1. Experience of reformation of resorts and tourism complex in the post socialist European countries Hanna Bozzay Ministry for National Economy, Hungary Simferopol, 14-15 November 2011

2. Content History of the CEE countries’ tourism from 1990 Case study of the Hungarian tourism sector from 1990 The means of improving sustainability of tourism development projects Future challenge

3. The starting point Before 1990 well-organised social tourism system in the Czech Republic, Slovakia, Croatia, Poland, Slovenia and Hungary affordable hotel prices due to state/trade union subsidies stable and organised mass tourist flow from neighbouring countries restricted outbound tourism to the western European countries (limited foreign exchange allotment, special application for passport)

4. The changes (1990-1999) The impact of political/economic transition on tourism Drastic decline of demand in public accommodation establishments due to growing prices and decreasing discretional income of local people, traditional source markets Shrivelling social tourism as a result of limited financial subsidies Holiday homes run by trade unions transformed to hotels Low service standards, uneducated staff Tourist flow between CEE countries almost eliminated because of economic, social reasons Growing demand for Western-European countries Political changes in the region Lack of financial resources for quality improvement Un-efficient marketing

5. New directions Following a period of distress the new trends gave impetus to growth Elimination of iron-curtain, bustling interests toward CEE countries, loads of transit visitors Privatisation process, new owners with International experience Market-driven business approach High importance of foreign exchange income, positive financial balance Accession process to the EU

6. The tourism supply The most important attractions of the region: Czech Republic - Prague, historic cities, spas, music festivals Croatia – Adriatic sea, historic towns, medieval castles, natural parks Poland – historic towns with museums, churches, castles, diverse natural surrounding, rich local traditions in the countryside, Slovakia – historic miner towns, spas, unique natural assets (high hills, natural parks) Slovenia – sea side and natural heritage (carst- caves, hills, lakes), spas, countryside, towns Hungary - Budapest, Lake Balaton, thermal baths and spas, Pusta, gastronomy

7. The Case-study of Hungary

8. The transition of Hungarian tourism Early 1990: focus on incoming tourism – Hungary became an interesting, cheap destination for German, Austrian, Italian tourists as a result of less administrative border restriction. In 1992-1995 and 1999 drop in International demand due to political tension in the East-Balkan region 1995-1998: steady growth of international tourism – new markets: Netherlands, USA, Japan, Israel 2000-2008: consolidation of tourist flow – new source markets: France, UK, Northern Europe, and strengthening inbound tourism (Ration: 35%-50%) 2009-decline/stagnation: economic crisis, austerity measures and budget cuts to decrease the high amount/ratio of national debt.

9. The development of tourism infrastructure 1970’s:the majority of tourist capacity – holiday homes First hotel development program – 1978-1985 in Budapest, and spa towns (300 million USD, +7500 hotel bed) Privatisation of hotel companies (Pannonia, HungarHotels, Danubius 1991-1995) Emerging a new hotel group – Hunguest Hotels, previously holiday homes and temporary workers’ accommodations converted to hotels Second hotel construction boom (1999-2004) – new foreign investments (Budapest – Boscolo, 4 Seasons, Hévíz, Szeged) and Széchenyi Plan 1 On-going hotel developments (2004-) – financed by national and European Union’s structural funds (National Development Plan, New Széchenyi Plan)

10. The quality of tourist services 1.In 1970-80’s: Holiday homes – low level of value for money Hotel groups – standard, but generally cheap quality, some high end hotels (Forum, InterContinetal, Mariott, Hyatt) 2. Following the privatisation International experience bring new market oriented methods, hotel supply becomes diversified, new investors enter the market (also in the countryside) Development programs – stimulating quality improvement and high quality hotel constructions (4*- 5*) 3. Nowadays – diversifying and fine-tuning the choice of services in line with changing demand (source markets, demographic groups)

11. Soft elements of reconstructructing an outdated supply 1.Ownership – professional or financial investors 2.Definition of primary target markets 3.Designing appropriate service package 4.Operation, human resource development 5.Efficient marketing

12. Physical development Upgrade the quality level of hotel service Complex product development – each product element should be on the same level or meet the consumers’ requirements – resorts, medical resorts (Hévíz, Bük, Balatonfüred, Mátraháza) Settlement development – improvement of basic and tourism infrastructure, additional, services

13. Focuse on improvement of sustainability of tourism development

14. Making tourism more sustainable Legal regulation – Balaton-act Financial resources stimulating investments (aid- scheme) – revitalization of rundown urban areas EDEN – European Destination Excellence since 2007 Entente Florale, Green Hotel, Blue-wave Flag Emphasizing responsibility Monitoring sustainability

15. Balaton act – spatial development plan Initial situation - recreational area (early 1900’s) Extensive development - mass tourism in 1960-90 Environmental, hydrological issues Shore line regulation Land-zone use Institutional background

16. Financial suport-scheme Objectives: Physical revitalisation of living areas in recreational regions Better exploitation of opportunities to be discovered for business, culture and tourism. Improved environmental safety Encouraging private capital influx and job creation Development of tourism attraction Enhancing tourist services Stimulating private-public partneship in tourism institution system

17. EDEN - Discover Europe’s hidden treasures Themes of the attractions to be awarded 2007 Rural Tourism (10 countries) 2008 Local Intangible Heritage 2009 Tourism and Protected areas 2010 Aquatic tourism 2011 Regeneration of Phisical Sites

18. Responsible tourism development Code of ethics Equal opportunity for handicapped people Practical issues of consumer protection Company social responsibility

19. The future challenge Tourism Destination Management Co-operation - based on voluntary partnership of tourism enterpreneurs, civil organisations and local municipalities Objective – to make more attractive and functional the settlement/sub-region/region/country as a tourist the destination Partners - accommodation, restaurants, travel agents, guides, attractions, local residents’ cultural, ecclesial, etc. associations

20. Thank you for your attention!