Tourism Industry in the SEE

Dragana DjuricaRegional Cooperation Council

Sarajevo Business Forum15 May, 2014

Sarajevo

Integrated growth

deeper regional trade and investment linkages and

policies enhancing the flow of goods, investment, services

and persons

Smart growthcommitment to compete on

value added, promoting knowledge and innovation

across the board

Sustainable growth

enhancing competitiveness, entrepre-neurship and a

commitment to greener and more energy-efficient

development

Inclusive growthskills development,

employment creation and labour market participation by

all, including vulnerable groups and minorities

Governance for growth

improving the capacity of public administrations to

strengthen the rule of law and reduce corruption so as to create a business-friendly

environment

SEE 2020Vision

Five pillars of SEE 2020

Prioritization through sectors

Sectors of mutual regional importance selected withinthe SEE 2020 Framework

►Food and Beverages Processing

►Tourism

Prioritization through sectors

integrated

smart

sustainable

inclusive

governance

Prioritize removal of trade barriersLiberalize services (e.g. integrated logistics services) Incentivize investments and promotion at the global level of the given sector

Identify regional skills-gaps and skills mismatches within the sector with an objective to install mutual recognition arrangements for the given profession

Prioritize infrastructure investment geared towards supporting the value chain

Mutual recognition arrangements

Piloting alternative dispute resolution methods for the given sectors

EXAMPLE: FOOD PROCESSING AND BEVERAGE

SEE Tourism Expert Group

Government: Ministries of Economy/Tourism

National Tourism Boards Promotion Agencies Business Sector OECD, Regional Organizations

Main Challenges in the SEE Tourism

Human resources: education and training

Marketing, strategy and branding

Economy Ministry or department in charge of tourism

Budget of the ministry or department (year)

Albania Ministry of Urban Development and Tourism

EUR 12.7mn for the whole ministry (2010, budget of the former ministry)

Bosnia and Herzegovina

Croatia Ministry of Tourism EUR 31mn (2010) for the Ministry

Kosovo Ministry of Trade and Industry: Department of Tourism and Hotel

FYR Macedonia

Ministry of Economy: Tourism Department and the Agency for Promotion and Support of Tourism

EUR 1mn for the Tourism Department

Montenegro The Ministry of Sustainable Development and Tourism

EUR 11.9mn (2011) for the Ministry

Serbia Ministry of Economy and Regional Development- Sector for Tourism

EUR 44.2mn (2010) for tourism promotion and development

The governments of SEE have prioritized tourism

OECD (2012), OECD Tourism trends and policies, OECD, Paris.* This designation is without prejudice to positions on status, and is in line with UNSCR 1244 and the ICJ Opinion on theKosovo declaration of independence. Hereafter referred to as Kosovo.

7

Tourism contribution to the SEE economy

Source: UNTTC Tourism database8

HRV ALB MNE BIH SRB MKD0%

5%

10%

15%

20%

25%

30%

Travel and tourism share in GDP (% of GDP), 2013

Direct Contribution to GDP

SEE average- total con-tribution

HRV ALB MNE BIH SRB MKD0%

5%

10%

15%

20%

25%

30%

35%

Travel & tourism share in employment (% of employ-

ment), 2013

Direct Contribution to Employment Total Contribution to Employment

SEE average- total contribu-tion

6% of GDP in the SEE region

Source: UNTTC Tourism database

HRV ALB MNE BIH SRB MKD BGR ROU0%

2%

4%

6%

8%

10%

12%

14%

Contribution of travel and tourism sector to GDP (% of GDP), 2013

Direct Contribution to Employment SEE average

9

6% of employment in SEE

HRV MNE ALB BGR BIH ROU SRB MKD0%

2%

4%

6%

8%

10%

12%

14%

Contribution of travel and tourism sector to employment (% of employment), 2013

Direct Contribution to Employment SEE average

Source: UNTTC Tourism database10

Receipts from tourism fell as a result of the financial crisis and are slowly recovering

Source: World Bank Development Indicators 2014No data available for Kosovo

2006 2007 2008 2009 2010 20110

2000000000

4000000000

6000000000

8000000000

10000000000

12000000000Receipts from international tourism (current

USD)

ALB BIH HRV MNE SRB ROM BGR

11

Financial crisis

Strong seasonal demand fluctuations

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000Number of nights spent per month, 2012

BulgariaCroatiaRomaniaMontenegroSerbia

Demand for the number of nights spent is particularly high in the summer months for Croatia and Montenegro. Tourism in Serbia is less affected by seasonality.

Source: Eurostat12

Even though domestic arrivals account for 63% of the total, spending by domestic tourists only accounted for about 40% of total tourism spending in Serbia.

In Serbia, foreign visitors tend to spend more while traveling

Domestic tourism – vast share of the demand

International tourist arrivals (millions)

Domestic tourist arrivals (millions)

Croatia (2012) 10.4 5.6

FYR Macedonia (2012)

0.35 0.31

Serbia (2011) 0.76 1.3

Source: WTTC, “Serbia Travel and Tourism Development Potential 2011-2013” OECD (2014), OECD Tourism Trends and Policies 2014, OECD Publishing, Paris 1

3

International tourist arrivals are increasing

Source: World Development Indicators14

International tourists arrivals upward trend since the mid 1990’s

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

0

2,000

4,000

6,000

8,000

10,000

12,000

International tourist arrivals (thousands)

ALBANIA BOSNIA AND HERZEGOVINACROATIA MACEDONIA, FYRMONTENEGRO SERBIA

Source: WTTC Tourism database15

International tourists predominantly come from neighbouring countries

Share of international arrivals, 2010

  CountryShare of international arrivals; top 5 economies

Share of all neighbouring economies

Albania

Kosovo * 48.8%

75.2%FYR Macedonia * 11.4%Italy 5.2%Montenegro * 5.1%Greece * 4.7%

Croatia

Germany 16.7%

54.6%Italy 11.2%Slovenia * 11.2%Austria 8.9%Czech Republic 6.7%

FYR Macedonia

Greece * 10.2%

44.1%Turkey 7.7%Serbia * 13.7%Bulgaria * 5.9%Albania * 6.5%

Serbia

Slovenia 9.8%

37.1%Bosnia and Herzegovina * 9.3%Croatia * 6.8%Germany 6.3%Italy 5.0%

A * indicates that the country shares a border with the country visitedSource: OECD (2012), Tourism Trends and Policies 2012, OECD Publishing, Paris

16

Leisure travel spending has increased significantly in SEE, unlike business

travel

Source: WTTC Tourism database17

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

2

4

6

8

10

12

14

16

18

20Leisure and business travel spending, USD bn

Leisure travel, SEE Business travel, SEE

Croatia and Serbia attract most leisure travel and Croatia and Albania most

business travel

Croat

ia

Bulga

ria

Roman

ia

Serb

ia

Alban

ia

Mon

tene

gro

Bosnia

Herze

govin

a

Mac

edon

ia0

2

4

6

8

10

12

14

Leisure travel spending, USD bn, 2013

Roman

ia

Bulga

ria

Croat

ia

Alban

ia

Bosnia

Herze

go...

Mon

tene

gro

Mac

edon

ia

Serb

ia0.0

0.5

1.0

1.5

2.0

2.5

Business travel spending, USD bn, 2013

Source: WTTC Tourism database18

Strengths

SEE Tourism - Strengths

Location and proximity to Europe as the highest-spending region on tourism

Large diversity in natural habitat/ natural resources (offer potential for different kinds of tourism)

Rich cultural heritage

Diverse tourism offer

Favourable and diverse climate

Hospitality

Some economies are price competitive in the tourism sector

Offers

SEE Tourism - Offers

Cultural heritage tourismHealth tourismFaith tourismAdventure/recreation tourismSun and beach tourismWinter tourismCity Break tourismEcotourism Agro tourism

SEE offers diverse landscapes and climates

A coastline of almost 7000km (Croatia, Bosnia and Herzegovina, Montenegro, Albania)

More than 1,200 islands mostly along the Croatian Adriatic coast

Beaches and IslandsMountains and hills• Many hilly and mountainous areas, e.g.

Dinaric Alps, the Šar Massif, the Pindus Range, the Albanian Alps, the Balkan mountains

• Some of the least-touched alpine regions on the continent

• A network of 35 national parks and around 150 protected natural areas

Favourable Climate

• Mediterranean climate along the coast

• Mild winters at the coast and in the Southern part of the region

• Snowy winters in the mountains (ski tourism)

Source: UNESCO (2014), “World Heritage List”21

Selected Examples

Natural sites on UNESCO World Heritage List

Croatia: Plitvice Lakes National Park FYR Macedonia: Natural

and Cultural Heritage of the Ohrid region

Montenegro : Durmitor National Park

Source: UNESCO (2014), “World Heritage List”22

The SEE region also offers numerous UNESCO cultural sites

Country SiteAlbania Butrint

Albania Historic Centres of Berat and Girokastra

Bosnia and Herzegovina Old Bridge Area of the Old City of Mostar

Bosnia and Herzegovina Mehmed Paša Sokolović Bridge in Višegrad

Croatia Historical Complex of Split with the Palace of Diocletian

Croatia Old City of Dubrovnik

CroatiaEpiscopal Complex of the Euphrasian Basilica in the Historic Centre of Poreč

Croatia Historic City of Trogir

Croatia The Cathedral of St James in Šibenik

Croatia Stari Grad Plain

Kosovo Medieval Monuments in Kosovo

The FYR Macedonia Natural and Cultural Heritage of the Ohrid region

Montenegro Natural and Culturo-Historical Region of Kotor

Serbia Stari Ras and Sopoćani

Serbia Studenica Monastery

Serbia Gamzigrad-Romuliana, Palace of Galerius

Source: UNESCO (2014), “World Heritage List”23

I

FESTIVALS IN THE REGION

HOUSES WITH TRADITION IN THE REGION

HAMAMS/SPA IN THE REGION

BRIDGES OF THE REGION (symbolic meaning for the regional cooperation)

CASTLES, FORTRESSES, MONASTERIES OF THE REGION

ARCHEOLOGICAL SITES

STORIES FROM THE REGION

CELEBRITIES FROM THE REGION TRADITIONAL FOOD, MUSIC, CRAFTS, WAY OF LIVING IN THE REGION

(PROMOTING DIVERSITY) THE HISTORY OF YOUGOSLAVIA MONUMENTS OF THE WORLD WAR II FILM LOCATIONS CARNIVALS – MASKS OF THE REGION PILGRIMAGE - CHURCHES AND MOSQUES OF THE REGION

A Bridge Between Macroregions Regional Cooperation for European Integration

SEE Cultural Tourism

SEE Tourism – high potential for investors

Availability and diversity of investment opportunities

Competitive costs

Potential for tourism growth and increased market share

Investment incentives

Added value:

increased marketing

and branding

thank you

RCC SecretariatTrg BiH 1/V, 71000 SarajevoBosnia and Herzegovinahttp://www.rcc.int