The number of foreign tourists visiting the CEEC has soared - particularly at the beginning of the 1990’s – the rise in the sector’s turnover since the end of the last century being chiefly due to an increase in tourist spending. The reopening of these countries’ borders made it possible for “Western” Europeans to (re)discover the cultural jewels of a history common to both parts of Europe, artificially split for nearly 45 years. Their common history continues in the varied landscapes and climates, forecasting a diversity of tourist destinations, still firmly anchored to a few "star" products and areas: the beauty of the old town centres in the historic urban areas of the region, the spas, and a few ski and bathing resorts. In the CEEC, the modernisation of tourist facilities constitutes one of the sector’s major challenges. In the opposite direction, if the evolution in per capita spending on tourism is to be believed, constant and consistent national tourism also being observed, the people of Central and Eastern Europe are proving to be just as "great travellers" as their cousins in the west.
1- An important sector for the Central and Eastern European economies
The CEEC do not lack the assets necessary to attract foreign tourists. However, although their numbers increased rapidly in the years immediately following the fall of the Berlin Wall, on the whole, and since about 1995, the arrivals of tourists seem to have remained relatively stable, the increase in earnings being due to a rise in daily per capita spending.
From a macroeconomic point of view, earnings under the heading "travel" in the balance of payments were roughly equivalent to those of FDI in 2004, a little under € 20 bn.
Between 1995 and 2004, the earnings from non-resident tourists doubled, rising from € 10 bn to € 20 bn. Following the record established in 2001 (€ 21 bn), they dropped in 2002 (€ 19 bn) and 2003 (€ 17 bn), and recovered in 2004, marking a return to growth. The three Baltic States however, together with Slovenia and Bulgaria, escaped the “post September 11th recession”, and grew continuously over the 1999-2004 period.
In 2004, the entries of capital recorded under the "travel" heading in the balance of payments (BoP) accounted for 3.5% of GDP in the region’s economies, whereas the net entries (earnings from non-residents, minus residents’ spending abroad) accounted for 1.3% of their GDP. Thus tourism constitutes an important source of finance for the current account balance and, more generally, for the economy. In terms of BoP, six of the region’s countries post a greater “dependence” on the sector: Malta, Cyprus, Bulgaria, Estonia, Slovenia and the Czech Republic. Hungary does not belong to this group because of its nationals’ substantial spending abroad. Romania, Latvia, Slovakia and Poland are below these two regional averages.
In terms of jobs, in 2004 the hotel and restaurant sector alone employed a little over 1 M persons in the region, that is 2.5% of the total jobs and 8.5% of jobs in services, a figure that has been growing since 2000 (900,000, 2.3% and 8.5% respectively in that year). Country by country, the same categories can be observed as with the BoP, with Hungary rejoining the group of “tourist countries”.
After a rise at the beginning of the Nineties, the number of foreign tourists has been stable for a few years, at around 40 M, the average duration of stay having also remained largely unchanged, at 4.5 days per tourist. But the trajectories and the types of tourism differ from one country to another, sometimes with a considerable amount of domestic tourism.
In 2003, Poland attracted a third (13.7 M) of all the foreign tourists visiting Central and Eastern Europe, which places the country, apparently at least, among the most attractive in the world: for the sake of comparison, in the same year Mexico, which, according to the WTO, is the world’s 8th most popular destination, attracted 18.6 M tourists and Thailand 10 M, far behind France (75 M) and Spain (52 M), n°1 and n°2 respectively in the planetary hierarchy. But the number of tourists in Poland seems to have to be corrected by the "transit" between the EU and the former CIS: it takes about fifteen hours to cross the country by motor vehicle and any night spent in the territory “transforms” the person from a visitor into a tourist. Thus, the relationship between the number of visitors and the number of tourists is from 3 to 1 in Poland, whereas it is from 10 to 1 in Hungary and from 20 to 1 in the Czech Republic, two countries which can easily be crossed in a day.
In 2003, the Czech Republic attracted a little over 5 M foreign tourists, followed by Bulgaria, which has been in strong progression for a few years (4 M in 2003 against 2.4 M in 1999) and is now overtaking Romania (3.3 M), Hungary (2.9 M) and Cyprus (2.3 M), a set of popular destinations in the region. In Estonia and Latvia, a marked increase in the number of foreign tourists can also be observed, +50% and +100% respectively since 1999.
Overall, the Germans and the British head the list of tourist nationalities visiting the NMS, with shares of 30% and 7% respectively of the total (in calculating this average, for each CEEC only the first four countries of origin are considered, which overvalues the two shares), these two countries also being the leaders if Europe is considered as a whole. The proportion of German tourists is even higher if one only considers the Central European countries, Slovakia being a regional exception insofar as about half its tourists come from the other countries of the region, mainly to take advantage of the mountains and the Slovakian ski resorts. In the Baltic States, Finland and Sweden account for more than 30% of the foreign tourists. Lastly, three countries, Estonia, Slovakia and Cyprus, are quite strongly dependent on their four main tourist markets.
Domestic tourism should not be considered as a negligible quantity in the CEEC, even if it “only” accounts for 47% of the total nights spent in hotels in these countries, against 55% on average in the EU 25. Two remarks are essential. Firstly, the proportion of residents in the total number of overnight stays is much greater if one considers all the possible types of accommodation, including campsites. Secondly, the regional average of domestic tourism is greatly influenced by Poland, where non-residents account for only 38% of the total number of nights spent at hotels (20% at campsites).
2- Tourism is often concentrated in a few regions
Most of the nights are spent in only a few regions, stimulated by “star products”, sometimes with notable differences between residents and non- residents.
In the Czech Republic, Prague absorbs half the nights spent in the country by non-residents, for two main reasons: the beauty of the city and the concentration of foreign company headquarters in the capital, a factor which generates business tourism. The places where residents spend their nights are distributed more evenly among the Czech regions, the first - the area around Hradec Kralowe, in which the country’s most famous ski resorts are located - accounts for 22% of the total (its market share of the nights spent by non- residents amounts to 14%). In North Western Bohemia, hydrotherapy treatment, a tradition dating back to the 18th century, “green” tourism as well as the Karlovi Vary film festival are the region’s main assets.
In Hungary, the same phenomenon can be observed as in the Czech Republic concerning the capital, Budapest, which accounts for nearly 50% of the total nights spent by foreign tourists. Hydrotherapy forms the second star product in the range of Hungarian tourist attractions. Hungary is reported to collect approximately 20% of the total European demand for this market segment. It is mainly distributed between 3 sites: Budapest, Heviz (Györ region) and Hajduszoboszbo (Debrecen region), the “products” offered in the latter being somewhat at the lower end of the market and frequented more by residents (1 M nights spent by domestic tourists against 600,000 by foreigners). Finally, Lake Balaton is a particular favourite of the Hungarians, but also of the Germans and the Austrians, the available accommodation being spread over 3 regions, those of Györ, Tatabanya and Pecs.
In Poland, the disparities do not appear as great. As regards non-residents, the regions of Warsaw (1.1 M nights), Cracow (1 M) and Wroclaw (1 M) account for only 50% of the total, the regions of Pomerania and Mazuria attracting approximately 10% each. Many German tourists come to visit these regions, whose towns are in general pleasant, like those of Torun or Gdansk, and the countryside is richly endowed with lakes and forests, in particular Mazuria. Flows of residents are even more evenly distributed between the Polish regions, none of them exceeding a market share of 15% (Cracow 14%).
In Slovakia, more than half the nights in the case of residents and three quarters of those of non-residents are spent in the two eastern regions of the country (a total of 2.7 M in the central region around Zilina and 2.6 M in the extreme east), where the Slovakian ski resorts, which are especially popular with the CEECs’ neighbours, are located. Bratislava, the capital, seems to suffer from a dearth of interest. The devastation caused by the storm in 2004 will, in the short run at least, probably have a negative impact on visits to the mountain resorts.
In Bulgaria, foreign tourists spend nearly 80% of their nights in the Black Sea resorts, Sofia accounting for only 10% of the total. When the potential of hydrotherapy is fully exploited in this country, the distribution of tourists will probably be more evenly balanced. Indeed, officially the country has 102 thermal spas, including 34 of national scale and 68 of local importance and the mineral composition of its waters is particularly diverse. The Plovdiv region, where the country’s main trade fair is held, accounts for nearly 30% of the nights spent by residents, ahead of Sofia and the two coastal regions.
In Romania, a country for which regional statistics are not available, the residents’ favourite holiday destinations are the beaches of the Black Sea coast. The country also has other tourist attractions: the Danube delta and its fauna, the monasteries of Bucovine, the Carpathian mountains and their legends, the old centres of the Transylvanian cities (Brasov, Cluj, Sighisoara …), the ski resorts which are being developed, as well as a varied countryside favourable to rural tourism.
In the “small countries” of the CEEC, which are grouped into only one region at the statistical level selected, the capital attracts more than half the foreign tourist flows in the case of the three Baltic States and Slovenia. In the Mediterranean islands, the tourists congregate in the purpose-built hotel complexes, in the case of Malta, in the north and north-west of the island. In Cyprus, the recent opening of the border between the north and south of the island could increase this sector’s weight in the island’s economy still further.
3- Some opportunities on narrow markets
A common belief is that the supply of tourism-related infrastructure is still insufficient compared to the tourist potential of the countries concerned, whether it be a question of access or accommodation capacity. On the Romanian coast, for example, this situation leads to an unattractive price/quality ratio in the facilities provided, when compared to international standards. Professionals also point out the small number of one and two-star hotels available, in the capitals as well as the provinces, whereas top of the range hotels, and even sometimes the medium range, appear to be at saturation point in the capitals of Central Europe.
Part of the EU funds will be attributed to the tourism sector, about € 384 M per annum over the 2004-2006 period, if one includes the "additional" national funding dedicated to the sector (see Revue Special Elargissement – EU Financings).
The total expenditure abroad of CEEC nationals, recorded under the heading "travel" in the BoP, amounts to € 11 bn, approximately the equivalent of Greece and Spain together. However, in proportion to their incomes, tourists from the CEEC spend twice as much as French tourists: although the income of the region’s residents is only 22% of that of the French, their tourist spending abroad is 41%. The Bulgarians and the Estonians lead, with expenditure which, if one takes the French income as a reference, represents a level of spending which is 2.5 times greater; the Latvians, Lithuanians, Slovenians and Hungarians are around the regional average, Romanians are the least extravagant, whereas the spending habits of the Poles on foreign tourism are in proportion to their income levels.