East Europe Fails to Milk Tourism Cash Cows
Most of the ingredients exist -- they are cheap, the weather is good and the region has withstood the post-September 11 tourism downturn -- but hoteliers and travel agents say more must be done to put these destinations firmly on the map.
In the region's capitals, rich in pre-communist architecture, new luxury hotels are being built in anticipation of future holiday and business conference trade, Reuters said.
Hungary is developing more spas in an effort to attract new tourists as the region's powers bid to join the European Union.
Shrugging off a fall in the number of visitors, only partly due to the September 11 attacks on the United States, Prague, Budapest and Warsaw have pressed on with a hotel building boom which, some say, reflects renewed confidence that people will flock to the region.
Others think it's a legacy of over-confidence when plans were drawn up in the late 1990s, before a global economic slowdown punctured widespread hopes of continued robust growth.
At the end of last year, Budapest -- known as the Paris of the East for its tree-lined boulevards and architectural mix -- had 2,750 rooms in four- and five-star hotels.
Within the next 18 months, another 1,500 will have been completed to coincide with expected EU enlargement.
Peter Wolff, head of the Hungarian Hotels' Association, said it was unlikely these investments -- a new, top of the range hotel costs upwards of $60 million -- could be justified in the current climate.
"The decision on most of these investments was made three to four years ago, when everybody expected a three to four percent annual growth for years to come, and these expectations proved too optimistic," he said.
SUBHEAD******Empty Hotel Rooms The number of tourists arriving in Poland has fallen steadily since 1999, though industry experts say the September 11 factor was limited. The downtrend is seen continuing, exacerbating an already troubled economy.
Hungary, too, has seen a dip in overseas visitors since late last year -- tourist numbers fell seven percent year-on-year to 7.8 million in January-April -- but officials expect more Europeans to make up for a drop in those who will stay home in Japan and the U.S. Crucially, Hungary's hotel occupancy rates slumped to 37 percent in that period, and to 45 percent in Budapest, a lively, well located city pressing its case as a regional business center.
Hungary's tourism revenues in the first quarter fell 17 percent year-on-year to 696 million euros ($676.4 million).
Historic Prague, lovingly restored and painted pastel since the 1989 velvet revolution saw off decades of communist decay, boasted one of Europe's best hotel occupancy rates last year at 71 percent, according to Andersen Consulting.
Warsaw, capital of the region's largest country Poland, had average 2001 occupancy rates of only 59 percent, perhaps due to having the highest room prices at around 165 euros a night -- only London, Paris, Rome, St. Petersburg and Geneva cost more.
However, Croatia, with its long Adriatic coastline, is confident it can continue to attract tourists as most of these are from neighboring European countries rather than from the United States or the Far East.
"Ninety-five percent of our guests come to Croatia by car and most of them are from nearby in Europe," said Deputy Tourism Minister Gordana Borojevic.
Boasting the region's only real seaside resorts, Croatia and Slovenia have the potential to boost tourism income.
"After the (Balkan wars) turmoil of the 1990s, interest in Croatian tourism has been on the rise and tourist numbers have risen by around 60 percent in the last two years," said Croatia's Tourism Ministry, adding that it expected further growth of five to 10 percent this year.
Tourists boosted Croatian revenues by $3.4 billion last year, against $2 billion in Poland and $4.15 billion in Hungary.
SUBHEAD*********More Than Brochures The travel industry blames poor marketing for Poland's failure to build on its rich historic and cultural heritage.
"Poland does not have sufficient promotion abroad," said Grzegorz Pradzynski, head of the country's leading travel agency Orbis Travel, a unit of hotel chain operator Orbis.
"Our authorities do not treat tourism as an industry," he said. "Unless we have some help from the state in creating the country's image and improving infrastructure, we should not expect any rebound." Hungary's Wolff expressed similar complaints.
"You cannot advertise a country as a tourist attraction just by spreading some leaflets around," said Wolff, who also manages a leading Budapest hotel. "Prague jumped ahead literally from nowhere." Wolff was also quick to dispel the myth that Hungary's popular thermal waters are a boundless source of both hot water and cool Western money.
"Our spas have one great advantage, they're cheap," he said.
"Out of 100 generally recognized services, our spas can offer about 10 at best.
"True, if you dig a hole almost anywhere in Hungary, you'll get hot water," he said. "But that's just hot water and it's a long way from there to having proven health benefits." Alone in the former communist region, Hungary has a one-off annual boost from hosting the formula one motor-racing circus, which provides a lucrative extended weekend every August.
Accommodation prices go through the roof, but hotels for miles around are booked up weeks in advance.
"On the weekend before the race, most hotels in a 100km (62 miles) radius around Budapest are fully booked, despite prices at four times the normal rate," said Wolff. "There's no accommodation, no matter how humble, which does not profit from the race."