Just How Close?

Economic News

22 Jul 2010
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Bulgaria is looking to build on its solid record as a destination for overseas tourists, stepping up its campaign to promote the country while at the same time working to improve both the sector's infrastructure and organisation.



In 2005 Bulgaria recorded a 13% increase in the number of foreign arrivals, with the first quarter of 2006 continuing the strong trend with 193,000 foreign tourists entering the country. Many of them were drawn by Bulgaria's winter resorts and the low cost of enjoying the season's sports compared to similar facilities in the rest of Europe.



However, while good, the Bulgarian tourism industry wants to do better. Ahead of the opening of the World Cup finals in Germany, the Bulgarian Tourism Agency launched a promotion campaign in Berlin. Based on the slogan "Closer than you think", the advertisements are both an inducement to visit Bulgaria and a reflection of the country's view on its progress towards membership of the EU. In turn, the "Closer than you think" campaign is part of a wider promotion, entitled "Europe wins with Bulgaria", that aims to attract investors, visitors and support for its EU accession bid.



In early June, many of the industry's leading players formed the Bulgarian Tourist Industry Union, in part to promote the sector at home and abroad. One of the first acts of the union's newly elected president, Petya Slavova, was to call on the state to allocate more funding to promote the country as a tourism destination. Given the limited funds available, to date Bulgaria's promotional campaigns have been of a small scale compared to rivals such as Romania and Turkey, but the profile is rising.



One incentive for Bulgaria to upgrade its hospitality industry is the country's bid to stage the 2014 Winter Olympics. Both the state and private sector have stepped up efforts to promote Bulgaria as a creditable candidate, both by accelerating the construction of new accommodation facilities and by upgrading the registry of existing hotels.



Mario Al Djeburi, president of the National Tourist Agency for Bulgaria, announced in late May that a thorough survey of accommodation in the three regions that would host events should Bulgaria win the rights to stage the games found far more hotel rooms than previously thought.



"We have undertaken a review of the hotel and apartment inventory to ensure that the statistics now reflect the rapid pace of hotel and apartment development throughout Sofia and in our two major winter tourist destinations," he said in an interview with the Bulgarian press.



The total of more than 36,000 rooms was far higher than the figure submitted in Sofia's bid report to the Olympic committee and in part reflect the boom in tourism investment, Al Djeburi said.



Another boost for the industry was the results of an annual survey by the Thomas Cook International Tourism Agency, which came out at the end of May. It showed that for the third consecutive year, Bulgaria was the cheapest tourism destination in Europe and the fourth in the world, behind Goa, Brazil and Tunisia.



That said, the survey also underscored a problem for Bulgarian tourism, its image of being cheap, at the low end of the market, and a good place for a brief stay. While Bulgaria earned $36.17m from tourism in the first quarter of 2006, an increase of $5.06m over the same three months last year, most of this revenue - $22m - came from overnight or short-term stays by foreign visitors. Bulgarian National Bank analysts described the figures as disappointing as the increase was not enough to have a major impact on the country's burgeoning current account deficit. The figures would have also been disappointing to those in the industry, reflecting as they do the failure to attract long-term visitors and the higher end of the market.



The Bulgarian tourism sector has a number of other hurdles to overcome, not least of which is the lack of professional personnel to cater to the needs of visitors. With the rapid expansion of the industry, the demand for trained staff has increased, though this has not always been matched by financial incentives or courses to either retain existing personnel or to bring on new entries into the tourism labour market.



According to Marin Neshkov, the chairman of the Chamber of Tourism in the Black Sea city of Varna, the failure to ensure adequate staffing will hit tourism hard this season.



"There will be lack of staff in many fields of the tourist industry this summer," Neshkov said during a radio interview in early June. "Unfortunately Bulgarian investors don't allot funds for staff, they only build. And this is why experienced personnel go abroad."



Another issue that has long blighted the Bulgarian tourism sector is poor regulation of hotel construction and disruption to resort areas by work being carried out during the height of the season. However, in mid-May the authorities stepped in to try and curb building activity in holiday regions.



Just ahead of the formal opening of the tourism season on May 23, a ban was placed on all construction work in resort areas, a move designed to limit disruption, along with new regulations limiting high rise developments and buildings encroaching on the coastal strip.



Bulgaria has long promoted its credentials as a holiday destination, one offering year-round activities. Now it is working to build on that potential.

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