Factors affecting the development of catering enterprises in Latvia

In the European Union, including Latvia, catering services are the largest industry in the hospitality sector. The industry of catering services generates the largest part of value added and the majority of jobs in the hospitality sector. The research hypothesis is that the development of catering enterprises is unequal across the regions of Latvia, and various factors having different correlative interrelations affect it. The research aim is to investigate the factors affecting the development of catering enterprises in Latvia. According to the research result, low-turnover micro enterprises dominate in the industry of catering services in Latvia, and the number and proportion of enterprises of this size tend to increase. Medium and large catering enterprises in Latvia are concentrated in Riga region. The geographic distribution of catering enterprises in the regions of Latvia is uneven: the highest concentration of enterprises is in Riga region. In the period of 2005-2010, the number of enterprises has increased in the regions but these changes were insignificant. In Latvia, the number of catering enterprises per 1000 inhabitants significantly lags behind that in other European countries. A correlation analysis showed that household expenses on restaurants, cafes, and hotels (r=0.97); the number of visitors in tourist accommodations (r=0.93); food expenses of foreign overnight travellers (r=0.91); the number of foreign visitors in tourist accommodations (r=0.74); and household expenses on food and non-alcoholic beverages (r=0.65) affected the turnover of catering enterprises in Latvia. However, the number of residents (r=0.78) and the average net monthly wage of employees (r=0.53) affected the number of catering enterprises in Latvia. An analysis of the factors affecting the development of catering enterprises showed that during the economic crisis, households in Latvia concentrated their economic resources for satisfying their primary needs by reducing their expense on eating outside their home. The overnight traveller expense on food declined in Latvia, thus, the demand for services of catering enterprises also fell. After comparing the number of visitors in tourist accommodations in the regions of Latvia and the number of catering enterprises in the regions of Latvia, a causal relationship was observed – the number of catering enterprises was greater in the regions having a greater number of visitors in tourist accommodations.