Governmental Program on Tourism
Deputy Economy Minister Dimitar Hadjinikolov, responsible for tourism
CLEAR VISION OF A MODERN AND DEVELOPED TOURIST COUNTRY TOURISM-THE PHENOMENON OF OUR MODERN TIMES



The 20th century saw the birth of one of the most humane industries: tourism.
Tourism, once a privilege of a limited circle of people, has developed into a global industry which has become both an effect of and a crucial factor for quality of life in contemporary society.

The World Tourism Organisation reports 698 million international tourist trips in the year 2000, estimating that figures on domestic tourism are several times higher.

Those figures indicate that there is a truly free movement of people around the world.

Yet today tourism is much more than free movement of thousands of millions, an important leisure activity and a main means of political, economic and cultural contacts among people. Tourism has become an economic and social phenomenon in the everyday life of thousands of millions - a genuine phenomenon of our times.

Global revenues from international tourism in 2000 are estimated at US$ 478 billion, or an average of US$ 1.3 billion a day. To those revenues from sales of tourist services we should add US$ 97 billion from transport services related to international tourism.

In economic terms, international tourism revenues are classified as exports, and outbound travel expenditures, as imports for the respective country.

Even in the second half of the 20th century, experts forecast that international tourism would become the number one export category in the world economy. Indeed, in 1999 revenues from international tourism and related transport reached 8.1% of aggregate exports of goods and services world-wide, ahead of all other categories such as sales in the automotive and chemical industries and food-processing.

The WTO's Tourism Economic Report identifies tourism as one of the top five export categories in 83% and as the main source of foreign currency in 38% of the WTO member countries.

The US ranks first in this respect, with revenues exceeding US$ 85 billion in 2000 alone, and a market share of 17.8% by that indicator. Revenues from international tourism in the same year approximated US$ 30 billion each in the main countries from the Mediterranean region - Spain, France and Italy, and US$ 10 to 20 billion each in the UK, Germany, China, Austria and Canada. Around 60 of the 200 countries surveyed by the WTO reported over US$ 1 billion in international tourism revenues for 2000.

Expenditures on import of tourist services are an important item in a number of countries' balance of payments. In 2000, the US spent US$ 65 billion on import of tourist services; Germany, US$ 54 billion; the UK, US$ 37 billion; and Japan, US$ 33 billion etc.

Perhaps the importance of tourism in the contemporary world is illustrated best by a comparison of the growth rates of international tourism and GNP. The WTO figures show that in the 1975-2000 period international tourism grew by an annual average of 4.7%, and GNP, by 3.5%. In other words, in the 25 years under consideration international tourism grew around 35% faster than GNP as a whole.

A third major feature of this contemporary economic and social phenomenon is the number of jobs created by tourism world-wide. The World Travel and Tourism Council estimates that in 2001 tourism accounted for 207 million jobs, or 8% of the world total. Notably however, due to the specificity of tourism, each job in this industry creates prerequisites for three to five new jobs in other branches of the national economy.

In sum, this is what makes tourism a phenomenon today.

What do experts forecast about the future development of the industry?

On the whole, experts are unanimous:

In the past century, tourism was asserted as the number one export category in the world economy. In the new, 21st, century, tourism is expected to become the number one industry in the world.

And all of us here will, I hope, contribute to that.

Tourism in Bulgaria: A Priority Sector

International tourism in Bulgaria goes back a long way.

The first international package tourists visited this country in the 1920s.

Construction of the seaside resorts of Golden Sands and Sunny Beach started in the 50s, followed a decade later by Albena and the mountain resorts of Borovets and Pamporovo. In the conditions of central planning and 100% state ownership, in the 70s and 80s international tourism developed as one of the country's main sources of foreign currency. Against the background of ideological bloc division, Bulgaria won an international market niche with its low prices and mainly social, rather than economic, functions assigned to international tourism.

The period of transition from central planning to market economy saw the start of privatisation in Bulgarian tourism too. This process accelerated rapidly after 1997, and by the end of 2001 tourism was virtually a wholly private-owned industry in Bulgaria. Today more than 96% of all assets in Bulgarian tourism are in private hands, with privatisation scheduled for completion by the end of this year.

Tourism can definitely be said to have emerged as a booming industry in Bulgaria in recent years.

Privatisation in Bulgarian tourism has brought about a radical restructuring in supply. In 1995 more than 60% of hotels were in the low one- or two-star category, with four- and five-star hotels accounting for a mere 7% of available accommodation. By 2001 more than 12% of Bulgaria's hotels were high-grade, whereas the proportion of one- and two-star hotels had dropped by 10%. The same trend is to be found in Black Sea resorts, where three-star hotel accommodation has led the increase (rising from 33% to 40%). Those processes have also had a positive impact on specialised tourist infrastructure, especially in the seaside resorts. Dozens of new swimming pools, tennis courts, gyms and other facilities have been built in recent years.

Indicatively, investments in the post-privatisation period have been targeted mainly at improving quality and upgrading hotels. At the same time, a new form of accommodation has emerged - para-hotel facilities. The family hotel business has flourished in a number of population centres, mainly outside the popular tourist centres. Many family hotels, boarding houses and other facilities have been built. According to TourInfo, their number exceeds 1,700.

Privatisation - quality improvement - competitiveness: "quality/prices".

Those dry figures are not the only evidence of a new attitude to tourism. Today, many people see tourism as an industry that offers them a future, as well as alternative employment opportunities. Indicatively, more and more people are attending the retraining courses organised by the Ministry of Labour and Social Policy and participating in projects under the civic initiative and other programmes.

At the same time, in the past year international tourism has emerged as the number one export category in Bulgaria's national economy.

Border statistics show that in 2001 Bulgaria was visited by 5.1 million foreign citizens. Around 54% of them visited this country for the purpose of tourism, i.e. the number of international tourists exceeded 2.8 million people or more than 17% compared to 2000, which was considered a good year for tourism. Notably, the proportion of international tourists of the total number of internationals visiting Bulgaria has risen by more than 20%, i.e. from 31% in 1997 to 54% at present.

Tourists from the EU rank first by this indicator. A record number of German tourists - almost 375,000 - stayed in Bulgarian resorts in 2001, or over 42% more than the previous year.

International tourism revenues have exceeded US$ 1 billion in the past two years (according to the National Bank of Bulgaria), and are estimated at US$ 1.25 to 1.3 billion in 2001. According to preliminary figures, they account for more than 15% to 16% of national exports of goods and services, and by volume are the top export category in the Bulgarian economy.

Those results are encouraging.

But should we be satisfied with them?

Certainly not!

We must say that until recently, Bulgaria was not fully aware of the importance and potential of tourism in the country. Even though a series of government acts and political party programmes identified tourism as a priority industry for dozens of years, the importance of this industry was, in fact, underrated. Notably, Bulgaria does not have a national strategy and development policy on tourism approved at a top government level. The fact that tourism is not recognised as a category in statistics is indicative in this respect.

This underrating and non-understanding of the role of tourism have resulted in the current disproportions in Bulgarian tourism.

Tourism in Bulgaria has and is developing along mono-structural lines.

According to the Ministry of Economy, about 65% to 70% of the available accommodation is on the Bulgarian Black Sea coast, around 10%, in mountain resorts, and a mere 20%, inland.

Bulgarian tourism is characterised by distinct seasonal and territorial concentration.

Border statistics indicate that approximately 70% of tourists visit this country in summer, for a holiday at the seaside. The figures on foreign-currency earnings are similar, with around 40% of annual revenues coming in July and August, the National Bank of Bulgaria reports.

Such a development of tourism is not proportionate to the country's natural, historical and cultural assets.

Those disproportions in the development of tourism also account for the limited foreign investments in the industry. Real foreign investments in Bulgarian tourism since 1992 have amounted to just US$ 137 million, and "greenfield" investments, to a mere US$ 43 million.

Bulgaria: A Modern and Developed Tourist Country!

This is the purpose of the present Bulgarian Government.

A purpose which we have set ourselves after taking into account the country's rich tourist resources, expertise and, last but not least, regional and global markets trends.

Let us first consider Bulgaria's assets in brief:

Natural resources:

Around 5% of the country's territory is "protected" - there are three national and nine natural parks, numerous reserves, natural landmarks and visitors' centres.

Bulgaria is one of Europe's countries with the greatest plant and animal diversity: 94 species of mammals, 383 species of birds, 36 of reptiles, 16 of amphibians, 207 of Black Sea and freshwater fish, around 27,000 of insects and other invertebrates, from 3,500 to 3,750 of vascular plants, and more than 6,500 avascular plants and fungi.

The Pirin National Park and Lake Sreburna, a biosphere reserve, are on the UNESCO World Heritage List. A total of 37,000 km are marked as mountain tracks and "eco-tracks" - tracks in inaccessible and scenic highland and mountain areas with bridges, railing, ladders and other facilities ensuring the safety of tourists.

More than one-third of the countryside is mountainous. Bulgaria has a striking topographic variety and a favourable climate.

Cultural and historical heritage:

More than 40,000 sites are registered as monuments of culture from different historical ages, and there are 36 heritage parks, more than 300 museums and art galleries, and seven sites on the UNESCO World Heritage List. Bulgaria has an impressive Thracian heritage - magnificent Thracian tombs that have yielded some invaluable finds. Archaeologists are continuing to make sensational discoveries from that age.

More than 160 Eastern Orthodox monasteries and places of worship of other religions dot the scenic landscape. There are opportunities for demonstrations, hobby courses, demonstration of customs, etc.

In addition, the country boasts a rich cultural calendar that includes prestigious international and numerous local festivals.

Last but not least, Bulgaria is renowned for its folklore and lifestyle, with heritage parks in an attractive environment, preserved folklore, customs and crafts, traditional cuisine and hospitality. The atmosphere of the traditional Bulgarian village can be felt in Zheravna, Brushlyan, Kovachevitsa, Leshten, Dolen, Momchilovtsi, Shiroka Luka, Ribaritsa, Bozhentsi, Arbanassi and elsewhere.

These places offer homegrown organic farm products - fruit and vegetables, home-made cheese, fruit preserves, jams and yoghurt. Visitors can discover the secrets of Bulgarian cuisine, sample typical Bulgarian wine, observe local family and religious feasts, and local arts and crafts: woodworking, woodcarving, textiles, pottery, smithery, etc.

Hydrotherapy:

There are more than 550 sites with 1,600 mineral springs and curative mud deposits, with a total capacity of 4,900 l/sec. The hot mineral springs vary greatly by chemical composition. The country has 56 spas, the majority of them inland and on the Black Sea coast. There are also unique areas with a climate ideal for thalassotherapy, such as Sandanski and Vlas, etc.

There is a lot more to say about Bulgaria's rich tourist potential, but that is not the purpose of this presentation.

Yet what part of this enormous national potential is used to develop tourism?
Frankly speaking, only a fraction!


Bulgaria is known mainly as a destination of seaside recreational tourism, which accounts for 70% of Bulgarian tourism.

Notably, however, even this type of tourism utilises only part of the country's potential for development - mainly beaches and areas in and around the large coastal resorts, towns and villages.

Fortunately, many-kilometre-long beach strips and dozens of hectares, especially on the Southern Black Sea coast, are free for the development of tourism. To those insufficiently utilised resources we should also add the mineral springs, which are suitable for combining thalassotherapy and hydrotherapy on the coast, and an extension of the tourist season. Plus excellent opportunities for yachting, surfing, water-skiing, diving, harpooning and other aquatic sports, various forms of entertainment, photo and ecotourism, and so on and so forth.

Mountain tourism is concentrated mainly in Pamporovo, Borovets, Bansko and Aleko, which are developing foremost as centres of winter skiing tourism, which makes up 10% of Bulgarian tourism.

The cited figure on the proportion of the other types of tourism is indicative - an aggregate 20%, including:

» Ecotourism and rural tourism, which are still in embryo;

» Health (hydrotherapy) tourism, in which apart from the high-grade hotels on the Black Sea coast, a competitive product is offered only by several hotels inland - the Sandanski and the Hissarya;

» Cultural tourism - only monastery tours and several other tours are popular.

All this confirms the above conclusion about the monostructural development of Bulgarian tourism - at that, with marked seasonal and territorial concentration.

In this connection, this Government's policy on turning Bulgaria into a modern and developed tourist country aims, on one hand, to create prerequisites for surmounting those disproportions by diversifying the national tourist product. On the other, to boost quality as a basis of the competitiveness of the Bulgarian tourist product.

Several main accents can be identified in the Government's Programme in this respect:

Legislative programme:

First and foremost, passage of a new Tourism Act.

Bulgaria already has a Law on Tourism.

But we have moved a new law.

Why?

The effective Act was drafted and adopted when state property prevailed - more than 65% of the assets in tourism were state-owned in 1997. At present, 95% are private.

In 1997, Euro-integration was above all a political idea - a purpose on which national consensus was reached. Today, Euro-integration is a practice in both public administration and the activities of tourism companies. Suffice it to mention a single fact: the introduction of the euro.

This new situation in the industry requires a radical change in the philosophy of the Law on Tourism. From a law regulating the role of the State as manager of property, the new law aims to formulate the tasks of the State as an institution regulating the development of business in the conditions of private ownership.

The new Tourism Bill has been moved to Parliament and tomorrow, January 11, we expect it to be debated on first reading.

This Bill is designed to:

» clearly define the industry, i.e. the entire diversity of tourism-related activities - hotel and restaurant management, tour operation and agency, as well as ancillary services such as cultural services, entertainment, hydrotherapy, sports and other services;

» define the tasks and responsibilities of the central and local administration, proceeding from the principle of decentralisation of government and of greater responsibility and motivation of regional and local authorities in developing tourism;

» formulate direct and indirect levers encouraging the development of tourism at the national and regional level, which should be included annually in the National Budget Act, and which should be in harmony with the tourism development strategy - a tourism tax;

» set clear rules for quality management in tourism, i.e. quality requirements and criteria that correspond to the European standards - the Package Travel Directive and an integral hotel quality information system - of hotels and restaurants, as well as of other tourism activities, tour operation included;

» integrate branch organisations into the development of tourism, including the overall process of quality management - from licensing to control, as well as intra-branch regulation of tourist supply, inclusive of the issues of pricing and fair competition;

» establish a new body managing and conducting national promotion, which will take promotion out of the narrow administrative framework and place it on a broad public basis;

» create a specialised body controlling the quality of tourist supply and services.

We are aware that this new Act will be transitional in the process of Bulgaria's accession to the European Union. In the period in which it is in force, the country should resolve a number of problems related to enhancing the quality of the national tourist product and adjusting Bulgarian tourism to the conditions of strong competition on the European and global market.

In this connection, the second most important task is the elaboration of a national strategy on tourism development - the so-called Charter of Bulgarian Tourism, discussed and approved by Bulgaria's supreme legislative body, the National Assembly. The Charter must:

» outline the further separation of powers between central, regional and local government and branch organisations in encouraging tourism development;

» define the geography of the future development of tourism in the country for the purpose of fuller use of Bulgaria's rich natural, cultural, historical and other resources, especially inland;

» provide for the elaboration of standards for the construction of specialised infra- and super-structure, harmonised with the standards of natural and cultural environmental protection, as main criteria in the formation and development of tourist regions, zones and centres;

» define a policy on modernisation of the tourism industry through:

- development of investments, i.e. of an overall - legal, banking, etc. - system encouraging investments in tourism and, in particular, supporting small and medium-sized business;

- upgrading of skill levels and modernisation of management of tourism companies;

» provide for the elaboration of a system of criteria and standards for personnel training and assessment, especially of non-executive staff, and respective amendments to the labour legislation according to the specificity of work in tourism;

» propose a general national information and promotion strategy, including a concept of the development of a national information and booking system.

This is our legislative programme in the sphere of tourism in the next ten to twelve months. Our purpose is to create a legal framework, i.e. to set the rules in the travel business.

Apart from the Government's legislative actions designed to "open Bulgaria to tourism," the Government Programme on turning Bulgaria into a modern and developed tourist country provides for a national policy aimed at:

» improving the overall business climate in the country, which I will believe will be discussed in greater detail by Ms. Kachakova;

» developing the overall infrastructure, one of the priorities in the Government Programme as a whole. EU pre-accession funds such as Phare and ISPA, World Bank and other funds will also be used for the purpose. I believe I do not need to dwell on the impact of the construction of the trans-European corridors on the development of tourism - the Transport Programme;

» increasing security - one of the main factors which, especially after September 11, is of crucial importance for the attractiveness of a given tourist destination. The Bulgarian Government's measures in this respect are many-sided - combat of crime, greater efficiency of border control, opening of new border checkpoints and improving the quality of service there, etc.

Finally, I would like to note that the overall activities of the Bulgarian Government - both in particular, regarding decentralisation of the management of tourism and diversification of the national tourist product, and in general, i.e. achieving economic growth and prosperity - are aimed at achieving our general purpose: to turn Bulgaria into a modern and developed tourist country, thus making sure that WTO forecasts for 10.6 million tourists in 2020 will come true.