Private Enterpreneurs: Backbone of Bulgarian Tourism
Walter Leu Chief Executive, European Travel Commission

In the "Business of Travel" section of the "Financial Times" I read the sentence: "All over the world it seems travel agents, fearing extinction, are protesting against change.... too much. Some people in the travel industry believe they should be getting on instead with the task of redefining them-themselves". It is part of man's inherent nature that he is reluctant to abandon his comfortable habits, and that external pressures for change cause him anxiety. Anxiety however leads to confusion and to false reactions at the wrong time and with the wrong means. Let us not forget that of the 500 largest companies in the world listed in the year 1930 in the FORTUNE Magazine, only just over 40 are still in existence today. I wonder how many disappeared because they resisted change?

What has just been said about travel agents can be taken as representative of many industrial and commercial sectors, and certainly for many tourism administrations throughout the world. What has been their undoing is not s much the need for new partnership dimensions and the corresponding political and organizational restructuring, as the speed of action that circumstances have required. Public bodies are by their nature and by reason of a multiciply of cultural and historical consideration ill-adapted to quick decision making. Then there is in addition the "dictatorship" of the present communications society, lo which politics must pay attention. Its judgement is based less on the quality of change but the element of time; events must occur quality and with shock effect: successes are acclaimed to the skies, and failures are pushed aside by new demands for further restructuring. At present tourism administrations are subjected at all levels to constant pressure. At the political level there is a demand for the private sector to take an increased financial participation in destination marketing and for greater focus on core tasks - what are they anyway? - whilst the private sector insists on quicker and quantifiable output. This leads to

............. a latent crisis of identity

for many public and semi-public Tourist Boards. I shall attempt in what follows to shed light on the role of these organisations historically up to the present time. I must however point out that my comments refer in particular to the development of tourism promotion in the so-called "traditional" tourist countries. Here the process of the participation of the public sector occurred from the bottom-up. that is to say that originally, some 125 years ago, tourist offices were established at the local level, and that subsequently they attempted to establish a network by creating regional tourist boards. As competition sharpened increasingly to become a battle between countries as travel destinations, governments recognized that there had to be a national marketing strategy and coordination, Thus after the Second World War the organisation of destination promotion supported by the public sector mainly developed top-down.

It is quite feasible to regard tourism as a kind of theatrical performance, directed by National Tourist Authorities

that is played out on a stage called "Destination", but in a relationship between host and visitor that pays regard to human dignity, since it is not the role of the.
host to play the part of the "dancing bear" for the benefit of tourists. Nevertheless the ^question must be asked: will NTOs in the 21st century still be efficient enough, appropriately recognised by the industry and sustained by governments to be able to fulfil their task? With regard to sustainability, will they have the courage to move on from lip-service declarations to confront the moment of truth for tourism?

If we wish to achieve the strategic goals of sustainability, we must first define the role of the relevant indicators that must be found at the economic, social and environmental levels. As time passes, the careful and wise use of the natural environment is becoming more and more the key factor for the survival of tourism.
In the 21st century we who work in tourism must find our way back to a policy of "Qualitative Growth" such as was first outlined in the 1980s. This means that we must once again recognise that the capital assets of tourism consist of elements that are easily destroyed, namely our human capital, our culture, nature and the environment. We must learn to use these assets - but not to use them up. It must be a strategic objective to live on the interest from tourism but not to consume the capital. Tourism can only create long-term employment if the environment is tolerable for the local inhabitant and the visitor alike. Who else than the NTOs can dare to play the role of "devil's advocate"? Sustainability is a long-term concept, which creates added value by the law of the optimisation and not the maximisation of income, that is to say. it does not want the hen to lay the eggs and at the same time to be served up on a plate as "poulet roti"! A destination's volume share of world tourism is not so important as its share of the worldwide potential of good and cultivated visitors who realise that a good product cannot be acquired at a dumping price. Mass tourism has been described as "the occupation of a country by an unarmed army for a limited period". This is the image of tourism that we must combat: quality of offer and quality of demand must be the tourism for which we strive in out new century.

The 21st century and the development of a new tourism ethos - with the NTOs as its messengers

"Tourism is not one but all industries". This quotation indicates not only tourism's high multiplication factor but also that tourism is the substratum of many policies - economic, regional, social and cultural. Not everything that seems profitable to the individual businessman is desirable for the national economy. Shareholder value taken to the extreme is poison for the social contract and is the cultivation of mere egoism. What does this mean in relation to tourism? The globalisation of the economy is a reality, and this calls for a global framework of order based on a globalisation of ethics.

Obviously I don't want a flood of regulations that just exchange one evil for another. But whatever is desirable in supporting the fundamental pillars of the state and the economy must to an even greater degree be valid for tourism. Tourism is in fact an emanation of culture and one of its vehicles of transmission, I link a new ethos for world tourism to the following hopes in the form of a realistic vision:

» The relationship between supplier and consumer must change to a partnership with parallel interests. In this way it will be possible to arouse support on both sides for genuine sustainability and to convert . exaggerated hedonism into a rational pleasure in consumption. The interests of shareholder and stakeholder must not conflict, but must be complementary.
»Tourism should not only talk of visitor's rights, but also of their duties. Friendliness is not just something to be expected from the host. Visitors too should show more respect for other people, other cultures, and other identities.
»Development policies for tourism must be discussed from the start with the local population, so that they too support them. The representatives of hospitality are not just the professionals, but the whole population. This will avoid tourism becoming a ghetto culture.
»The social standing and the conditions of employment of the workers in the tourist industry must be improved.
»The necessary improvement in the ethics of tourism in the 21st century will unavoidably result in a competition of ideas. Concept marketing will become more important than product marketing.

and what about the future of the National Tourist Boards

Soon after the first NTOs were established more than 80 years ago, sceptics were already questioning their chances of survival. An NTO must face up to the constant challenge as to whether its usefulness to society, the state and the economy justifies its existence. This is all the more so since the budgets of NTOs - in Europe for example - are still financed to between 50 and 100% by the taxpayer. So the question of their future can only be answered in the general context of political interests.

From the beginning and until very recently the mandate to many NTOs was approximately as follows:
Phase 1: to promote a general awareness of its own country, of its
historical and cultural strengths and the beauties of its landscape etc with the object of creating a general climate of sympathy. This also led to noncommercial collaboration with groups within the export economy who were similarly interested in an active presence in the markets - which was a first if unconscious, step forward destination marketing.
Phase 2: to arouse tourist interest. Phase 1 was only a first stop towards the objective of arousing a concrete interest in travel, to convert the "friendly" country into a target destination for tourists.
Phase 3: to make the potential visitor decide to convert his or her wish into reality. Customers were brought to this point by sales promotion and targeted information.
Phase 4: the task of the NTO ended with phase 3: Reservation and Sales were in principle left to the industry.
It was also thought that this procedural concept provided a clear division of financial responsibility: phases 1 and 2 were to be financed out of public funds, phase 3 was to be financed jointly from public arid private sources, and finally phase 4 was the responsibility of the industry.

Today we are confronted by new parameters without there being a final and reliable new model for action. NTOs are increasingly searching for a new definition of their task and their identity: they vacillate between the demands of the public sector for strategic return on investment and the private sector's requirement of immediate operating profit.

As already mentioned, the share of the public sector in the financing of NTOs is substantial and without this funding they could not exist under contemporary conditions. Their continued existence is however dependent on future state economic policy and the further separation between tasks that will continue within the public domain and those that are to be (eft to the private sector. This is a dynamic process that is far from being complete, whereas the arguments involved are in part ideological. Many governments are still not sure whether it is sensible or necessary to pursue a strategic policy for tourism in order to optimise the exportation of economic growth potential. If it is, national tourism concepts are essential. Nor can you do without them in countries where the creation of tourist demand is a means to develop economically disadvantaged regions - few private investors would be prepared to invest money in social and regional policy.
The reality of the development of relationships between the public and private sector.

Since 1980, the pressure of public authorities at all administrative levels o national, regional, and local, - has grown on their Tourist Boards to increase the contributions made by private beneficiaries. In some cases public subsidies were made directly dependent on private contributions, e.g., a public dollar for every private dollar. In other places, the tourism administrations have deliberately taken on commercial activities, such as billing their private and public partners for the services they have supplied to advertising and PR campaigns. New laws have been passed creating residential taxes or increasing those already in existence. Particular activities have been detached and privatised, and much more. These changes have however one thing in common: they were nearly all made in response to external pressure, and seldom as a spontaneous initiative.

So what were the concrete results of all these efforts? Certainly, in many cases there was a real increase in the budgets of public tourist administrations. But in many cases also the income achieved was linked to a disproportionately high cost:
» In order to reduce the share of public subsidies .in the overall
budget, certain NTOs had recourse to "tricks". Instead of calling the state subsidy by its proper name, they invoiced the government for "Services rendered in the public interest" and accounted for the payment as "Earned Income". -
» The financial contributions from the tourist industry have not increased significantly and in fact remain very modest in absolute terms. There is a lack both of will and available funds, and the industry's attitude is often illogical: on the one hand it complains of the tax burden on tourism, and in the same breath it demands increased state support for destination marketing at all levels.
» Some NTOs and regional tourist boards have been able in the past to rely on financial support from large businesses (banks, insurance companies, food manufacturers etc) in connection with image-building PR activities. As such "big players" become progressively internationalised and globalised they are increasingly reluctant to be identified with their country of origin and are consequently less interested in joint ventures with tourism boards.

The limits of feasibility

These and other difficulties clearly indicate that on the one hand it is not easy to draw the line between public and private players, whilst on the other hand pressure from the authorities on tourist administrations at all levels makes their taking action more difficult. The will to adapt to changed market and political conditions is certainly there, but the implementation creates enormous problems. One thing is certain: public and semi-public tourism boards continue to. be in a state of great uncertainty and experimentation.

Investors expect strategies targeted on results

There is little difficulty in quantifying the activity of the tourism board carried out for the benefit of the private stakeholder so that it can serve as the basis of its financial performance. However it becomes difficult if the state gives an NTO a concrete performance contract with the requirement that the state subsidy be justified by a concrete and calculable return on investment. How can efforts to improve an image or to create a brand name, or to generate sympathy for a destination, be expressed in figures? These are all the basic activities that make economically directed marketing subsequently possible. It is clear to everyone that it would be senseless to make the financing of basic research at universities dependent on immediate economic results.

The same criterion however is also valid for destination marketing carried out by tourist Boards. Their position is made all the more difficult because the ethical_bases of tourism are affected by the widespread obsession with shareholder value, Where however there is no understanding for long-term interests, where strategic thinking is replaced by day-to-day hectic tactical manoeuvring, there can be no true sustainability.

Congruence of public and private stakeholders' interests, especially at local level

One of humanity's unfortunate characteristics is that we far too often stubbornly persist in "agreements to disagree", on which we expend a great deal of effort. It would be much more profitable to concentrate our strength on those basic matters on which we agree. In the relationship between public and semi-public tourist boards at local, regional and national levels and the sectors of the private economy there are enough platforms where interests can combine. The fallowing procedure is significant:
Strategy 1: Networking
All the top service providers who give a destination its character and represent it directly or indirectly are gathered together as an umbrella organisation in an advisory board and an action board:
* political authorities
* Educational representatives (all levels)
* Inhabitants' representatives
* Hotels and Restaurants
* Travel Associations
* Local and/or regional Trade Associations
* Shop owners
* Cultural representatives
* Environmental representatives ("Greens")
* Public and private transport
* Representatives of agriculture (especially at regional level for the
promotion of rural tourism)
* Events, meetings and conventions organisers
Strategy 2: establishing responsibilities/definition of the hierarchy: who does what in destination marketing?
Strategy 3: determining the targets and the instruments needed

TARGET
* Image, awareness
* Overnight tourism
* Daytime visitors .
* Rural tourism
* Events, theatrical and concert performances
* internal PR: authorities, inhabitants

INSTRUMENT
Public relations, exhibitions Destination marketing Event marketing Rural food festivals
Local tourist board as reservation, booking and ticket sales office
Media, open days etc
Strategy 4: Definition of target groups and the geographical priority markets
Options for structuring local, regional and national Tourist Boards
The following are naturally only theoretical models which require thinking through much more deeply.

Interaction between the public and the private sector

will be badly needed to achieve a strategic Unique Differentiation Position (LJDP) in order to strengthen location competivity. Competition between countries, regions and cities will become much tougher in this area. Conceptual destination marketing will therefore have a much greater significance than in the past. It implies the summation of at! the characteristics that give a location or region a positive profile; culture, political stability, the economy, natural beauty, the local people's friendly and hospitable attitude, education, but also such unquantifiable aspects as reputation, image, sympathy, reliability etc, It goes without saying that a destination is much better positioned and the creation of a brand image is by far easier if the private and the public stakeholder are together creating a kind of Tourism Incorporated.

The criteria cited here to justify - indeed to demonstrate the necessity of -the Public Tourism Offices' (PTOs1) existence, are similarly valid for the effectiveness of a supra-national body such as the European Travel Commission (ETC), which must fulfil an umbrella function for Destination Europe as a whole.

If we agree that tourism:
* is part of national and regional and local planning,
* is often the only effective instrument for the economic improvement of disadvantaged regions,
* is a strategic linking element within national economic policy,
* is a factor for job creation par excellence, particularly for young people, in an environment of high rates of unemployment,
* is an excellent image builder and sympathy-promoter for a country', unparalleled by any other industrial sector,
* is a conduit for cultural exchange between one country and another,
* smoothes the path for the entire export economy -
then there should be no dispute that in the next century PTOs will not just play the part of the Sleeping Beauty and the stop-gap, but will take a leading role in tourist strategy. The public sector will certainly not be able to abandon its role as principal shareholder and stakeholder.

Nevertheless, shareholders lose interest in their company when it fails to yield a return on investment. For this reason the pressure on PTOs to reposition themselves is increasing and governments will subject them to a permanent fitness programme. In the age of globalisation, tourism finds itself in a situation of hyper-competition. Not too long ago, both the number of destination countries and the number of people who could afford holidays and travel were small. Today every country on earth is a national destination and in the year 2001 more than 700 mio international
arrivals are expected. Such a growth in scope and bulk makes it increasingly difficult for the customer to keep his head above water and to choose sensibly. Modern information technology is a help, but it too could well drown itself in the flood of information. The PTOs are challenged to take on a new leadership role in an environment of innovatory and creative marketing methods - in this New Information Technology Ago they must act as information brokers and contribute to the sifting of information that shows customers the way to go from the trash that bewilders and blinds them. We have to overcome the fact that tourists are "overnewsed" but under Informed.

To fulfil this mission PTOs will have to get even closer to the market. Close collaboration with the private sector is a must, but always, with the backing of the public sector so that they do not become completely dependent and lose their ability to act at the strategic eve!. PTOs must become particularly professional in providing more effective support to SMEs (small and medium-sized enterprises), since in Europe, for example, some 80% of tourist turnover is earned in small and medium-sized businesses, who also account for more than 85% of all jobs.

The 21st century PTO will be an organisation operating in the public interest but run as a business. Through closeness to and knowledge of the market, it will achieve quantifiable results by retaining old customers and attracting new ones. Its marketing must become more selective, because it is not just the tourist statistics that count, but the effect of tourism on the profitability of the economy as a whole.

The successful supplier is not satisfied by statistical growth only, but rather by the increase in the number of satisfied customers and by adequate added value return from each overnight stay. I do believe that PTOs must undergo a sort of permanent revolutionary evolution if they are to remain as a viable think-tank observing the rule of the three big Cs; Continuity, Coherence and Consistency.