NEW TOURISM DEVELOPMENT STRATEGY OF THE SLOVAK REPUBLIC UNTIL 2013

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1 NEW TOURISM DEVELOPMENT STRATEGY OF THE SLOVAK REPUBLIC UNTIL 2013 The Government of the Slovak Republic in its Programme Declaration for the period obliged itself to adopt conditions for expansion of the tourist and hotel industry with the aim to increase the share of this particular industry segment on Gross National Product of Slovakia. The Government shall set up a tourism satellite account, set out the principles of state policy on tourism as an area of public interest with the emphasis on the promotion of the inbound tourism and on domestic tourism. The Government shall revaluate the Tourism Development Strategy of the Slovak Republic until 2013 and prepare complex legislative conditions for implementing the state policy on tourism development with taking into account constituting of institutes in this segment. It shall support the investments into tourism with incentive economic and financial instruments for the purpose of increasing the quality and complexity of provided services. The Government of the Slovak Republic, with the help of EU structural funds as well, shall establish a system of financial support of activities of local authorities, municipalities, cities and entrepreneurs by development of structural parts of the tourism. The Government of the Slovak Republic will also support acceleration of works relating to the new zoning of protected areas in order to keep the purpose of environmental protection but at the same time to enable commercial activities focused on development of tourism and to preserve natural and cultural values of the protected areas for the next generations. The Tourism Development Strategy of the Slovak Republic until 2013 was adopted by the resolution of the Government of the Slovak Republic No. 632 of 24 August 2005 in the previous electoral term. Such strategy did not take into consideration new social character of the European documents about tourism or the policy of sustainable development or the fact that the tourism creates in our country ever more important part of the population's consumption. Submitted strategy is a document that establishes the basic strategic goals for development of tourism in the public interest. The Constitutional Act No. 357/2004 on Protection of Public Interest defines the public interest as support of regional development as well as increase of life quality in rural areas. Tourism may contribute to both such aims because the tourist services are services supporting regional development and the employment as well. 1. Basis for New Tourism Development Strategy With respect to progressing process of globalisation, new trends, many - only partially proved business practices, changes in the social system and also dynamic development of the land suitable for tourism are being applied in practice. Therefore it is important to monitor the process of globalisation closely and analyze impacts thereof on the tourism and therefore the intention of submitted New Tourism Development Strategy of the Slovak Republic is to react appropriately to such globalisation trends by making use of the competition elements and for purpose of providing for sustainable development of tourism in the economic, social and environmental area International Implications and Tourism Development Trends Following the general process of globalisation in the world, international co-operation in tourism was intensified at the end of the 20 th century. Such process was accompanied by the liberalisation of movement of persons as well as by increase of competitive environment. The progress in tourism was adversely affected by terrorist attacks aiming also several tourist destinations at the 1

2 beginning of the 21 st century. But still the development during the recent years shows that the tourism was able to progress also under such conditions, but requires new approaches and appropriate measures on all levels. Globalisation changes in tourism must be acknowledged by Central European countries, which undergo difficult transformation following their accession to EU. For such countries, Slovakia including, there is no other alternative than to join the process of globalisation. The purpose of tourism is therefore to keep the national identity of Slovakia as one of the basic elements of the competitive advantage. According to the prognosis of the United Nations World Tourism Organization (UNWTO) tourism will be fastest increasing in the countries of Central-East and South Europe until The European Commission introduced new milestone of Lisbon Strategy and subsequently European Council approved Renewed Lisbon Strategy on its meeting in March In this respect the effort of the European Union focuses on execution of two basic key tasks for guaranteeing more stable and longer lasting economic growth and higher number of superior employment positions. An important condition for fulfilling of Lisbon goals is to focus effort of the Slovak Republic on sectors of economy that are the most important for the development of the competitive strength of the country, whereas the tourism belongs to areas with high potential without any doubts. The potential of tourism with respect to increase of the employment and economic growth was several times acknowledged at EU level since The tourism acquired direct share of 4 % on GDP and overall number of employees within EU and indirect share of up to 11 % in case of GDP and up to 12 % in case of number of employees. Therefore the tourism creates an important part within the Renewed Lisbon Strategy. From the long-term point of view it can be declared that during the last decades the yearly rate of the employment increase in accommodation and catering facilities (hotels, restaurants and cafes) has been always higher than the rate of overall employment increase 1. The solution for tasks in the sector of the European tourism requires united political approach on all EU levels. The European Commission prepared a renewed European tourism policy with the name Towards a Stronger Partnership in European Tourism. The main aim of this policy shall be to improve the competitiveness of the European tourism industry and create more and better jobs through the sustainable growth of tourism in Europe and globally 2. European policy focuses on: 1. Mainstreaming measures affecting tourism 1.1 Better regulation 1.2 Policy-coordination 1.3 Improved use of available European financial instruments 2. Promoting tourism sustainability 2.1 European Agenda 21 for tourism 2.2 Specific supporting actions for the sustainability of European tourism 3. Enhancing the understanding and the visibility of tourism 3.1 Improving the understanding of European tourism 3.2 Supporting the promotion of European destinations 3.3 Improving the visibility of tourism: a common goal. 2

3 The changes in the demographic structure of Europe will have a major impact on tourism. The number of older people (65 and upwards) is expected to grow. The number of people over fifty who are travelling ever more should increase. Spa and health tourism and tourism relating to exploration of cultural and natural heritage are expected to undergo the most significant growth. New competing destinations are emerging and developing further rapidly, providing innovative products and services. Therefore, the strategic orientation of the tourism must be focused on its long-term sustainability under recognition of internal conditions for development as well as of external economic, technological and ecological environment. With respect to fulfilling of goals of Lisbon Strategy referred to in the document Integrated Guidelines for Growth and Jobs ( ), which is one of the main Lisbon tools for coordination of the EU member states economic policies and taking into account the high share of small and medium enterprises (SME) in the sector of tourism, more attention must be focused on their support while also using EU structural funds in new planning period of the years for such purpose Basic Trends of Economical Development in Slovakia in 2006 According to the data of the Statistical Office of the Slovak Republic the Gross Domestic Product in nominal value of SKK 1,636.3 billion was produced in 2006, which is 11.2 % more than in GDP grew by 8.3 % in constant prices. The production of the Gross Domestic Product increased, apart from raw materials exploitation (decrease by SKK 1.5 billion), in any other sector. The increase was influenced mainly by increase of the added value in constant prices from industrial production (plus SKK 37 billion) and also from commerce, hotels and restaurants (plus SKK 28.5 billion), which is important for the tourism. In terms of tourism important final consumption of households increased by 11.7 % (by 1.7 p. p.) in current prices in 2006 compared to the same period of The progress relates mainly to the increase of the gross disposable income (by 12 %). As to the shares, the largest part of the private consumption was created by the purchase of food costs (21.8 %), but the highest dynamics of growth was achieved by hotels and restaurants (by 13.4 %). The increase of employment accompanied by the decrease of unemployment was still prevailing in the labour market. In average, the number of employees in economy increased by 2.2 % (by 73,200) to 2,148,200 in 2006 (the same rate of growth was in 2005). The yearly growth of employment continued in the construction industry by 9.3 %, high yearly dynamics was recorded also in hotels and restaurants by 7.8 %. The growth of the average monthly nominal wages slowed down. The average monthly nominal wage of an employee in the economy was increased in average by 8 % to SKK 18,761 in The increase thereof was slower by 1.2 p. p. than in The real wages increased by 3.3 %. The wage of the employees in hotels and restaurants was the lowest average nominal wage (SKK 14,170). Although the regional differences and differences in remuneration between individual professions can be presumed also in this area, the small financial participation of the employees has demotivating influence on the quality of services in tourism such employees provide, also causes temporary labour migration, mainly of the qualified employees, to foreign countries. It can be confirmed based on the abovementioned data that the purchase power of our population increases continuously and therefore increase of its participation in tourism can be expected. At the same time it is necessary to increase the financial participation wages in tourism as an important condition for stabilisation of the qualified labour force. 3

4 1.3. Present Development of Tourism in Slovakia Development of Tourism in Slovakia is documented by the following chart including main indexes in tourism in years 2004 to 2006 (2006 data are preliminary). The chart proves that following the partial suppression taking effect mainly in tourism foreign-exchange receipts in 2004 the development of tourism shows increased dynamics in 2005 and Index 05/ Index 06/05 Foreign-exchange receipts from inbound tourism / in SKK mil. 29, , , Foreign-exchange expenditures from passive foreign tourism / in SKK mil. 24, , , Balance of foreign tourism / in SKK mil. 5, , , Share of Inbound Tourism in GDP (%) Share of Inbound Tourism in export of services (%) x x Arrivals of foreign visitors (border crossing) / in thousands 26, , , Departures of Slovak citizens to foreign countries (border crossing) / in thousands 20, , , Number of tourists (visitors with accommodation) / in thousands 3, , , Therein included : foreign / in thousands 1, , , domestic / in thousands 1, , , ,1 Total number of overnight stays of tourists / in thousands 10, , , Therein included : foreign / in thousands 4, , , domestic / in thousands 6, , , ,4 Total average number of overnight stays Therein included : foreign domestic ,8 Total number of accommodation facilities in tourism 2,519 2, , Therein included : hotels, motels, boatels guesthouses ,4 camp ,5 Total number of rooms in tourism accommodation facilities 46,854 47, , Therein included : hotels, motels, boatels 22,644 22, , guesthouses 5,068 5, , ,2 camp 1,142 1, ,2 Total number of beds in tourism accommodation facilities 121, , , Therein included : hotels, motels, boatels 52,058 52, , guesthouses 12,987 13, , ,3 camp 4,346 4, ,690 92,1 Total number of free area places in camps 55,115 53, , Number of entrepreneurs in tourism according to NACE 19,839 20, Source: Statistical Office of the Slovak Republic, National Bank of Slovakia 4

5 The number of foreign tourists in Slovakia grows with a higher rate and also shows higher number of overnight stays and a bit longer time of the overnight stays as in case of domestic tourists. The ranking of the main sending countries is: Czech Republic, Poland, Germany and Hungary. Country Most Important Sending Countries Number of Tourists Share Czech rep. 469, , , , Poland 215, , , , Germany 175, , , , Hungary 100, , , , Austria 51,365 55,609 55,630 60, Italy 37,996 50,201 59,344 60, United Kingdom 26,062 34,349 51,720 63, Source: Statistical Office of the Slovak Republic In 2006 the highest visit rate is showed in Bratislava region (23.5 %), followed by Žilina region (18.2 %), Prešov region (18.1 %), Banská Bystrica region (11.8 %), Košice region (8.5 %) and other regions with app. 6 7 % shares. On the other hand, the tourists spent the least time in Bratislava region in average only 2.0 nights and the most time in Trnava region nights. Visitors in Accommodation Facilities according to Regions Index 2006 Index Region /04 06/05 Bratislava 656, , , , Trnava 246, , , , Trenčín 264, , , , Nitra 197, , , , Žilina 609, , , , B. Bystrica 416, , , , Prešov 687, , , , Košice 294, , , , SR 3,373,540 3,244,485 3,428, ,583, Source: Statistical Office of the Slovak Republic According to the 2005 selective survey of foreign visitor s data the non-transiting visitors represented app. 68 % and the rest are transiting guests, i.e. visitors that were only passing through the Slovakia. The average length of stay of foreign visitors in Slovakia was 2.4 days in 2005, 3.0 days in case of non-transiting visitors. The guests from Germany, Czech Republic and Poland spent the most time in Slovakia. Based on the selective survey, 82 % of the guests organized their travel to Slovakia by themselves. Previous visits and information from friends were the main source of information about Slovakia. The accommodation in private houses, guesthouses, by family and friends was the most frequented followed then by the accommodation in three stars hotels, two and one star hotels, tourist guest-houses, four star hotels and other facilities such as own cottages and cabins in Slovakia. The reason why the hotels of the higher category are only at the end of the above ranking is that there are only few of them in Slovakia until now, but the demand for such hotels is growing fast and therefore further development and construction thereof is important. 5

6 67 % of visitors from non-transiting visitors were satisfied in The visitors commented critically mainly the transportation related services, language level and staff's friendliness, cleanness and hygiene of environment, social-cultural services, skiing related services, price level of services, informational services. The visitors' satisfaction with services in Slovakia is improving gradually. The quality of restaurant catering improved mainly in the big cities, generally the quality of accommodation facilities and development of informational services improves positively. According to the identified average total expenditures per person and day a professional assessment of foreign visitors' expenditures in Slovakia in 2005 was made, whereas such expenditures amounted to SKK billion. Taking into account the lowest figure of expenditures, it is still 76 % more than the official figures. It can be deduced from such data that the importance of the tourism industry in the economy of Slovakia grows continuously. The activity of the travel agencies and travel offices is dominated by the orientation to passive foreign tourism, i.e. travelling of our citizens abroad. The services of travel agencies and travel offices relating the organisation of domestic vacations were used by something more than 250,000 clients, whereas such method of organising for vacation has a downward trend. 490,000 Slovak citizens travelled abroad via Slovak travel agencies in 2005, which is 6.5 % more compared to Tourism organised via travel agencies and travel offices in Slovakia Index Index 05/04 Foreign Tourism - inbound - Foreign visitors 111, , , Day of stay 380, , , Average duration of stay Foreign Tourism - passive - Travels of Slovak citizens 407, , , Day of stay 3,556,224 4,352,045 4,401, Average duration of stay Domestic Tourism - No. of persons 300, , , Day of stay 653, , , Average duration of stay There is space for doing business in tourism in Slovakia and at the same time increased interest in doing business in this sector persists. Not always sufficient quality of services, their complexity remains still a problem, the promotional-marketing activity is insufficient also. It is especially necessary to motivate the entrepreneurs in the sector of inbound and domestic tourism. It is necessary to improve significantly the coordination between the public and private sphere including entrepreneurs activities as well as non-profit activities. The preparation of Act on Creation and Financing of Tourist Associations may help in this respect. 6

7 1.4. Natural, Cultural and Historical Potential of Tourism in Slovakia Though the area of Slovakia is not big in size, it is generously endowed with tourist attractions. Slovakia is similar to other inland European countries such as Austria and Switzerland in term of continental location and variety of tourist attractions. The potential of tourism in Slovakia is relatively extensive, covering almost all major types and forms of tourism. In term of the year round exploitation, it is important that there are 9 national parks, 14 protected landscape areas, numerous lakes, extensive forests, almost 4,000 caves out of which 12 are publicly accessible: Belianska, Bystrianska, Demänovská jaskyňa slobody (Demänovská Cave of Freedom), Demänovská ľadová jaskyňa (Demänovská Ice Cave), Dobšinská ľadová jaskyňa (Dobšinská Ice Cave), Domica, Driny, Gombasecká Cave, Harmanecká Cave, Jasovská Cave, Ochtinská aragonitová jaskyňa (Ochtinská Aragonite Cave) and Važecká Cave. Up to this date there are app. 12,000 km of marked tourist paths, unfortunately the length thereof is continuously decreasing. Therefore the summer tourism may develop in different forms in Slovakia and visitors may stay at the waters or in the nature. Dozens of castles, palaces, rich history and culture, 19 city memorial areas and also 5 natural and cultural monuments registered in the register of the world cultural heritage UNESCO (Caves of Aggtelek Krast and Slovak Krast, Banská Štiavnica and the Technical Monuments in its Vicinity, Spišský Hrad and its Associated Cultural Monuments, Traditional Architecture Preservation Vlkolínec, Bardejov and Jewish Suburbium and localities of cultural heritage forecasted for the registration in the World Heritage List wooden churches in the Slovak part of the Carpathian Arc, System of fortresses at the junction of Danube and Váh in Komárno-Komárom, Monuments of Veľká Morava, Slavonic settlement in Mikulčice Church of St. Margita of Antiochia in Kopčany, Limes Romanus Roman monuments on middle Danube, Churches in Gemer and Abov with medieval wall paintings, Chatam Sofer Monument, Vineyard area and group of vine cellars in Tokaj, concept of lens-shape historical city centre in Košice, extension of locality Spišký Hrad and its Associated Cultural Monuments with Levoča and work of Master Pavol in Spiš), folklore festivals and fairs and outdoor museums, numerous museums and keeping of folk art create base for expansion of cultural tourism. The religious monuments throughout all Slovakia belong to the pearls of culture and history. Very special and precious wooden churches in eastern Slovakia are unique. Almost 62 % of the country is created by mountains and mountainous areas what makes good conditions for development of winter tourism in Slovakia. This is one of the few competitive advantages of Slovakia compared to the neighbouring countries (apart from Austria). We have already 350 ski resorts equipped with more than thousand of lifts and ski-lifts in such mountainous areas. 20 of our most important mountain ski resorts have good facilities and international status. The length of downhill and cross country tracks with artificial snow exceeds 150 km and they cover area of more than 750 hectares. Winter resorts gave rise to further investments such as accommodation, catering, ski equipment rental, skiing schools, transportation and other services creating far more jobs than the operators of ski facilities themselves. The efficient and intensive expansion of skiing (skiing activities) requires further development of resorts, above all those with international importance. Thereafter, in combination with spas, the year round exploitation of such winter mountain resorts may be provided for. Completing of building of infrastructure, especially transportation and road maintenance, is also very important. 7

8 Since app. the two thirds of the area of Slovakia possesses rural nature, we have possibilities to expand rural tourism and agritourism within that. Continuously built vine routes such as Malokarpatská, Nitrianska, etc. can be included in such sector. There are more than 1,200 thermal and mineral springs in Slovakia which creates conditions for the year round development of spa and health tourism. There are already 19 natural healing spas built based on the natural healing waters and 6 natural healing spas built based on climatic conditions suitable for healing with total capacity of more than 12,000 beds, in more cases of international importance. The preventive part of spa tourism, so-called health tourism, i.e. prevention of illnesses often in a form of new wellness centres is coming forward with relatively rapidly. Thermal springs, mostly in the area of South-West Slovakia, create good conditions for stays in the thermal baths. We have more than 40 such thermal baths. Newly built aqua parks are very popular in the recent years. Their combination with mountain resorts is very attractive and much sought for. The mountain regions with very good climate, especially in High Tatras, allow us to develop climate spas. One of the important parts of the offer of tourism, domestic and foreign inbound as well, is cultural and historical landmarks of Slovakia. Mining has also such potential for tourism. The history of raw materials mining in Slovakia is recorded from the very beginning of the historic ages, in some cases from the pre-historic age as well. Precious metals gold and silver were mined mainly in Kremnica, Banská Štiavnica, Hodruša, Zlatá Idka, Gelnica, precious opal in Dubník, salt in Solivar near Prešov. Banská Bystrica Region (Staré Hory, Špania Dolina) and Spišsko-gemerské Rudohorie (above all Smolník, Slovinky, Gelnica) was known for mining of copper. Ironstone mines were located mainly in Spišsko-gemerské Rudohorie - Železník, Žakarovce, Rudňany, Rožňava, Gelnica, Smolník, Slovinky. Unique blast-furnaces remained preserved. Lead and zinc was also mined in Slovakia, mainly in Banská Štiavnica, Hodruša, mercury in Malachov, Rudňany, Kobeliarove, Gelnica, antimony in Čučma, Pezinok, Magurka, Liptovská Dúbrava, opal in Dubník, brown coal/lignite (20th century) in Handlová, Cígel, Nováky and in Veľký Krtíš. Some of the beds belonged to the largest in the European and also worldwide scope in their golden age. Entry roads (portals of tunnels and some pits), some parts of treatment facilities, iron-mills etc. remained preserved. There exist local collections of minerals, furnishings and technical equipment. The progression of mining, ore and coal treatment and metallurgy has reached very high level acceding boarders of our territory. It achieved world and European primacy in many activities. It is natural that the intensive exploitation of nonrenewable resources lead to the continuous decrease of the reserves, in many case the exploitation became more difficult, more financially and technically demanding. We can say that based on the actual status of the mining facilities app locations can be considered in terms of their use as the tourist attractions. Because of the financial possibilities, only those most important and the most perspective for exploitation in tourism have to be selected, above all in relation to other tourist activities in the respective region. Thus, 7 10 locations are to be considered in the first stage with their stepwise development to outdoor museums, museums, technical monuments, geo parks etc. Only combination of good conditions, developed infrastructure of tourism and quality services creates base for the tourism to comply with the tasks and function as expected. Based on the Regionalisation of Tourism in the Slovak Republic, the areas in North and Eastern Slovakia are suitable for mountain and winter tourism and sport activities, South and West Slovakia provides possibilities for water vacations and use of thermal water. Almost all of the Slovakia possesses quantities of cultural, historical and natural attractions with possibilities of the 8

9 all-year use thereof. The area of Slovakia can be divided into 21 tourism regions, the potential of which is introduced in the following chart. Chart of reached long-term potential of tourist areas structured in accordance with activities: Activity Water stay/holiday Water sports Thermal water stay/holiday Potential High Good Average Basic Forest/mountain area holidays Hiking Biking Downhill skiing 9

10 Activity Ski tourism (ski trips, skimountaineering) Rural holidays (agritourism) Mountain-climbing Cave visits and speleology Water tourism/watermanship Paragliding Potential Increased Basic Reached middle-term potential of tourist areas (according to activities) Activity Water stay/holiday Thermal water stay/holiday Potential High Good Average Basic 10

11 11 Water sports Hiking Downhill skiing/snowboarding Gemerský Cross country skiing Biking Spa holiday/recreation Cultural heritage exploration Visits to galleries and museums

12 Events visits Participation to congresses and conferences Other sport activities Business tourism Activity Potential Increased Exploration of local traditions Participation in/visits to fairs and exhibitions Basic 12

13 Facilities Temporary accommodation Facilities Tourist information offices Reached potential regarding facilities Potential High Good Average Basic Potential Increased Basic 1.5. Supporting Instruments for Development of Tourism Three tourism development grant schemes (TDGS) were prepared and executed within the scope of the support of tourism development from EU pre-accession funds, namely from financial memorandum PHARE 1198, PHARE 2002 and PHARE Schemes were executed in the years and were focused on investment areas and also on non-investment areas. Overall 313 projects in the amount exceeding SKK 400 million were supported. The most important form of support is created by EU structural funds. The support of tourism is one of the two priorities of the Sectoral Operational Programme Industry and Services for the years , whereas such support is executed by three measures. 23 projects in the total amount of SKK billion were approved in order to support activities of public sector. The support of business activities in tourism, namely of small and middle entrepreneurs, was executed via 40 selected projects in the total amount of irreclaimable financial contribution of SKK 1.30 billion. STB (Slovak Tourist Board) is the direct recipient of the support within the scope of the third measure. With the budget funds in the amount of more than SKK 600 million, STB provides for two basic tasks: namely execution of propagation and promotional activities of Slovakia as country of tourism and creation of National United Information System of Tourism in the Slovak Republic. Another form of support consisted of the Scheme of Support of Tourism Development in the Slovak Republic No. 6 which had a nature of scheme de minimis and was covered financially from the sources of the state budget. 66 projects were approved for the execution from 2004 until the end of 2006 with irreclaimable financial contribution in the amount of more than SKK

14 million. The execution of supported projects brought 920 beds, 2,522 table seats, 382 permanent jobs and 35 seasonal jobs. Up to 17 projects were focused on artificial snow preparation of ski lifts and purchase of equipment for ski slopes treatment. Extraordinary interest in challenges within the scope of pre-accession funds, grant schemes and later in the EU structural funds themselves proves that the tourism sector has been and is prepared to make use of such financial funds for its development also in the next planning period ; the demand remains high, no relocation of possibly unused funds into other programmes was necessary since the demand exceeded the supply up to 10 times. Another measures of support may be characterised as indirect forms of support. Specifically, in accordance with Act No. 366/1999 Coll. on Income Taxes as amended the entrepreneurs were granted with possibility to include also a contribution in amount of SKK 1,000 to employees for accommodation in the tourist facilities during the vacation of the employee or the self-employer in their tax expenditures Such amount was extraordinary low, the measure did not achieve the desired effect and therefore this provision was later abolished. According to Act No. 313/2005 Coll. on Social Fund as amended it is possible to provide an employee with a contribution to a vacation from the social fund which is created from gross wages and salaries of all employees in amount of 0.6 % to 1 %. It would be necessary to increase the minimal rate of creation of the social fund and modify the rules of the use of the financial funds for vacation of employees for purpose of supporting the domestic tourism. Very important element increasing competitiveness of Slovak tourism in the previous period was the lower rate of the value added tax applicable on the selected services. Pursuant to Act No. 222/2004 Coll. united VAT rate of 19 % is applied in Slovakia since 2004, which meant increase by 5 % in case of tourism. Although the entrepreneurs decreased the influence of VAT increase with decrease of their proceeds, such approach resulted also in decrease of the amount of their funds for the investment development or, as the case may be, better employees' remuneration. The state subsidies for purpose of recreational stays of non-working pensioners can be deemed to be only support of domestic social tourism. Holidays of non-working pensioners were provided for by the company SOREA in low season periods mainly. There is a great interest in such holidays. In numerous European states so-called travel or recreational cheques are used to support domestic tourism above all. In Switzerland Swiss Travel Cashieer - REKA (Schweizer Reisekasse) was established already in 1939 as a tool for support of social tourism and has been fulfilling such task until today. In France, National Agency for Vacation Cheques (Agence Nationale pour les Chéques- Vacancies) was established in 1982 which manages the system of vacation cheques "Chéques- Vacances". The advantages of such system may be used by employees in private sector as well as by employees of state in productive and retired age. Since 1999 the vacation cheques may be used also by employees of small and middle enterprises that employee less than 50 persons. It was discovered based on the financial analysis that EUR 1 put into cheques brings benefit of EUR 4. The amount of used cheques increased from EUR 170 million to EUR 925 million. System of vacation cheques supports the attendance of tourism facilities effectively. 14

15 In Hungary, Hungarian National Recreational Foundation was established in 1922 which supports the development of domestic tourism in a form of recreational cheques. The foundation concluded agreements with 360 travel agencies and more than 3,600 accommodation facilities which accept the recreational cheques. It was possible to provide recreational cheques in amount of HUF 62,500 (app. SKK 8,500) to one person in 2006, whereas the tax allowance was 100 %. Recreational cheques are issued on a name and are valid for one year. The employers may remunerate their employees therewith. The recreational cheques create 30 % of the sales of accommodation facilities in the domestic tourism. In the next period, EU structural funds will create the most important instrument for financial support of tourism activities. It will be necessary to focus attention on exploitation of natural, cultural and of up to this date built potential in tourism for development of sustainable tourism, with goal of financing the construction of complex centres and facilities of tourism with added value. PPP projects - Public Private Partnership are another one from supporting measures for development of tourism, support for entry of entrepreneurs into this sector and maximizing of inflow of direct investments into the sector of tourism. Public Private Partnership projects are standard worldwide instrument for providing of public services and public infrastructure, whereas by the optimal implementation thereof they contribute to more efficient allocation of public resources, providing of quality public services, economic growth and growth of direct foreign investments with the support of private investments into the public infrastructure and public services. PPP is a form of cooperation between the public and private sector with purpose of financing of construction, reconstruction, operation and maintenance of infrastructure and providing of public services by such infrastructure. Within PPP the subjects of public sector are the partner and customer of the private sector from which they purchase services. Generally, the private partner provides on its own costs for construction and operation of the work and as a counter value it provides services related to such work for payments from the users thereof or from the public partner. Another one from important characteristics of PPP is the division of risks related to the construction and operation of the works between the private and public partner and long- term basis of contractual relationships of the private and public partner. At the same time the presentation of Slovak tourism at home and abroad and preparation of National United Information System of Tourism in Slovak Republic will be supported. Slovak's National Strategic Reference Framework being the basic strategic document for use of structural funds also in tourism in planning period of the years presumes its support above all within the scope of regional operational programme (support of public governance activities) and operational programme Competitiveness and Economic Growth (support of business activities in the tourism). Operational programmes directed by other departments: agriculture, environment etc. are also an option. Therefore, it will be necessary to pay attention to the coordination of selection of projects in order to achieve synergic effect of investments. It will be therefore necessary to consider the Regionalisation of Tourism as well as requirements of public service authorities on regional and local level in the evaluation process. The role of regional (SGR), town and municipal authorities in the evaluation process is therefore important. 2. SWOT Analysis of Tourism SWOT analysis as a general instrument shows possible alternatives of future development in tourism, possibilities for their use or, as the case may be, their solution. 15

16 SWOT ANALYSIS STRONG POINTS Most favourable conditions for mountain summer and winter tourism in Central Europe Preserved natural potential, flora, fauna, country's scenery, almost no natural disasters Diversity and variety of tourist attractions for diverse target group High numbers of national parks and accessible caves High numbers of historical memorial buildings, town memorial areas Cultural heritage, folk arts, music, customs, crafts, folklore, architecture, cultural events, festivals Unique conditions for spa and health tourism Good marked network of tourist paths throughout the whole country Equipment with personal mountain transport vehicles, artificial snow preparation (but in unsuitable quality and structure) Level of population's general education Favourable level of prices for foreign visitors SWOT ANALYSIS- WEAK POINTS Missing strong tourist image, low knowledge of Slovakia by foreign touroperators Unknown target destination for foreign visitors Unfinished transportation infrastructure of highways and fast railways High share of one-day and transiting visitors, low share of staying tourists Insufficient focusing of Slovak travel agencies on organization of inbound Possibilities to benefit from advantages Winter sports, summer hiking, offer of healthy natural environment, unique spa baths for healing of respiratory illnesses Offer of healthy natural environment with high level of protection of nature and land, concentration of very diverse natural values within relatively small area Strong destination management, differentiation of products in accordance with needs and expectations of target groups, goal-directed marketing focused on middle levels of clients Exploitation in healing and recreational forms of tourism Focusing on their permanent restoration and maintenance with help of European funds and their reconstruction for purpose of tourist exploitation Creation of new attraction and programmes, their use in marketing communication and equal localization throughout the whole territory Campaign for increase of participation in spa tourism, fitness, wellness, diversity of offer suitable for year round exploitation Active stay of a tourist in natural environment, mountain hiking, possibility to adjust the nature of the visited country to demands of the target groups Promotion of winter sports, planned reconstruction and renewal of out-of-date cable railways and ski lifts Coordination of schools' study plans with practical needs, retraining and increasing of motivation to change the approach to work in services Possibility to become holiday destination for numerous middle income categories of neighbouring and more distant countries Possibilities to remove disadvantages Long-time creation of picture of Slovakia as ideal holiday destination, study tours for foreign salesmen, market survey in sending countries, introduction of new image elements Preparation of new policy of promotion of Slovakia with stronger financial participation, new marketing activities of STB, regular collection and evaluation of expectations of foreign tourists from visits to Slovakia Completing the network of highways, increasing quality of railway and road network, air-connection of Slovakia to important sending countries Preparation of new products and packages of services for prolongation of stays, market behaviour of subjects in tourism, promotion of new activities, flexible price policy, marketing focused on individual segments of customers Motivation of domestic and foreign tour-operators with new economic instruments to import tourists to Slovakia, change 16

17 tourism and domestic tourism Insufficient maintenance of culturalhistorical monuments, insufficient accessibility of religious monuments Insufficient quality and structure of mountain transportation equipment in winter tourist resorts Unfinished network of local and regional associations and tourist information offices Uncontrolled development of tourism on local, regional and national level Insufficient number of complex tourist products Low costs of work in the businesses providing tourism services and migration of qualified employees abroad No knowledge of languages throughout the population of policy of hotels when taking care of foreign clients, completing of products in target locations Offer of suitable objects for rental or sale to suitable investors with possibility of their use for accommodation, solution of problems of accessibility of monuments by agreement with their administrators on providing of security of religious objects and their furnishing Support of construction and reconstruction of mountain transportation equipment with help of EU structural funds Preparation of Act on Creation and Financing of Tourist Associations, setting up of regional marketing offices of STB, looking for new sale channels to offer tourist products, setting up of local and regional associations with powers and resources for support of their activity Systematic preparation of conceptual and development documents focused on tourism development strategy for municipalities, regions and the whole country Enhancing of entrepreneurs to create them, cooperation with neighbouring countries, regions, municipalities and also strategic partners abroad To seek for solution to make the professions more attractive in cooperation with peer associations and employers Emphasizing the necessity to acquire knowledge of foreign languages, change of the attitude towards the education, increase the quality of language teaching in educational facilities Non-existence of tourism satellite account Solution of the project and financing thereof in accordance with methodology of OECD member states with aim of obtaining objective picture about the positive influence of tourism to country's economy Imperfect and non-uniform statistic recording of performances in tourism SWOT ANALYSIS OPPORTUNITIES Exploration of Central and Eastern Europe within the scope of European Tourism Exploitation of EU supporting programmes for completion of infrastructure and creation of new products Stimulation of middle levels of population to participate in domestic tourism Rising number of weekend travel in Europe Adjusting the methodology of statistic surveys in accordance with experience of EU, OECD and UNWTO countries with developed tourism in order to obtain background for qualified decision-taking, the methodology of data gathering in accommodation facilities shall be the base (not at border crossings) Possibilities to benefit from opportunities Joint offer of V4 countries in third markets (USA, Japan, China, India), creation of joint products, coordination of marketing approaches and charter flights Participation to new tenders and grant schemes prepared within EU, restoration of rural areas and keeping to the traditional forms of farming, completing of winter skiing resorts Improving of foreign currencies balance of tourism contribution into Slovak economy, creation of new jobs and big possibilities for major decrease of unemployment Investments in aqua parks, theme parks, organisation of regular cultural and social events to attract short-time 17

18 Contribution of tourism to stabilisation of economy in region SWOT ANALYSIS - THREATS Growing international competition in tourism market, limited possibility to break through Unpreparedness and non-existence of tourism development plans in regions and target locations visitors from neighbouring countries mainly Creation of new jobs, keeping of folk customs, folklore, crafts, stopping young people in leaving the rural areas, use of country houses for vacations Possibilities to eliminate threats Concentration on marketing offer differencing us from the other European tourist destinations, knowledge of our neighbours' marketing strategies, emphasizing our uniqueness Directing of state support into the regions and target locations of primary interest, participation of local and regional state authorities and local authorities in management of tourism Rising exchange rate of SKK against foreign currencies Decrease of demand in domestic tourism Support of creation of more affordably priced offers within the domestic tourism, marketing focusing on domestic tourist, introduction of vacation cheques Stagnant awareness of keeping of natural values in worsening environment Underestimation of human factor and professional preparation of employees in tourism Change of attitude of population towards the importance of keeping of natural values, looking for compromise solutions for tourism development in national parks and protected landscape areas in accordance with sustainable development Limitation of employment of unqualified labour, especially in management and in services, intense consultant and educational activity for starting entrepreneurs 3. Vision of tourism development in Slovakia until 2013 The tourism is considered worldwide to be one of the fastest growing industries. Tourism in Slovakia is not constituted as an industry in institutional meaning; respective legislation, institutional organisation, functioning organisational structure in regions, stable scientific base, comprehensive statistics, higher financial support for governmental promotion and marketing are missing. Up to this date no principles of state tourism policy has been adopted. Although the tourism is characterized as a cross-section industry with extensive participation of all departments, the management thereof is scattered and coordination of the individual departments from one place is missing. Influence of tourism enterprises and related industries on country's economy can not be measured in Slovakia because the tourism satellite account has not been set up yet. Despite the potential Slovakia possesses in the tourism, even when compared to the neighbouring countries, the development of tourism and subsequently its potential influence on creation of jobs, equalizing of the regional differences and last but not least on the overall economics of Slovakia are not sufficient. The comparison of basic indicators within V4 countries is documented in the following chart: The comparison of tourism development in Slovakia in relation to neighbouring countries or more precisely within V4 countries in 2005 documented by the following chart: 18

19 Czech r. Hungary Poland Slovakia Arrivals of foreign visitors (thousands) 100,466 38,555 64,606 29,396 Total number of tourists (housed) domestic foreign 12,362 6,026 6,336 7,731 4,008 3,723 16,597 12,287 4,310 3,428 1,913 1,514 Total number of overnight stays domestic foreign Average number of overnight stays (nights) domestic foreign 40,320 20,725 19,595 4,3 4,4 4,1 22,686 10,486 12,200 2,9 2,6 3,3 48,618 38,076 10,542 2,9 3,1 2,4 10,733 5,860 4,872 Foreign currency incomes from inbound tourism 3,725 3,433 5, (EUR million) Foreign currency expenditures in passive foreign 1,940 2,347 3, tourism (EUR million) Balance of foreign tourism (EUR million) 1,785 1,085 1, Share of inbound tourism in GDP (%) 3,8 n. a. 2,1 2,6 Share in export of goods (%) 5,9 6,9 5,5 3,8 Share in export of goods and services (%) 43,0 34,6 n. a. 3,3 Number of marketing agency's foreign representations Budget of marketing agency (SKK million) 271, If Slovakia intends to achieve benefits from tourism appropriate to its extensive natural and cultural potential, the Government of the Slovak Republic must have a clear vision of its development with perspective for the next years. Under our conditions such vision means that: Slovakia will be a country with dynamically developing tourism and offer of many types of products for domestic and foreign visitors; Slovakia will be also internationally accepted as a country providing quality and complete services of tourism, its presentation and propagation will be comprehensive and interlaced; Position of tourism in the country's economy will be stable, tourism will be coordinated, attention will be paid to tourism on all levels; Organisational structure of tourism from municipality and micro-region through region to self-governmental region (SGR) and state will be created and stabilised; Business environment for entrepreneurs in tourism will be stabilised so the legislation enables freedom of business activities; System of education of employees in tourism will be integrated; Legal regulations relating to tourism will guarantee long-term stable development of the industry with explicitly determined tasks' performers, their powers and liabilities and will determine conditions for creation of sources and budgetary financing of the industry, will efficiently provide for consumer's protection in tourism; Decision-taking processes will be decentralized so the particular problems are solved in accordance with principle of subsidiarity; Basics for exploration of new trends in tourism will be established, including regions, i.e. those places where the tourism is executed; More attention will be paid to the development of domestic tourism with support of disadvantaged income groups of population, thus more clients will be able to participate in tourism and better exploitation of tourism facilities will be achieved, especially in low season; 3,1 3,2 3,1 19