What does the Tourism sector mean for Bulgaria?
Being one of the leading sectors of the economy, tourism is run by the Ministry of Economy. The data for the year 2001 show that tourism is the number one sector in terms of exports. According to the information from the Bulgarian National Bank the revenues for 2001 are expected to be 1.25 billion USD, which actually comprises approximately 50% of the total export of services from Bulgaria and more than 12% of Bulgaria's entire export of products and services. 2001 is a year to be remembered due to the fact that the tourism sector achieved the largest export volumes compared to the other sectors of the economy. The last few years may be featured with the considerable growth rate of tourism. My colleagues from the Analytical Department made me realize that we were ranked on the fifth place in the world in terms of growth rate in the sector. Logically, one can wonder, what was this due to? One of the factors for this was the tourism resource that Bulgaria naturally has and that determines the development of the sector. What I consider as the fundamental element for the development of the sector is the shift of property, from state-owned to private tenure. At present 96% of the ownership in the sector is private. So we may actually consider it as a properly functioning private sector, as an independent sector of the national economy.
96% of the sector is in private hands. Do you think there is anything else worth selling?
Certainly, there are still things to be sold out and privatized. These are the companies managing the big seaside resorts such as Sunny Beach, St. Konstantin and Elena, and some smaller hotels. I think that by the end of the current year 99.9% of the sector will be private. I am leaving 0.1% in reserve!
And after the privatization, how do you foresee the government's role in this sector?
We have already started the process of changing the role of the state in the tourism sector. One of the evidences proving this is the National Tourism Law that is being passed in Parliament. The entire philosophy of the role of the state is being changed. The current law was developed and introduced in the times of state ownership where the role of the state was to manage the state property. The state has to be an institution regulating the business in the sector. The regulation functions will be performed with the help of three main instruments. First, quality management is a very important issue in the tourism sector. You know that competition in the tourism sector has shifted from "price-oriented" to "quality-oriented". The main ratio determining the demand is the quality-price ratio. So, the state has to achieve the objective of becoming more internationally competitive by improving the quality of the services in this sector. The second instrument of regulation is the involvement of public structures in the management. The practices in well-developed countries in terms of tourism show that this is one of the guarantees for rapid and stable development of the tourism sector. The third instrument is decentralizing the management, which is delegation of rights and responsibilities on a regional level. The practices in Austria, France and other countries show that it is extremely important to have the local and regional institutions motivated to better develop tourism in their regions. Last but not least are the financial incentives. In the current law, the responsibility of the state for direct subsidizing of national advertising from the state budget is explicitly stated. These are the main guidelines. So there will be a lot of tasks to be accomplished.
How did the September 11th events affected tourism in Bulgaria?
We closely kept track of the reactions after September 11th, because, the Bulgarian tourism is "tourism on wings". Fortunately our major markets, i.e. the EU, did not register considerable withdrawal in the tourism services. There are several objective factors that determined this positive development of the processes, or at least it wasn't negative. First, this is the policy that we follow as a peaceful country on the Balkan Peninsula. The Europeans witnessed that regardless of some conflicts in the region; we managed to maintain political peace and serenity. In the meantime we strengthened our relationship with Greece and Turkey. One of the key factors that lead to preventing withdrawal in the tourism sector after September 11th was the perception that our customers had of our country as a politically peaceful environment. I would draw your attention to the fact that the ethnical model in Bulgaria can serve as a model for the other countries. Frankly speaking, if we go back some fifteen years ago, probably in Bulgaria existed some prerequisites for such crises or such similar events but the ethnical model in Bulgaria proved that various ethnical groups could peacefully live together in a small country. The second factor is that Bulgaria is in the reach out of two and a half hours flight. Since our major market is the EU, the fact that the Europeans preferred to stay here in Europe instead of flying overseas also lead to a certain positive impact on the sector. Certainly there is some negative influence as well. For instance, after Sept. 11th there was a sharp decrease in the flights from Japan to Bulgaria. There was an overall decrease in the overseas flights or long-distance flights. This strongly affected the big city hotels. The decrease in the business of the big hotels in the cities reached over 30% right after those events. I would like to mention that the conference on tourism held here last week would be a factor to help overcome some negative effects from those events.
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In that conference Mr. Miller, former Governor of Nevada, said: "The success of the development of the sector depends on two main factors: Infrastructure and Marketing". Do you agree with that statement?
I absolutely stand for these two main factors considered by Mr. Miller as key factors. The overall strategy and policy of the state is to give considerable priority to infrastructure development. Here we have to mention that all trans-European corridors cross Bulgaria and that all this will certainly contribute to the development of the infrastructure. And with our new law, we are striving to better develop the national and local infrastructure. As far as marketing is concerned, we are at present developing a national document on tourism "the Tourism Chart" that will outline the strategy of the state for the development of tourism. With this strategy we would like to diversify the products and services in the tourism sector in order to overcome this mono-structure that currently exists. As you know, at present, 70% of the Bulgarian tourism is concentrated at the seaside. This mono-structure actually leads to high season-concentration of tourism.
What is the degree of resources utilized?
When speaking about the degree of utilization of the resources available, only 60% of those at the seaside are used; not more than 10% of the resources in mountain tourism are used, and in the spa-tourism, not more than 3% or 4% out of 1,600 of the thermal water resources are utilized. Let alone the potential of the so-called culture tourism, eco-tourism and the countryside tourism, which will only now be introduced and developed. So the diversification policy of the state is, to be precise, the key element of the marketing we were talking about. The other elements of the marketing-mix are closely related to this product diversification. In this context, one of the main objectives is to change the image of Bulgaria in terms of tourism. For many years, the image and international perception of Bulgaria has been associated with the Black Sea and the splendid beaches. There are several scientific teams that facilitate us in the achievement of this.
Considering your background in the Marketing Department of the State Committee of Tourism, would you like to be involved in that national campaign for national promotion?
My first occupation in the tourism sector was as expert in marketing and situation of tourism markets. Afterwards I taught marketing. I graduated as correspondent student from the Mexican Institute, which is the institute of the World Organization of Tourism and Marketing of Tourism. However, many of my colleagues of mine, as well as myself, are involved in the development of this marketing strategy. By using these marketing tools, we must first have to tell the world something more and something better about Bulgaria. Second, by changing and improving Bulgaria's image we would help the tourism sector to become a better-developed sector. Here I would like to make an equivalent association. In the 80's, when in Europe the unified tourism market was being formed, one of the objectives of the EU was to overcome and break out of the mono-structure in the tourism sector and to overcome the season or territorial-oriented concentration of tourism. So as you can see we are facing now the same problems. One of the ways of solving those problems was the diversification of products and services into country tourism, culture tourism, etc. So we are not reinventing the wheel, we are just using the experience of other countries regarding the tourism sector. Going back to the image of Bulgaria, I would like to emphasize on the aid that we receive from the British Council. They are presently financing a team working in that direction. I have to mention the EU PHARE programmes in the field of culture and country tourism. I hope this year we will be able to finalize the negotiations in the field of spa-tourism. So the Ministry, as a state institution, is trying to coordinate all these efforts in order to achieve the goal we are targeting.
As compared to neighboring countries like Greece or Turkey, for example, what does Bulgaria have that distinguishes it and makes the difference?
There are plenty of things that distinguish Bulgaria from the other neighboring countries. In some segments of the market our neighbors are competitors, for instance in terms of the seaside tourism. But, here I have to mention that we have a consensus in terms of our inter-relations, not only at governmental level but also at a business level. We are trying to use the heritage of the Balkans for our mutual benefit. Both at governmental and business levels, we are now considering to launch a tour in the Orthodox heritage since Greece, Bulgaria and Romania are orthodox countries. Many of the monuments and memorials of the orthodox culture are located in Turkey. This is just an example of the integration of the potential of the Balkan countries that would later on be able to come on the market with a common product. This is one of my ideas shared by my colleagues from Greece, Romania, Turkey and the other neighboring countries, and I hope that within the current year we will have a Forum of the Balkan countries on tourism issues. Since Bulgaria is the Center of the Balkans and since we initiated this forum, we could be the hosting country of such an event. Of course, this policy in the tourism sector that we are trying to introduce is in harmony with the entire policy and strategy of the country. A major slogan for tourism is that "tourism is a mean for nations and civilizations to meet" or "tourism - passport of peace". In harmony with the overall policy of peacemaking in this region, tourism actually contributes to the integration of people and nations. Beyond the Atlantic, tourism is making the people aware of the situation in the Balkans. Of course, this policy also has its benefits in terms of business
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