perspectives. So while the economic crisis hit Latvia quite hard, it also created in us an awareness and gave us an opportunity to turn a negative into a positive. We need to be more effective and to think more sustainably and for the long-term. I usually say that a crisis happens not because it happens but a crisis happens when somebody predicts that now will be very good years. Itís something that we need to learn.
Q3. In the media Latvia is generally described as a keen or eager member of the European Union, typically embracing integration efforts aimed at strengthening the European project. Accordingly, as Latvia is currently pegged to join the Euro zone in 2014, how much of a priority is joining the Euro zone for Latvia and do you envision the adoption of the Euro as a great asset for tourism in Latvia?
I think from a tourism perspective, of course that would be an asset. But in practical terms, this objective has been set by the government and internally there is still quite a debate on this issue. There is a cost in order to get to the basket of Euro and it will require a very strong financial discipline that we need to have. There is concern regarding if society will actually support this price that needs to be paid. So internally there is still debate on the pros and cons. But the government has now set this objective and it is planned. From a tourism perspective I think this is good because I believe that if something is good for the customers, then it is also good for us.
Q4. A recent article by the Baltic News Network regarding foreign touristsí satisfaction rates in Latvia found recreation possibilities in Latvia are quite high Ė on average 4.3 points out of 5. In this regard, what efforts are currently underway by the Tourism Development Agency to further promote Latviaís image as a destination particularly in terms of the potential niche markets like green and eco-tourism?
First of all, I think the brand that we have developed is very strong and supportive of any green and sustainable products. As discussed earlier, a brand does not only involve external communication but also internal communication. So in that sense especially for tourists, the brand sets guidelines for development of the product. That is the key thing that we can do as a development agency. Another thing that we do is provide product development training. So what we can do as a state entity is to support a specific product development through trainings, educate people on green, sustainable and nature products and how to develop them, how to cooperate to develop them, etc. There are also products that we can put behind a brand. A brand itself is good but you need to follow up with something to buy. In pragmatic terms, we have very strong assets for the eco-products and it goes very well with our local traditions and understanding. In terms of our background, we are very much agro country so a very big part of our population is living in countryside. So there are very strong traditions on the usage of land, the usage of herbs and still everything is alive.† There is much support for preserving the traditions, country and land. As a country we actually sell a lot of CO2 credits to other countries and that is part of the income for our country. If I had the opportunity, I would consider branding for business with messages such as ďinvest greenĒ in our country. I think this would be a good extension for the tourism brand. It would give a good frame for what business we consider good for the future, which would be any business that is not energy intensive. There are some good businesses, including incubators. For instance, there are good products that our research specialists have made that fight cancers based on viruses. So specific viruses can successfully fight certain cancer types. There are also some products made from the amber, which are also novelty. I think these things are very important for our country for moving forward and we can build on this. I see this for our economy as an opportunity to jump over some stages of economic development. Like it was for instance with software, in which Eastern Europe jumped onto the stage and very much skipped the hardware and software stage which was expensive. We just jumped into the Microsoft and Apple world. By the way, in Latvia, we have one of the best internet infrastructures. We enjoy very, very fast internet. That is also one of the assets that is appreciated more and more because more internet-based services actually come to Latvia.
Q5. Clearly, bilateral relations between Russia and Latvia are important for both countries. From your perspective as an expert in Latvian tourism, advertising and marketing among many other things, do you view Russian-Latvian relations as complementary, competitive or perhaps a bit of both?
I think itís a bit of both because after all, we are neighbours. Neighbours are neighbours. There are good things and then there are things that would probably be good to forget as fast as possible. Right now we are at the stage of understanding that history is history and you cannot have a future if you live in the history. I am looking forward to this cooperation as a pragmatic opportunity. Last year, Russian tourists numbers were 70-75% higher compared to 2009 and this was really the top increase. I should say that from market research, they have the top net promotion score. Germany was second and Russia was the first. So in that sense you will discover that things are not like you might think. †You should come see that itís really different and no problems have been raised.
Q6. Finally, stemming from Japanese business practices and from the sociologist Roland Robertson, the invented concept of ďglocalizationĒ or the fusion of the global and local has broad implication on business practices internationally. Could you provide a few comments on the effects of glocalization and what this means for the advertising and marketing of products and services in Latvia and beyond?
Thatís exactly what I said about good years and bad years. If something gets stronger locally, then there are opportunities globally. I think that the big change is because of the internet. In terms of how we see marketing for Latvia, we see it quite focussed on the internet because thatís an environment where you can go to get the more authentic and true story about what is actually happening. You can be informed on †what is the product and what is the feeling. †Global communications, which I would say from a marketing and communications perspective is paid advertising, are getting stronger. The opposite side which is individual communication, peer-to-peer communication and word of mouth communication, is also getting stronger. From the financial perspective, we actually donít have the choice to go for paid advertising because we canít afford it. So we will go with the word of mouth and other types of communications. And thatís actually an advantage for us and we should use it. Thatís one strong argument as to why we have developed the brand as it is. I think for us, itís a good opportunity and we should use it smartly. We definitely are in favour in glocalization because itís the way we can survive and also an advantage for us.
Q7. In terms of using word of mouth, is Latvia using cultural exchanges to further that word of mouth?
I think it is a bit tricky because in terms of cultural experience and cultural exchange, the historical background of Latvia was quite difficult. I should say that we are very open in terms of communication but it will take a while to get acquainted with whom we are communicating. Our history of different neighbouring countries ruling us has made us a bit concerned about the intentions of people coming to Latvia. But according to research, people that come more and more to Latvia, come because of the hospitality. So I would say that maybe we donít smile on a regular basis, but when we smile, we really smile. This is perhaps something that has not been a fast development, but itís a good development. We engage more and more in this cultural experience. As I mentioned, we are in our teenage years and we need to figure out that we donít necessarily have to run around the world but that we have our own assets too.
Thank you very much for your time and input.