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Bulgaria Tourism Report 2011
Business Monitor International, Nov 2010, Pages: 44
Bulgaria Tourism Report provides industry professionals and strategists, corporate analysts, tourism associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Bulgaria's tourism industry.
Tourism Overview
Over the first eight months of 2010, Bulgaria welcomed 6,128,790 tourists, according to figures released by the National Statistical Institute (NSI). This represented an increase of just less than 6% year-on-year (y-o-y) on the 5,778,032 tourists that visited Bulgaria during the same period of 2009. This headline figure includes 1,658,068 transit passengers over January-August.
Looking at the most recent available official data (from August 2010), Germany was the most important source market for Bulgarian tourism (supplying 243,743 tourists over the month), followed by Romania (192,412), Turkey (163,971), Greece (109,798) and Russia (87,461).
The rebound in tourism numbers is an encouraging sign for Bulgaria, which launched major marketing campaigns in 2010.
Forecast Scenario
BMI is bullish about the long-term outlook for the Bulgarian tourism sector. We were pleasantly surprised by the strong growth in tourism arrival numbers over 2010 and believe this upwards growth trend can continue over the whole of our newly extended forecast period to 2015. We believe that the Eastern European market, notably countries such as Russia and Poland, will become ever more important, to the detriment of former strong source markets such as Greece and the UK. Greek travellers are currently suffering from their own country’s economic problems, which will limit their ability to travel abroad over the short term. Sentiment towards Bulgaria from the UK market has been coloured by sharp falls in the value of Bulgarian investment properties and media coverage of alleged food poisoning cases at hotels, which may take some time to recover.
New Marketing Campaign Launched
In August 2010, Bulgaria launched a TV advertising campaign aimed at promoting inbound tourism. In September-December 2010 and January-March 2011, a series of adverts will be shown on the National Geographic Channel, the Discovery Channel, Euronews and Eurosport.
The BGN7.5mn campaign is being funded by the Ministry of Economy, Energy and Tourism’s regional development programme and will show the range of tourism options offered in Bulgaria. The adverts will be shown in Bulgarian, English, German, Russian and French and the government hopes the campaign will reach about 608mn European households.
In addition to this pan-European marketing drive, a September 2010 report by the Sofia News Agency said that Bulgaria is also launching a marketing campaign targeted at Russian tourists. Russian inbound tourism to Bulgaria soared in 2010, with many Russian tourists looking to buy holiday homes in the country. Speaking at the Fall Tourism Expo in Moscow, the Bulgarian Deputy Minister of Economy, Energy and Tourism, Ivo Marinov, said the advertising campaigns will focus on sea and ski tourism but will also touch on ‘cultural, spa, wellness, eco and rural tourism’.
Potential VAT Increase Is A Concern
Media reports in August 2010 suggested that the government is considering changes to the level of VAT levied on tourism services. Organised tour groups pay a 7% tourism VAT rate, with the regular 20% VAT rate levied on individual travellers. The government has suggested these two rates be equalised at 14% for organised tours and individuals.
Unsurprisingly, domestic tour operators have reacted negatively to this proposal, saying that they have already signed contracts with foreign tour operators for the 2011 season based on the current VAT rate and expressing anger that the first they heard about the news was when it was announced to the media. Donoka Sokoliva, the chair of the Bulgarian Association of Tourist Agencies (BATA), was also quoted in local media as saying that the government had promised to maintain the current levels of VAT ahead of the elections in 2009.
Any move to raise VAT for organised tours would be a negative for the Bulgarian tourism industry, so it is hoped that the government can talk with key stakeholders from the tourism industry and reach some form of compromise.
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