Economics and Rural Development Vol. 8, No. 1, 2012 ISSN 1822-3346

INTERACTION BETWEEN THE NUMBER OF VISITORS AT TOURIST ACCOMMODATION ESTABLISHMENTS AND THE ECONOMIC DEVELOPMENT IN

Aina Muska1, Ligita Bite2

Latvia University of Agriculture, Latvia

The research hypothesis: the economic development of a district affects the number of visitors at tourist accommodation establishments outside region. The research aim is to identify a correlation between the number of visitors at tourist accommodation establishments and the economic development of a district in Latvia. The research was done using data broken down by statistical region and districts (a unit of administrative division of the territory of Latvia until the middle of 2009). The research showed that the majority (more than 60%) of visitors at Latvian tourist accommodation establishments were foreign tourists whose share at Riga tourist accommodation establishments accounted for more than 70%. Outside Riga region, more than 70% of visitors were local (Latvian) tourists, mostly business tourists. In the research period, more than half of visitors at tourist accommodation establishments concentrated in Riga region, while more than 10% – in Pieriga and Kurzeme regions. The share of visitors in the other regions did not exceed 6% of their total number. According to a cluster analysis, an explicit trend of monocentric economic development is specific to Latvia, resulting in significant differences between Riga, the capital city of Latvia, and the other . The number of visitors at tourist accommodation establishments is higher in the clusters having a high (Riga) and medium (districts of Riga, Liepaja, , and ) level of economic development than in the clusters with a lower level of economic development (districts of Aluksne, Balvi, , , Kraslava, , Preili, and ). Therefore, it can be concluded that in Latvia, the economic development of a district affects the number of visitors at tourist accommodation establishments. Key words: tourists, tourist accommodation establishments, economic development, cluster. JEL classification: A120; R110; O180.

Introduction sharper, reaching the level of 2004. The number of tourist accommodation establishments in Latvia has not adapted to In 2009, an economic crisis in the world and Latvia, the this declining trend, as their number as well as the number value added tax rate raised fourfold from 5% to 21%, negative of bed-places at tourist accommodation establishments in information regarding Latvia in foreign countries, and tough Latvia continue increasing. In the period of 2005-2008, the competition among tourist accommodation establishments in number of tourist accommodation establishments increased by the Baltic countries are the main reasons for a sharp downturn 73 units or 17%. In 2009 and 2010, this increase continued and for tourism businesses in Latvia. In 2009, the number of was 13% and 12% respectively (Central Statistical Bureau of foreign visitors at hotels and other tourist accommodation Latvia, 2010h; Ancitis, 2010). establishments declined to the level of 2005 compared with Specialists of the hotel sector believe that given 944 thousand in 2008 or the highest indicator in the history of the demand in 2009 and 2010, the number of tourist re-established Latvia. The number of local (Latvian) visitors accommodation establishments in Latvia is too large. at tourist accommodation establishments declined even Evita Zvarte, the director of the hotel “Radi un draugi”, ______1 Dr.oec., Department of Business and Management, Faculty of Economics, Latvia University of Agriculture Research fields:tourism and economic development Mailing address: Svetes iela 18, , LV – 3001, LATVIA E-mail address: [email protected] 2 Dr.oec., Department of Business and Management, Faculty of Economics, Latvia University of Agriculture Research fields: tourism, labour environment, wood resources Mailing address: Svetes iela 18, Jelgava, LV – 3001, LATVIA E-mail address: [email protected] 20 Vol. 8, No. 1, 2012 ISSN 1822-3346 Economics and Rural Development

Table 1. Number and share of visitors at tourist accommodation establishments in Riga and Latvia for the period of 2005-2009

Indicators 2005 2006 2007 2008 2009 Total number of visitors in Latvia 1154657 1329890 1487379 1555936 1113898 incl. foreign visitors in Latvia 730146 816297 844828 944690 753875

Share of foreign visitors in Latvia (%) 63 61 57 61 68

Number of foreign visitors in Riga 556595 607583 625590 702378 589106

Share of foreign visitors in Riga (%) 76 74 74 74 78

Share of foreign visitors outside Riga (%) 24 26 26 26 22

Source: Central Statistical Bureau of Latvia, 2010h and authors’ calculations believes that the present number of tourist accommodation analysis – cluster analysis, economic statistical methods, and establishments “probably is appropriate for the South of Spain synthesis and analysis. where the sun shines all the year round but not for Latvia” The present research includes the period after Latvia Ancitis, 2010). joined the European Union, i.e. from 2005 to 2009 and is done In 2009, the average occupancy rate of hotels in Latvia using data broken down by statistical regions and districts (a was 28.6%; it is the lowest indicator at least during the recent unit of administrative division of the territory of Latvia until 10 years. Besides, the occupancy rate of hotels in Latvia is the middle of 2009). lower than in Lithuania and Estonia (Central Statistical Bureau of Latvia, 2010h). The occupancy rate fell to a critical level not The number of visitors at tourist accommodation only due to the economic crisis, but also due to the imprudent establishments construction of tourist accommodation establishments, i.e. demand was not adjusted to a long-term supply. In the period of 2005-2008, the number of visitors at Data of the Central Statistical Bureau indicate that outside tourist accommodation establishments in Latvia gradually the capital city, the main consumers of services of tourist increased and reached 1.6 million, while in 2009, the number accommodation establishments are local tourists – Latvian of visitors decreased by 28% and was below the level of 2005 residents – and the majority of visitors are business tourists. (Table 1). Therefore, one can set forth the research hypothesis – According to the informative reports of the Ministry of economic development of a district affects the number of Economics on tourism development in Latvia, the following visitors at tourist accommodation establishments outside factors promoted the tourism industry’s development in Riga region. Latvia in the period of 2005-2008 (Ministry of Economics, The research aim is to identify a correlation between the 2007; Ministry of Economics, 2009; Tourism Ventspils, number of visitors at tourist accommodation establishments 2009): and the economic development of a district in Latvia. 1) Latvia as a tourist destination succeeded after its The following tasks were set forth to achieve the research accession to the European Union; aim: 2) availability of the European Union financial 1) to investigate changes in the number of visitors at tourist resources for improving and modernising the tourism accommodation establishments in Latvia; infrastructure and suprastructure as well as tourism 2) to investigate the economic development of the districts objects; of Latvia; 3) tourism marketing activities implemented in high priority 3) to compare the number of visitors at tourist (Lithuania, Estonia, Finland, , Great Britain, accommodation establishments in the districts of Latvia Germany, Norway, and Russia), priority (Denmark, with the result of a cluster analysis. , Belarus, the Ukraine, the Netherlands, Italy, The following information and literature sources: Spain, France, the Czech Republic, Slovakia, Ireland, data of the Central Statistical Bureau, planning documents Switzerland, Austria) as well as prospective tourism and reports developed by the Ministry of Economics for the markets (the USA, Japan, China, Slovakia, countries of tourism industry as well as the authors’ previous researches the Balkan region); were used to achieve the aim, execute the tasks, and prove or 4) increase in the number of direct air routes; reject the hypothesis. 5) increase in the number and amount of services provided The following research methods were applied: the by low-fare airline companies; monographic method, the method of multifactor statistical 6) development of Latvia’s seaports; 21 Economics and Rural Development Vol. 8, No. 1, 2012 ISSN 1822-3346

Table 2. Number and share of visitor nights at tourist accommodation establishments in Riga and Latvia for the period of 2005-2009

Indicators 2005 2006 2007 2008 2009 Total number of visitor nights in Latvia 2634209 3113846 3324690 3501063 2543111 of which in Riga 1513379 1854475 1963689 2085166 1579901

Share of visitor nights in Riga (%) 57 60 59 60 62

Number of foreign visitor nights in Latvia 1612671 1872393 1935984 2115618 1699562

Share of foreign visitor nights in Latvia (%) 61 60 58 60 67

Number of foreign visitor nights in Riga 1156986 1386943 1384754 1524122 1264019

Share of foreign visitor nights in Riga (%) 72 74 72 72 74 Source: Central Statistical Bureau of Latvia, 2010h and authors’ calculations

Table 3. Overnight trips of local tourists by place of stay in Latvia for the period of 2005-2009 (%)

2005 2006 2007 2008 2009

Indicators trips trips trips trips trips Recreational Recreational Recreational Recreational Recreational Business trips Business trips Business trips Business trips Business trips

Hotels and similar accommodation establishments 4 48 4 54 5 45 6 54 4 49

Other collective accommodation establishments 4 13 5 4 7 2 4 3 3 1

Private shelters 92 39 91 42 88 53 90 43 90 40 Specialised accommodation ------3 10 establishments Source: Central Statistical Bureau of Latvia, 2007a; 2008; 2009; 2010h

7) international cooperation of Latvia’s tourism industry: period until 2008, while their annual increase rate was lower participation in the UN World Tourism Organisation, than the increase rate for foreign tourists. the European Travel Commission, the European Due to the economic crisis, the purchasing power of Commission’s Advisory Committee on Tourism, and the residents and local businessmen declined, reducing the Sustainable Tourism Group; domestic demand for tourism services as well. Therefore, 8) economic growth in Latvia meaning that residents earn the number of local visitors at tourist accommodation more and can spend their money on travels; establishments decreased by more than a third (38%) in 9) development of international and local businesses that 2009, which is almost two times more than for the number promotes business trips; of foreign tourists. 10) large international events taking place in Latvia, especially The share of foreign tourists at tourist accommodation the NATO summit 2006 in Riga (28-29 November), World establishments in Riga accounts for more than 70%; thus, the Hockey Championship 2006 (5-21 May). share of foreign tourists is less than 30% in the rest of Latvia. Table 1 shows that 62% of visitors at tourist It means that outside Riga region, more than 70% of visitors accommodation establishments on average were foreign at tourist accommodation establishments are local (Latvian) tourists over the research period. It means that on average tourists. only 38% of visitors at tourist accommodation establishments After analysing the percentage distribution of foreign were local tourists whose number gradually increased in the tourists in Latvia by regions, one can see that approximately

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Table 4. Number and share of visitors at tourist accommodation establishments in the regions of Latvia for the period of 2005-2009

2005 2006 2007 2008 2009

Regions Number Number Number Number Number Share (%) Share (%) Share (%) Share (%) Share (%)

Riga 663800 57 733535 55 825419 55 869975 56 689330 62 Pieriga 198600 17 239637 18 247969 17 253625 16 167105 15 73800 6 86069 6 83100 6 81301 5 46362 4 Kurzeme 131700 11 156577 12 199144 13 228116 15 133363 12 Zemgale 39300 3 47538 4 50458 3 38407 2 27093 2 47500 4 66534 5 81289 5 84512 5 50645 5 Source: Central Statistical Bureau of Latvia, 2010d; 2010e and authors’ calculations

11% of foreign tourists are served at tourist accommodation accommodation establishments in Riga. The majority establishments in Pieriga region (mainly (Jurmala (61% on average) of all visitor nights in Latvia is spent by and )), approximately 6% – in Kurzeme region, foreign tourists. In the research period, the majority –73% 2% – in the regions of Latgale and Vidzeme, and less than on average – of foreign visitor nights were spent at tourist a percent – in Zemgale region (Central Statistical Bureau of accommodation establishments in Riga. It means that mostly Latvia, 2010h). Thus, foreign tourists mainly stay at tourist local tourists stay outside the capital city. Foreign tourists accommodation establishments in the city and district of mainly stay at hotels in Latvia. It is important to ascertain the Riga, while local tourists are visitors in the rest of Latvia’s type of tourist accommodation establishments preferred by districts. In the period of 2005-2008, significant changes in the local tourists (Table 3). percentage distribution of visitors at tourist accommodation In the research period, according to Table 3, on average establishments did not occur but the share of foreign tourists 10% of overnight recreational trips were spent at tourist in 2009 increased due to a significant decrease in the number accommodation establishments, while 90% on average – of local tourists. in private shelters. On the contrary, only in 43% cases The main countries of origin for foreign tourists served on average overnight business trips are spent at private at tourist accommodation establishments in the research shelters. It means that the majority of local visitors at tourist period were Germany (on average 8% of the total number accommodation establishments in Latvia, mostly hotels of foreign tourists), Russia (approximately 5%), Finland and similar tourist accommodation establishments, are (6%), Lithuania (6%), Estonia (6%), Sweden (4.5%), and business tourists. Norway (4%). Therefore, these are the countries of tourism Data on the number of visitors at tourist accommodation markets of high priority for Latvia. These countries prefer establishments in the regions of Latvia are summarised the geographical situation of Latvia, the countries having a in Table 4. large number and high density of population and a relatively In the period of 2005-2008, according to Table 4, the high level of income. Latvia has intense air and sea transport number of tourists gradually increased in the regions of connections with these countries. According to statistical Riga, Pieriga, Kurzeme, and Latgale; whereas in some data, most tourists arrive from these countries (Central periods it has decreased in the regions of Vidzeme and Statistical Bureau of Latvia, 2007a; 2008; 2009; 2010h; Zemgale. The highest annual increase rate was observed Ministry of Economics, 2006). in the regions of Latgale and Kurzeme; while the The analysis of the indicator “number of visitor highest annual decrease rate was observed in Zemgale nights” (every night spent by a tourist (sleeping and region. staying) or a tourist is registered at a public or private In 2009, the number of tourists decreased in all the regions tourist accommodation establishment) (Central of Latvia. The sharpest decrease was observed in Vidzeme Statistical Bureau of Latvia, 2010h) reveal similar trends region (43%) and Kurzeme region (42%) as well as Latgale (Table 2). region (40%). The smallest decrease rate was observed in Table 2 shows that in the research period, 60% of all Riga region (21%), i.e. in the region where foreign tourists visitor nights in Latvia on average were spent at tourist are the main customers.

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Source: authors’ construction based on the data of the Central Statistical Bureau of Latvia, 2010d; Group 93 Ltd, 2011

Figure 1. Number of visitors at tourist accommodation establishments in the districts of Latvia in 2008

Until 2009, Latvian residents had more business an average tourist accommodation establishment in Riga trips, various training activities, seminars, and social region is more than 100 bed-places. In the other regions, it events, the number of which significantly declined in does not exceed 50 bed-places. The smallest capacity tourist 2009 (Day, 2009). It explains the fact that the sharpest accommodation establishments are located in the regions decrease in the number of visitors at tourist accommodation of Zemgale and Vidzeme, i.e. in the regions with a small establishments in Latvia in 2009 was observed in all the number of visitors (Muska, Bite, 2011). Significant changes regions, except Riga region. in the average number of bed-places have not occured A percentage distribution analysis on the number of visitors despite the fact that the numbers of tourist accommodation by region showed that more than half of all visitors of tourist establishments and bed-places continue to increase in accommodation establishments concentrate in Riga region; the regions of Latvia while more than 10% – in the regions of Pieriga and Kurzeme. An insignificant number of visitors at tourist The share of visitors does not exceed 6% of their total number accommodation establishments can be explained by a lack in the rest of Latvia’s regions. The data in Table 4 show that of interesting tourism objects in the regions and irregular in 2009 when the number of visitors at tourist accommodation marketing activities. establishments declined both in the entire Latvia and in all The numbers of visitors are unequal if not only broken its regions, the share of visitors at tourist accommodation down by region but also by district of the regions. The establishments in Riga increased by 6 percentage points. main destinations for recreational and business trips in One of the key hindering factors preventing from Kurzeme region are Liepaja and Ventspils, in Latgale diverting the flow of tourists from Riga to the other region – Daugavpils and Rezekne, in Vidzeme region – Cesis regions of Latvia as well as from increasing the duration and , and in Pieriga region – Riga district (Sigulda of stays and the number of tourists is the insufficient and Jurmala), Figure 1. capacity of tourist accommodation establishments. There It is necessary to assess the economic development is a lack of large tourist accommodation establishments of Latvia’s districts and to compare it with the number that could accommodate a large number of tourists of visitors at tourist accommodation establishments and, at the same time, hold events of national and in the districts to prove or reject the hypothesis. The international scale in the regions of Latvia, including authors have chosen the data of 2008 for the present Riga region. research both from the point of view of data availability An analysis on the average number of bed-places and fact that the largest number of visitors at tourist showed that tourist accommodation establishments with the accommodation establishments in Latvia was observed in largest capacity are located in Riga region. The capacity of that year. 24 Vol. 8, No. 1, 2012 ISSN 1822-3346 Economics and Rural Development

Economic development assessment of the districts of most appropriate option, as the number of Latvia’s districts Latvia was more equable with such a distribution into clusters. In addition to the clustering results, the clusters were ranked A cluster analysis was performed to compare the economic for all the statistically significant indicators to determine the development in the districts of Latvia according to various overall development level of each cluster in relation to the indicators. For the cluster analysis, 15 statistical indicators other clusters (Table 5). were selected based on the publication “Development The ranking showed that the most positive situation of Regions in Latvia 2009”, Arhipova et al., 2005, regarding economic development was in Cluster 1 that Paiders, 2007: included only the capital city of Riga. During the ranking, the 1) number of residents in the beginning of 2009; values of all the statistically significant indicators were placed 2) changes in the number of residents (from the beginning of in the first position for Cluster 1. The values of 3 statistically 2005 to the beginning of 2009, %); insignificant indicators (net annual wage in the private sector, 3) population density in the beginning of 2009 (residents per number of economically active market-sector statistical units 1 km2 of territory); per 1000 residents, and non-financial investment per capita) 4) number of employees at their basic job placement in 2008 were also placed in the first position. Only the value of the (thou.); statistically insignificant indicator “changes in the number of 5) net annual wage in the private sector in 2008 (LVL); residents” was placed in the fourth position during the ranking, 6) net annual wage in the public sector in 2008 (LVL); as many residents of the capital city have moved to Pieriga 7) number of economically active market-sector statistical region over the recent years. units per 1000 residents in 2008; Cluster 2 included the districts of Riga and Daugavpils. 8) number of businessmen per 1000 residents in 2008; The values of all the mentioned indicators were placed in the 9) total revenues of the government basic and special budgets second position, except the indicators: revenues of the basic in 2008 (LVL); budget per capita and Gross Domestic Product per capita. The 10) revenues of the government basic budget in 2008 (LVL); values of these indicators were reduced by the large number 11) revenues of the government basic budget per capita in of residents in the districts included in this Cluster. The same 2008 (LVL); related to the indicator “non-financial investment per capita”. 12) Gross Domestic Product in 2006 (thou. LVL); The average values of the statistically insignificant indicators 13) Gross Domestic Product per capita in 2006 (LVL); “net annual wage in the private sector” and “number of 14) non-financial investment in 2006 (LVL); economically active market-sector statistical units per 1000 15) non-financial investment per capita in 2006 (LVL). residents” were low and placed only in the sixth position. The These statistical indicators were summarised for all statistically insignificant indicator “changes in the number of 26 districts of Latvia. The city of Riga or the country’s residents” was placed in the first position, and the average capital was excluded from Riga district. value of this indicator was positive only for Cluster 2. It has Dispersion analysis (ANOVA), which is included in the to be mentioned that the average value of this indicator is data processing module Cluster Analysis of the application significantly impacted by the positive change (9.6%) in the SPSS for Windows, showed that all the selected indicators, number of residents in Riga district. In , except four – changes in the number of residents, net annual this change is negative. wage in the private sector, number of economically active After comparing the average values of Clusters 2 and 1, market-sector statistical units per 1000 residents, and non- one can conclude that there is a significant difference between financial investment per capita – were statistically significant them, pointing that the economic development level in the for grouping districts into clusters. Their significance level capital city is much higher than in the districts included in did not exceed 0.05. The authors did not reject the statistically Cluster 2. Inese Haite (2010) concludes similarly, “under insignificant indicators in the present research, as they wanted the influence of the monocentric situation in the country, the to ascertain the effect of these indicators on the economic development level in the region of the capital city is higher development of districts. If the authors rejected these 4 than in the rest of the territory.” statistically insignificant indicators, they would not impact Cluster 3 included 2 districts – Jelgava and Liepaja. results of the cluster analysis, i.e. the authors’ conclusions The average values of the statistical indicators “number would be the same. of businessmen per 1000 residents” and “changes in the The cluster-to-cluster distances obtained show that there is number of residents” were placed in the second position, the a relationship among the clusters. The clusters being closer to indicator “GDP per capita” had the fourth position, and the each other can move to another level if a new distribution of indicator “net annual wage in the public sector” as well as the them is performed, and they can create new clusters or cluster statistically insignificant indicators “number of economically groups. active market-sector statistical units per 1000 residents” and In clustering the statistical data, several numbers of clusters “non-financial investment per capita” took the fifth position; were considered: from 2 to 10 clusters. Division of the territory all the values of the other indicators were placed in the third of Latvia by economic development into 7 clusters was the position. 25

Economics and Rural Development Vol. 8, No. 1, 2012 ISSN 1822-3346

value

Average Average 7 7 7 7 7 7 3 6 7 7 7 Rank Cluster 7 56 15

254 7.39 9.04 7.81

3820 2992 14.47 - 5.46 31196

value

Average Average 6 6 5 6 3 5 2 5 6 6 6 Rank Cluster 6 57 20

261

4085 3513 11.93 19.87 12.46 13.79 - 2.83 47026

value

Average Average 5 5 3 5 6 4 3 3 5 5 5 Rank Cluster 5 56 22

351 20.5

4024 3587 15.05 21.35 19.35 - 2.20 55215

value

Average Average 4 4 6 4 4 2 4 4 4 4 2

value Cluster 4 Average 50 21

513

4037 3953 24.55 21.45 36.65 32.78 - 3.50 65803 Rank

3 3 2 3 5 3 5 2 3 3 3

value Cluster 3 Average 49 24 485

48.4 4036 3897 36.75 60.55 55.41

- 1.40 115260 Rank

2 2 1 2 2 6 6 2 2 2 4

value Cluster 2 Average 41 24 358

62.8 2.10 58.8 4110 3489 72.65 63.36

185863 Rank

1 1 4 1 1 1 1 1 1 1 1 value

Average values and ranks of clusters in the cluster analysis economic development Latvia Average Cluster 1 Average 69 56 778 5737 5250 400.1 - 2.60 2353.2 606.80 554.77 713016 Table 5. Table Indicators 2 Number of residents people per Population density, 1km Changes in the number of residents in 2005-2009, % Number of employees, thou. Net annual wage in the public LVL sector, Net annual wage in the private LVL sector, Number of economically active market-sector statistical units per 1000 residents Number of businessmen per 1000 residents revenues of the basic and Total special budgets, mln. LVL Revenues of the basic budget, mln. LVL Revenues of the basic budget per capita, LVL

26 Vol. 8, No. 1, 2012 ISSN 1822-3346 Economics and Rural Development 7 7 7 7 100 - 1980 26.19 64249 810.24 Aluksne Balvi Dobele Gulbene Kraslava Limbazi Ludza Preili Valka 6 5 6 6 79 - 2573 57.33 122971 1202.20 Jekabpils Kuldiga Ogre Valmiera 5 6 5 4 69 - 2435 69.15 136374 1243.25 Cesis 4 2 4 2 54 - 3702 121.75 237340 1963.65 Rezekne Ventspils 3 4 3 5 50 - 3213 142.35 378723 1215.55 Jelgava Liepaja 2 3 2 3 41 - 3299 338.15 624151 1671.55 Daugavpils Riga district 1 1 1 1 18 Average values and ranks of clusters in the cluster analysis economic development Latvia Average - 9272 2034.90 2816.50 6722327 Riga city Table 5 continued. Table authors’ research applying the data of the Central Statistical Bureau of Latvia, 2007; 2010; 2010a; 2010b; 2010c; 2010f; 2010g and State Regional Development Agency, 2009 Agency, of Latvia, 2007; 2010; 2010a; 2010b; 2010c; 2010f; 2010g and State Regional Development applying the data of Central Statistical Bureau research authors’ GDP, thou. LVL GDP, per capita, LVL GDP Non-financial investment, mln. LVL Non-financial investment per capita, LVL rank Total Districts included in Clusters Source: Source:

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Cluster 4 also included 2 districts – Rezekne and Ventspils. there is no significant difference between the average values The statistical indicators “revenues of the basic budget of Clusters 3 and 6. per capita”, “GDP per capita”, “non-financial investment Cluster 6 included 9 districts of Latvia – Aizkraukle, per capita”, and “net annual wage in the private sector” Bauska, Jekabpils, Kuldiga, Madona, Ogre, Saldus, Talsi, were placed in the second position. The values of the other and Valmiera. The average values of the mentioned statistical indicators had the fourth position, except the indicator indicators for this Cluster were mainly placed in the sixth “changes in the number of residents”. The value of this position. Consequently, the level of economic development in statistically insignificant indicator was placed in the sixth this Cluster is lower than in the previous five Clusters. position. The authors explain it by the large distance of this Cluster 7 also included 9 districts – Aluksne, Balvi, district to the capital city (average value is 213 km), which Dobele, Gulbene, Kraslava, Limbazi, Ludza, Preili, and Valka. promotes the migration of residents of these districts to the All the selected statistical indicators characterising economic capital city and its nearest districts. development were mostly placed in the lowest positions, so Since the average value of the indicator “number of the districts included in this Cluster featured the lowest level residents” in Cluster 4 is smaller than the respective values of economic development. in Clusters 2 and 3, the value of the indicator “revenues of As it was mentioned, the “highest” indicator of Clusters the basic budget per capita” is greater; although, the indicators 6 and 7 is the “number of economically active market-sector “total revenues of the government basic and special budgets”, statistical units per 1000 residents” owing to the large number “revenues of the basic budget” as well as “GDP” are almost of self-employed individuals residing in the districts included two times smaller. in these Clusters. Cluster 5 included the districts of Cesis and Tukums. The “highest” statistically significant indicator of this Cluster’s is Analysis of the results the “number of businessmen per 1000 residents”, which was placed in the third position during the ranking; however, if After comparing the results of the cluster analysis with the the average values of this indicator were compared between number of visitors at tourist accommodation establishments Clusters 2, 3, 4, 5 and even 6, one can see that there were in 2008, one can see that the number of visitors at tourist no significant differences. A similar conclusion can be accommodation establishments is larger in the Clusters with a made regarding the indicator “net annual wage in the public higher level of economic development than in those having a sector” which is placed in the low sixth position; however, if lower level of economic development. its average values are compared between Clusters 3, 4, and The largest number of visitors at tourist accommodation 5, one has to conclude that no significant differences exist establishments is in Riga – the capital city – that is included in between them. The indicator “GDP per capita” is placed Cluster 1. The majority or 81% of visitors are foreign guests. in the low sixth position as well. The values of the other The number of local tourists is 167597 or 19% of the total statistically significant indicators are placed in the fifth number of visitors in the city. position. Riga district, which is included in Cluster 2, totally The statistically insignificant indicator “changes in the serviced 209038 tourists – this is the second highest indicator number of residents” is placed in the high third position, as in the country. Along with Riga district, Daugavpils district of the two districts included in Cluster 5 are located near the Latgale region, which serviced 37524 visitors, is included in country’s capital city. The indicator “number of economically Cluster 2; it is the fifth highest indicator in the country. active market-sector statistical units per 1000 residents” Liepaja district, which is included in Cluster 3, is placed in the third position as well. This indicator is also serviced 84683 visitors (the fourth highest indicator in high in Clusters 6 and 7, which according to the authors is the country), while there were only 13141 visitors in explained by the large number of self-employed individuals. . According to the publication “Development of Regions in The relatively high level of economic development of Latvia 2009”, the number of businessmen prevail over the Jelgava district can be explained by its close location to the numbers of self-employed individuals and farms and fishing capital city and Riga district that positively influence the farms, i.e. two thirds versus one third. On the contrary, district’s economic indicators. Jelgava district is a part of self-employed individuals made up the majority in all the Zemgale region. A previous research conducted by the authors other regions of Latvia in 2008. In Latgale, self-employed (Muska, Bite, 2011) showed that the development level of individuals even accounted for more than half (51%) of total tourist accommodation establishments in Zemgale region number of economically active market-sector statistical units. significantly lagged behind that in the other regions of Latvia. A large number of self-employed individuals are also observed According to the cluster analysis of tourist accommodation in Vidzeme region (44%) and Kurzeme region (41%) (State establishments, Jelgava district belongs to Cluster 7 out of Regional Development Agency, 2009, p. 33). eight ones. The data of Table 4 also indicate that only less The statistically insignificant indicator “non-financial than 3% of visitors at tourist accommodation establishments investment per capita” is placed in the fourth position but were serviced in Zemgale region in the research period.

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It explains the small number of visitors at tourist indicator in the country. Among the districts of Pieriga region, accommodation establishments of the district. the largest number of visitors at tourist accommodation , which is included in Cluster 4, serviced establishments was in Limbazi district – 9908. 97580 visitors. This is the third highest indicator in the country after the city and district of Riga. In Ventspils district, a great Conclusions role in developing tourism as well as the national economy and in increasing the number of visitors is played by Ventspils city 1. The majority (more than 60%) of visitors at Latvian tourist that has actively implemented tourism-marketing activities accommodation establishments is foreign tourists whose and developed its tourism suprastructure and human-made share at Riga tourist accommodation establishments amusements over the recent years (Tourism in Ventspils, account for more than 70%. Outside Riga region, more 2010). than 70% of visitors are local (Latvian) tourists, mostly Rezekne district, also included in Cluster 4, served only business tourists. 29584 tourists. 2. In the research period of 2005-2009, more than half The previous research conducted by the authors (Muska, of visitors at tourist accommodation establishments Bite, 2011) showed that among the districts of Latgale region, concentrate in Riga region; while more than 10% - in the most developed tourist accommodation establishments Pieriga and Kurzeme regions. The share of visitors in the were in the districts of Daugavpils and Rezekne. Therefore, other regions does not exceed 6% of their total number. the largest number of visitors in Latgale region was served in Thus, tourism, especially local tourism outside Riga these two districts. region is insufficiently developed. Cluster 5 includes the districts of Cesis and Tukums. Cesis 3. An explicit trend of monocentric economic development district served 32107 visitors, while – 17667 is specific to Latvia, resulting in significant differences visitors. between Latvia’s capital city of Riga and the other Cesis district, especially the of Cesis, is a well- districts of Latvia. It means that the development of known tourism centre for Latvian residents and many entrepreneurship in tourism industry is facilitated by the foreign tourists that is explicitly subject to seasonality and development of other industries in Latvia and there is a that has a successfully developed environment for tourism interaction between these indicators. infrastructure. Cesis is known as the most hospitable town in 4. The number of visitors at tourist accommodation Latvia that was able to preserve its ancientness and can offer establishments is higher in the clusters having a a wide assortment of tourism services. Over the recent years, high and medium level of economic development several activities were done in Cesis to repair and develop than in the clusters with a lower level of economic its tourism infrastructure (Cesis Local , 2008). development. Therefore, the research hypothesis is The cluster analysis of tourist accommodation establishments proved that the economic development of a district conducted by the authors (Muska, Bite, 2011) showed that affects the number of visitors at tourist accommodation the most developed tourist accommodation establishments in establishments. Vidzeme region were in Cesis district. 5. Before investing financial resources in the development A small number of tourists in Tukums district can be of tourism suprastructure, the state, , explained by the fact that Pieriga region is an infrequent and businessmen should evaluate the potential of the destination in Latvia for overnight business trips (Central development of other industries in the region to determine Statistical Bureau of Latvia, 2010h). the potential demand for suprastructure services. The number of tourists in Clusters 6 and 7, whose levels of 6. To facilitate the development of hotel business in Latvia, economic development is lower, is small compared with the the state, public organisations of tourism industry and above-mentioned Clusters. businessmen should engage in more active marketing, Among the districts included in Cluster 6, the largest especially in the local market, to enhance the development number of visitors (24043) was registered in ; of local recreational tourism. whereas the smallest numbers of visitors were served in the districts of Aizkraukle, Jekabpils, and Bauska, i.e. the districts Bibliography of Zemgale region. In , which is included in Pieriga region, the 1. Ancitis T. (2010). The Present Number of Hotels in Latvia number of tourists is close to the number of visitors in Tukums is More Appropriate for the South of Spain. Available district – slightly more than 17000. The research done by at: http://www2.la.lv/lat/latvijas_avize/jaunakaja_ Muska and Bite (2011) showed that the situation regarding numura/?doc=75344. tourist accommodation establishments was similar in the two 2. Arhipova I., Balina S., Rudusa I. (2005). The Quantitative districts. Analysis of Latvia Regions Development Criteria. , which is included in Cluster 7 and belongs Scientific Papers, University of Latvia, Volume 690, to Zemgale region, served only 1371 visitors; it is the lowest Management, pp. 151 – 159.

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3. Central Statistical Bureau of Latvia (2007). Gross Iedzsoc/Annual%20statistical%20data/Occupied%20 Domestic Product by Statistical Region, City and District. jobs%20and%20job%20vacancies%20paid%20 Available at: http://data.csb.gov.lv/Dialog/varval.asp?m working%20hours/&lang=1. a=IK0020a&ti=IK02.+GROSS+DOMESTIC+PRODU 11. Central Statistical Bureau of Latvia (2010d). Hotels CT+BY+STATISTICAL+REGION%2C+CITY+AND+ and Other Tourist Accommodation Establishments DISTRICT&path=../DATABASEEN/ekfin/Annual%20 by Statistical Region, City and District in 2005-2008. statistical%20data/02.%20Gross%20domestic%20 Available at: http://data.csb.gov.lv/Dialog/varval.asp?m product/&lang=1. a=TU0090a&ti=TU09.+HOTELS+AND+OTHER+TO 4. Central Statistical Bureau of Latvia (2007a). Tourism in URIST+ACCOMMODATION+ESTABLISHMENTS+ Latvia in 2006. A Collection of Statistical Data, Riga, BY++STATISTICAL+REGION%2C+CITY+AND+DI pp. 44- 49. STRICT+&path=../DATABASEEN/transp/Annual%20 5. Central Statistical Bureau of Latvia (2008). Tourism in statistical%20data/20.%20Tourism/&lang=1. Latvia in 2007. A Collection of Statistical Data, Riga, 12. Central Statistical Bureau of Latvia (2010e). Hotels pp. 45-50. and Other Tourist Accommodation Establishments by 6. Central Statistical Bureau of Latvia (2009). Tourism in Statistical Region, City and County in 2009. Available Latvia in 2008. A Collection of Statistical Data, Riga, at: http://data.csb.gov.lv/Dialog/varval.asp?ma=TU0091 pp. 45-51 a&ti=TU091.+HOTELS+AND+OTHER+TOURIST+A 7. Central Statistical Bureau of Latvia (2010). Administrative CCOMMODATION+ESTABLISHMENTS+BY+STAT Division and Population Density by Statistical Regions, ISTICAL+REGION%2C++CITY+AND+COUNTY&p City and Districts. Available at: http://data.csb.gov.lv/ ath=../DATABASEEN/transp/Annual%20statistical%20 Dialog/varval.asp?ma=IE0010a&ti=IE01.+ADMINIST data/20.%20Tourism/&lang=1. RATIVE+DIVISION+AND+POPULATION+DENSIT 13. Central Statistical Bureau of Latvia (2010f). Market Y+BY+STATISTICAL+REGION%2C+CITY+AND+D Sector Economically Active Statistical Units by ISTRICT%2C+1995+2009++&path=../DATABASEEN/ Statistical Region, City and District. Available at: http:// Iedzsoc/Annual%20statistical%20data/04.%20 data.csb.gov.lv/Dialog/varval.asp?ma=SR0050a&ti=S Population/&lang=1. R05.++MARKET+SECTOR+ECONOMICALLY+AC 8. Central Statistical Bureau of Latvia (2010a). TIVE+STATISTICAL+UNITS+BY+STATISTICAL+ Average Monthly Wages and Salaries in Cities Under REGION%2C+CITY+AND+DISTRICT%2C+2004+ State Jurisdiction and District by Quarter (in lats). 2008&path=../DATABASEEN/rupnbuvn/Annual%20 Available at: http://data.csb.gov.lv/Dialog/varval.as statistical%20data/23.%20Statistical%20business%20 p?ma=DS0100ac&ti=DS10.+AVERAGE+MONT register/&lang=1. Access: 15 August 2010. HLY+WAGES+AND+SALARIES+IN+CITIES+ 14. Central Statistical Bureau of Latvia (2010g). Resident UNDER+STATE+JURISDICTION+AND+DISTR Population by Region, City under State Jurisdiction and ICT+BY+QUARTER+%28in+lats%29++++++&p District at the Beginning of the Year, 2005-2009. Available ath=../DATABASEEN/Iedzsoc/Short%20term%20 at: http://data.csb.gov.lv/Dialog/varval.asp?ma=AIS02a statistical%20data/Wages%20and%20salaries/&lang=1. &ti=IS02A.+RESIDENT+POPULATION+BY+REGIO Access: 15 August 2010. N%2C+CITY+UNDER+STATE+JURISDICTION+AN 9. Central Statistical Bureau of Latvia (2010b). Economically D+DISTRICT+AT+THE+BEGINNING+OF+THE+YE Active Statistical Units in Statistical Regions, Cities under AR%2C+1990+2009&path=../DATABASEEN/Iedzsoc/ State Jurisdiction and Districts by Main Kind of Activity Annual%20statistical%20data/04.%20Population%20 (NACE rev 2.), 2005 – 2008. Available at: http://data.csb. F%20Archive/&lang=1. gov.lv/Dialog/varval.asp?ma=SR0060a&ti=SR06.+ECO 15. Central Statistical Bureau of Latvia (2010h). Tourism in NOMICALLY+ACTIVE+STATISTICAL+UNITS+IN Latvia in 2009. A Collection of Statistical Data, Riga, +STATISTICAL+REGIONS%2C+CITIES+UNDER++ pp. 35- 40. STATE+JURISDICTION+AND+DISTRICTS+BY+M 16. Central Statistical Bureau of Latvia (2011). Number AIN+KIND+OF+ACTIVITY+%28NACE+Rev+2.%2 of Visitors in Hotels and Other Accommodation 9%2C+2005+2008&path=../DATABASEEN/rupnbuvn/ Establishments. Available at: http://data.csb.gov.lv/ Annual%20statistical%20data/23.%20Statistical%20 Dialog/varval.asp?ma=TU0030ca&ti=TU03.+NUMB business%20register/&lang=1. ER+OF+VISITORS+IN+HOTELS+AND+OTHER+A 10. Central Statistical Bureau of Latvia (2010c). Employees CCOMMODATION+ESTABLISHMENTS&path=../ at the Main Job by Statistical Region, City and District. DATABASEEN/transp/Short%20term%20statistical%20 Available at: http://data.csb.gov.lv/Dialog/varval.asp?m data/20.%20Tourism/&lang=1. a=jvs0070a&ti=JVS07.+EMPLOYEES+AT+THE+M 17. Cesis Local Municipality (2008). Development AIN+JOB+BY+STATISTICAL+REGION%2C+CITY Programme of Cesis Town for 2008-2014. Tourism. +AND+DISTRICT++++++&path=../DATABASEEN/ Available at: http://www.cesis.lv/?d=1136.

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18. Day (2009). (Diena). In Hotels and Tourist – for a Third 23. Ministry of Economics (2007). Report on Tourism Less Customers. Available at: http://diena.lv/lat/business/ Development in Latvia in 2006. Informative hotnews/viesnicas-un-turisma-mitnes-par-tresdalu- Report, Riga. mazak-apmekletaju. 24. Ministry of Economics (2008). Basic Positions of 19. Group 93 Ltd (2011). (Grupa 93 SIA). Outline Map Tourism Development of Latvia for 2009-2015, of Latvia - Districts until 2009 1. Available at: http:// Project, Riga. www.grupa93.lv/content/kartes/Latvijas-konturkartes/ 25. Muska A., Bite L. (2011). Evaluation of the eng/Outline-maps-Outline-map-of-Latvia-Districts- Developments of Tourist Accommodation in the until-2009-1.jpg. Regions of Latvia. Proceedings of the International 20. Haite I. (2010). The Direction of Latvia from Monocentric Scientific Conference “European Integration to Polycentric Development. Latgale National Economy Studies” (No. 5), Kaunas University of Technology Research. Journal of Social Sciences, Volume 1(2), (ISSN 1822 – 8402) (submitted for publication). Rezekne, pp. 165 – 175. 26. Paiders J. (2007). The Replacement of GDP per Capita 21. Latvian Tourism Development Agency (2010). Tourism with a Different Parameter in Regional Development in Latvia. Available at: http://tava.gov.lv/userdate/File/ Level Measurements in Latvia. Scientific Papers, Prezentacijas/turisms_latvija_2010_LV.pdf. University of Latvia, Volume 717, Management, 22. Ministry of Economics (2006). Latvian Tourism pp. 94 – 117. Development Programme for 2006-2008, 27. Tourism in Ventspils (2010). Available at: Riga. http://www.tourism.ventspils.lv/?p=27.

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