Bulgaria hopes for 10 percent rise in tourism revenue

The Sofia Echo, 26th June 2006

Bulgaria can hope for a rise in tourism revenue by up to 10 per cent this year, Government officials say.

Meanwhile industry sources make less upbeat forecasts and even fear the revenue would fall, SEE News news service reported in an industry analysis published on June 15.

Underdeveloped infrastructure, unrestrained hotel construction activity in some of the country’s largest seaside and mountain resorts and a shortage of skilled workforce in the tourism sector are all causes for concern, Bulgarian tour operators say.

Tourism contributes about 12 per cent of Bulgaria’s gross domestic product and tourism revenue helps the country partly offset the rise in its trade deficit. Last year, 4.84 million foreign tourists visited the country, bringing revenue of 1.932 billion euro.

The government’s Agency for Economic Analyses and Forecasts (AEAF) expects tourism revenue to rise this year by a nominal 11.5 per cent and by nine to 10 per cent in real terms, the head of the Economic Policy and Forecasting Directorate at the agency, Stefan Tsvetkov, told SEE News.

AEAF based its forecast on projections provided by Bulgarian tour operators and an increase of the lodging potential in the country, Tsvetkov said.

Lyubomir Pankovski, president of one of Bulgaria’s largest tour operators, Alma Tour, agreed.

He projected that the number of tourists coming to Bulgaria this year would rise by five per cent and tourism revenue would grow by up to 10 per cent, as more hotels move to a higher category following large-scale investments.

“Investments in the hotels change the essence of the Bulgarian tourism product,” Pankovski said.

The Bulgarian Tourist Chamber, a lobby group, expects that the number of foreign tourists visiting Bulgaria this year will be five to six percent higher than in 2005 and the tourism revenue would grow by some seven to eight percent, benefiting from improved lodging conditions, chamber chairperson Tsvetan Tonchev told SEE News.

Bulgarian resort operator Albena CEO Krasimir Stanev said that his most optimistic forecast for 2006 was that tourist numbers would increase by 10 per cent and tourism revenue would go up by six to eight per cent. He added, however, that a more realistic forecast would be for tourist numbers to rise by one to three per cent this year, while Bulgaria’s tourism revenue would grow by a mere 0.5 to one per cent from 2005 as foreign tourists shift their preferences to Spain this year.

Stanev said that Spain was attracting 50 per cent more tourists this year compared to 2005 because the country offered good prices, infrastructure and services, while Bulgaria had underdeveloped infrastructure and was not advertising its tourist services enough.

“At the moment we are in the red, and there is a big possibility to end in the red this year,” Stanev said.

Bulgaria could avoid a possible drop in tourism revenue if more Russian holidaymakers come to the country, which many resort operators consider likely, and if tourists who had planned to holiday in Romania and Turkey decide to come to neighbouring Bulgaria instead, because of the bird flu scare in the two countries.

The lodging capacity of Bulgaria has increased by about 20 per cent since last year and even if 10 per cent more tourists visit Bulgaria this year than in 2005, this still would mean that the profitability of the business is falling, Stanev said.

Kalin Sutev, chief executive of tour operator Bulgarian Tourist Services (BTS), said that the number of hotel bookings made so far was lower than a year earlier but he hoped last-minute bookings would help compensate for the decline.

Last year, BTS brought 150 000 Germans tourists, 15 000 British and 10 000 Russians to Bulgaria.

Bogdan Hristov, chief executive of Bulgarian tour operator Hotelbeds Accommodation and Destination Services, was pessimistic. He said that he expected a 10 per cent fall in both tourist numbers and tourism revenue this year, because of underdeveloped infrastructure, lack of enough skilled workforce to match the rise in lodging capacity and increased competition from Cyprus, Greece and Turkey.

“The advantage of low price is no longer there,” Hristov said.

Bulgaria’s Black Sea resorts of Albena, Zlatni Pyasutsi (Golden Sands) and Slunchev Bryag (Sunny Beach) attract an increasing number of foreign tourists every year, but tour operators have repeatedly warned that rampant construction of hotels at the seaside in the past three years has begun to turn the resorts into a poorly managed habitat with inadequate infrastructure facilities, SEE News reported.



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