Everything's Coming Up Tourists

Economic News

22 Jul 2010
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Bulgaria's tourism sector continues to grow rapidly despite a fall in visitors from its non-European Union (EU) neighbours and an unusually short ski season. The authorities are continuing to develop the growing opportunities in spa, cultural, adventure and ecological tourism, as worries persist that some coastal resorts have hit the limits of their expansion and sustainability. There is an ongoing struggle between those who see further opportunities for development and those who believe the country's long-term interest would be best served by fencing nature reserves.

In the run-up to the summer high season, Bulgaria's tourism revenues were already showing impressive growth. Revenues in the four months leading up to April rose 13.7% year-on-year to $464m, according to the State Agency for Tourism (SAT). However, SAT Chairman Anelia Krushkova pointed out that more Bulgarians travelled and spent more money ($536m) abroad than foreign visitors came to and spent in Bulgaria during the same time.

The absolute number of foreign visitors dropped 3.85% year-on-year in the first five months of this year to 1.2m. Krushkova attributed this to a sharp decrease in the number of visitors from Macedonia and Serbia - down 74% and 80% respectively - due to a tightening of the visa regime for visitors from outside the EU, implemented after Bulgaria joined the union in January. Despite this, the SAT expects an overall rise in the number of tourists by the end of the year. Last year, a total of 5.2m foreign visitors came to Bulgaria.

"The rise in tourist numbers in 2007 is expected to be at last year's level of some 6.4% to 7.0%. We have all the prerequisites to achieve it," Krushkova told the local press.

The SAT's strategy is to maintain Bulgaria's strength in mass-market tourism on the coast and in ski resorts and develop higher-revenue, more up-market tourism in areas where there is still tremendous potential. The 2006-2007 period has seen the agency concentrate on spa and wellness tourism, while 2007-2008 will see a focus on the promotion of cultural tourism. With millennia of history during which Thracians, Greeks, Romans, Byzantines, Bulgars and Ottomans have all played a part, strong and active folk traditions and beautiful cities and towns, Bulgaria has much to offer beyond sea and ski. Similarly, during 2008-2009, the SAT's focus will be on nature tourism, including adventure and ecotourism. Bulgaria's mountainous, forested landscape and well-developed if rudimentary system of hizhas (mountain huts and hostels) are well known to locals but relatively under-visited by foreigners.

Several factors are behind the new focus on these under-optimised tourism sectors. There are regions, long overlooked by tourists, which now see the opportunity to attract visitors. The markets in which Bulgaria has been a popular tourism destination are becoming increasingly affluent and people there are looking for more to their holidays than sea and sand. This is hoped to dovetail with an increase in the higher profits that can be had from cultural, spa and ecological tourism activities. Finally, there are concerns that further development of the coastal and mountain resorts would be unsustainable and spoil the very features visitors come to enjoy.

One of the biggest issues in the sector at the moment is the designation of some areas of the country as part of the EU's Natura 2000 network of protected regions. This has caused a conflict between environmentalists on one side and developers and some residents on the other. The government submitted the areas to be covered by Natura to the EU earlier in the year, controversially omitting areas such as Melnik, famous for its sandstone landscape and vineyards, and parts of the Black Sea coast considered environmentally sensitive but located close to resorts. Some people living in the areas had protested that Natura would stop them developing their land and reaping the benefits of Bulgaria's real estate and tourism booms.

In other cases, local people and municipal authorities have been pro-active in curtailing what they see as overdevelopment. For example, last week the municipality of Tsarevo, on the Black Sea coast, called for a two-year construction ban in the Strandzha natural reserve in the far south-east of the country, south of the city of Burgas. Local press reported that the municipality proposed a management plan for the park and a new delineation of its borders. The Supreme Administrative Court controversially abolished the area's status as a nature reserve last month, leading to widespread protests and a move by the Supreme Administrative Prosecutor's Office to reverse the ruling. A spokesman for the municipality said the court's ruling had encouraged development and land sell-offs. Tsarevo would be following in the footsteps of the municipality of Varna, where mayor Kiril Yordanov has indefinitely suspended further development.

Opportunities for investment in underexploited tourism niches are opening up, which should help change the mentality that tourism investment need only involve building another hotel on the coast or by a ski resort. Tourism is now Bulgaria's largest earner of foreign currency, generating around 10% of GDP, which was $26.6bn in 2005, and most expect it to go from strength to strength in the coming years.

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