Jan 12, 2007 - 2005). From 18 European countries, which are recorded in the WTO's list of top .... M - museums and art galleries, T - theaters and concert halls.
Urban tourism: benchmarking the strategies Maksym Ivanyna FUTURE Project on Urban Governance, Weimar University, Germany Bavarian Graduate Program in Economics, Germany Central European University, Budapest, Hungary January 12, 2007
Abstract This paper is the comparative analysis study of Central and Eastern European (CEE) and Western European cities regarding their policies towards attracting visitors. We consider the demand and the supply side of the urban tourism market, and where possible, present some numerical measures, which are then compared between the regions studied. Accepting the conjecture that the aggregation of these measures gives relevant picture of policies in general, we find that the tourism infrastructure in the CEE region is underdeveloped in almost all directions, while the most eastern country of our sample, Ukraine, is lagging even more behind. The competitive advantages of the CEE cities remain novelty, low price level and, to a some degree, facilities for young tourists.
1
Introduction
This paper is the comparative analysis study of Central and Eastern European (CEE) and Western European cities regarding their policies towards attracting visitors. Indeed, from one side, urban tourism has already proved its, at least, economical importance for the Europe. From the other side, CEE cities are relatively new players on the market, and in some of them, in our opinion, the authorities do not pay appropriate attention to the tourism industry, while the discrepancies with the state-of-the-art practices are obvious. In the paper we are trying to provide a complex approach for the issue. Namely, we consider both demand and supply side of the urban tourism market, provide some numerical measures on both sides, and conduct the comparative statistical analysis between CEE cities and the cities of the ”old” Europe. If one enters the phrase ”urban tourism” in the ScienceDirect search he or she will get about 60 links the papers, notes, reviews, and book references, most of them dated starting from middle 90s. This is not much in comparison with, say, ”foreign investment”, which results in about 500 links. 1
Indeed, until the middle 80s tourism was not perceived both by policymakers and by academia as a separate and important part of the city life. The main stress was then made on the manufacturing, which was bringing the substantial part of the revenue to the city budget. Therefore, there was no demand on the urban tourism research. However, the well-known trends in the world economy, which we consider in more details further on, led from one side to the relocating of most of the manufacturing to the developing countries, and from the other side to the permanent increase of touristic inflow to the cities. Although the policymakers started to realize the importance of the issue, systematic approach to the way cities should cope with the fastly expanding industry was absent. Only with the publication of the books of C.Law and S.Page ([17] and [18] correspondingly)we can say about the activization of the research on urban tourism. However, even after that the literature on the topic was dominated by mostly specific case studies and statistical reports, which were in addition published by a very wide range of sources due to unavailability of the specific journal. This made the research extremely diversified in methodology and partially dissolved in other areas, starting from consumption theory and finishing with the urban planning. Even worse the situation is with the analysis of the newly emerged markets in the Central and Eastern Europe. Authors were not able to find a scientific paper focused on the region, except the statistical reports and surveys issued by city tourist offices. We pursue two objectives in this paper. Firstly, we are trying to systemize available at the moment literature on urban tourism. Secondly, we are doing it with the emphasis on the comparison of Central and Eastern European and Western European cities. In doing so, we analyze separately the demand and supply sides of the urban tourism market, as well as consider the reasons to extend or confine this market in order to increase the welfare of the local people. While doing so, we conduct the benchmark analysis presenting some numerical measures both for the cities and countries from CEE and ”old” Europe, and taking Western European cities as an example to follow. Accepting the conjecture that the aggregation of these measures gives relevant picture of policies in general, we find that the tourism infrastructure in the CEE region is underdeveloped in almost all directions, while the most eastern country of our sample, Ukraine, is lagging even more behind. The competitive advantages of the CEE cities remain novelty, low price level and, to a some degree, facilities for young tourists. The demand structure also corresponds to above given conclusions: in general, the number of visitors per city inhabitant is higher in Western Europe, while the share of youngsters in visitors profile is higher for CEE cities. The importance of the raised questions is quite obvious nowadays. The World Trade Organization reports that the tourism services accounted for about 3% of the whole world’s trade volume
2
in 2005, with the annual growth rate of about 10%.1 The population, at least, in the most developed countries is getting old and richer, the transport becomes cheaper and more comfortable. As a result, the number of visitors increases even despite the threat of terrorism or pollution. At the same time, people also get more educated, which clearly leads to increase in the number of culture tourists, hence the trips to the cities. From the other side, already now, in a lot of European cities the tourism has become the major contributor to the local budget. The employment in touristic industry is steadily growing while the manufacturing migrates to the countries with cheap labour. Besides, the investments in the urban tourism development benefits also local inhabitants, as well as helps to attract new investments in addition to the tourists. Cities of Central and Eastern Europe are a special case in the tourism practice. Possessing quite substantial cultural heritage these cities were practically closed for the potential consumer from the developed countries during the cold war. Therefore, one should have expected the drastic increase in the tourist inflow to these cities after the democratic changes taking place in 1989-1991 in the region. However, it showed up that the success story was not irreversible ending for every place. The result depended deeply on the policy conducted by the state authorities. As a result, some cities, for example Budapest and Prague, did succeeded to become important players on the European touristic market, while lot of others are still lagging behind. The statistical benchmark analysis we conduct in the paper tries to locate the differences between the tourist practices of the ”young” CEE cities and the ”experienced” ones from the EU-15. The collection of the data and the conduct of research on urban tourism in general is connected with certain peculiar difficulties. First of them is that majority of potential data sources in this field is still closed for the public and is gathered for the inner research only. Even more, the publicly available data are hard to compare since different city agencies use different methodologies. At the same time, there is also no unified source of the qualitative data, since urban tourism has not yet singled out into separate research direction. Therefore, we had to use very diversified sources of both numerical and verbal information for writing this paper. The structure of the paper is the following. In the section 2 we give the general definitions of the tourism, classification of the visitors and city attractions. Section 3 shortly describes the advantages and the drawbacks of developing the tourism industry in a city. Section 4 refers to the demand and supply sides on the touristic markets. Firstly, we classify the visitors by the type of activity and age, analysis of their preferences in time spending. Then we investigate the supply side of tourism industry, i.e. city policies towards optimizing the flow of tourists. Finally, section 5 concludes. 1
See [4] for reference
3
2
General definitions
The world tourism has been developing at the impressive pace since 1950s. Even such tragic events like 9/11, tsunami in the Indian Ocean, wars in Jugoslavia and Iraq, many more terrorist attacks, earthquakes and environmental catastrophes did not prevent the aggregate number of the travelers from a steady growth at about 6.7% annually. Moreover, World Touristic Organization (WTO) predicts the industry to grow even further, and by the 2020 1.6 billion people are expected to make travels2 . Even though, the share of touristic inflow to Europe is decreasing over time, the old continent still dominates the market and forecasted not to give up its positions. Urban tourism in turn, being ever growing part of the world tourism, gains more and more attention on the side of researchers and policymakers. In order to continue with our research we have to give few general definitions. Namely, we define the word ”tourist” and present some simple classification of the travelers in the Section 2.1. Further we classify city attractions in the Section 2.2 and the very cities regarding availability of those attractions in the Section 2.3.
2.1
Classification of travelers
The figures of the WTO show distinctly the trends on a touristic market, however, it is not clear what is meant by the word ”tourist” there. Indeed, as it was mentioned in the introduction, the answer on this question is not the same for all institutions dealing with the tourism. Even the definitions used in US and Great Britain differ in a way, that in US only leisure travelers are accounted, while in GB any travel purpose is considered to be touristic. Apparently, any definition should be in line with the purpose of the study and numerical data available. We are interested in the tourists in a broader sense. Therefore, we adopt the British definition. The WTO proposes the division of the city’s current population, meaning all people present at the moment in the city, on four groups: residents, visitors, tourists and immigrants.3 While, although a bit tricky when it comes to details, the definitions of the residents and immigrants are intuitively understandable, visitors differ from the tourists by the purpose of their visit. Tourists make trips for their leisure, while visitors’ purpose might be called business. It includes conferences, conventions, summer schools, seminars, sport competitions, political events, etc. Visitors and tourists are the purpose of our study. At the same time, it would be also interesting to consider other two groups in the population, especially expatriates and international permanent students being residents. However, it will lead us to completely different research field. 2 3
See [11] for details Refer to [4] for the details
4
Table 1: City attractions
Primary attractions • • • • • •
theaters concert halls cinemas exhibitions museums art galleries
• sport facilities • • • • •
casinos night clubs bingo halls organized events festivities
• historical street pattern • interesting buildings •ancient monuments •ancient statues • ecclesiastical buildings • parks and green areas • water, canals • harbours
Secondary attractions • hotel facilities • catering facilities •shopping facilities •language • accessibility •parking facilities • tourist facilities • security
•liveliness of the place • local customes •folklore • friendliness
Source: Jansen-Verbeke [16]
2.2
City attractions
In the root of the whole theory of tourism stands one question: what makes people travel, in particular, why people travel to one city but not to another? We follow Jansen-Verbeke [16] in the classification of the city attractions. Namely, she divides them on primary and secondary elements. Primary attractions are those, which are usually the reason of why tourists will to spend their vacation in the particular city. Those include urban landscapes, historical buildings, culture events, museums, theaters. Secondary attractions consist of the hotel and catering facilities, shops, etc. Those are important in the tourist’s decision making, but the good quality of those is rather necessary then sufficient condition for the travel. Please, refer to the Figure 1 for more details. It is left to add that the division of the Jansen-Verbeke is quite arguable, and the line between the primary and secondary elements is getting more diluted. We go back to this issue in the Section 4.
2.3
Division of the cities
For the sake of more strictness in our benchmark analysis we are using the classification of urban areas, adopted by WTO and European Travel Center (ETC) in their report ”City Tourism and Culture: The European Experience” ([4]). Namely, they define 3 types of products proposed by these areas to the tourists: the cultural heritage, e.g. artifacts of the place relating to the past, the arts, e.g. contemporary performing and visual arts, and creative industries, e.g. design, fashion, contemporary architecture. By the size urban areas are divided into villages, towns, cities, and 5
Western Europe
Table 2: Division of the cities Towns Cities • Basel • Amsterdam • Bologna • Dublin • Helsinki • Hamburg • Oslo • Lisbon • Salzburg • Munich • Seville • Stockholm • Vienna
CEE excl. Ukraine
• • • •
Bratislava Riga Vilnius Zagreb
Ukraine
• Lviv
Metropolises • Berlin • London • Madrid Paris • Rome
• Bucharest • Budapest • Prague
•-
• Kyiv
•-
metropolises. Already by definition, villages usually possess only cultural heritage, and metropolises usually propose all three products. At the same time, towns and cities stand between the villages and metropolises and may specialize in a different mixes of products. We also sort urban areas by their geographical position, which in European case is rather stage of economical development than geography. Namely, we take cities from Western Europe (EU-15), Central Europe (new EU-10), and Eastern Europe (Ukraine). The choice of specific cities is made based on the availability of data and for assuring relative homogeneity in terms of attractions. Refer to the table 2 for the details. Obviously, there is no strict line between the categories exposed in the table. However, such a division allows us to assume homogeneity in touristic attractions inside the columns, hence the similarity to a certain degree of the urban policies towards the tourist industry is assumed. At the same time, geographical (and economical) division of the cities in the rows of the table allows us to track currently present discrepancies in these policies. Finally, we have excluded villages from our sample, and the metropolises are left only for the purpose of comparison.
3
Urban tourism: two sides of the moon
Some cities are trying to attract as much tourists as possible for any price, while some practically ignore the urban tourism as a promising industry. Obviously, the answer for the optimal policy towards the tourism in the cities lies somewhere in between these two extremes. As in any other market, the providers of the touristic product receive their profits, and at the same bear certain costs. In addition, the industry produces numerous externalities to the city, which can be referred both to the positive and the negative sides of the urban tourism. 6
In this section we consider two sides of the moon in the urban tourism: its positive as well as negative effects on the city and its residents. Firstly, we refer to the urban strategy schemes proposed by different authors. Then we analyze shortly the economics of tourism in general, and consider in more details the city tourism in this respect.
3.1
Economics of tourism
The reasonable amount of visitors in the city, as well as in the country, is clearly a win-win game: tourists spend their leisure time according to their preferences, while the touristic industry earns money, pays taxes to the state and creates new job places. Only in 2005 international tourism was generating about 2 billion US dollars per day.4 Moreover, in the case of international tourism the industry is basically the net exported services (and sometimes goods), which improves the countries balance account and leads to the growth of gross domestic product. The domestic tourism leads to the redistribution of the costs in the country. Usually, the tourism is developing in the regions, which are relatively less successful in fostering other industries. In many small and medium Western European cities, e.g. Salzburg or Seville, revenues from tourism constitute a dominant share of city budget. Development of the industry remains the only way to save this cities from bankruptcy and its residents from a forced migration. As a result, huge investments mostly from EU structural funds were made to amplify and improve the touristic infrastructure of the cities. In the CEE the situation with small cities is different. The thing is that the manufacturing is still alive there. Moreover, CEE countries are still experiencing a huge inflow of direct investments, and even new factories and plants are built. At the same time, due to the huge investments needed for tourism industry to bring enough profits, mostly for marketing the city internationally, and at the same time relatively low profitability of the industry and usual absence of the money in the city budgets the tourism in these areas is rather casual and considered unimportant. The role of tourism in the big cities of Western Europe is somewhat different. These urban areas have been able to keep the manufacturing on their territory. Moreover, the trade and finance services constitute a significant part of their economy. However, although to a lesser degree in the continental Europe, the usual problem of big cities is their decentralization. Indeed, due to the high rental prices, as well as to the traffic jams and higher general price level in the city center, the business is permanently moving to the periphery. It started from the the large trade molls, manufacturing and finishing now with the offices. The center is getting empty and the development of tourism is seen as a way of its replenishment. Small shops, museums, art galleries, pubs & restaurants, night clubs, etc are being built in the center in order to attract visitors. 4
See WTO’s ”Tourism Highlights 2006”[12]
7
Similarly to the small cities, the situation in the CEE countries is slightly different. Due to a various reasons, starting from a lesser density in the central area to a worse public transportation, the centers in the big CEE cities still remain vibrant and alive. Moreover, they still attract financing for a large investments projects, for example huge trading complex ”Arena” in Kyiv or ”WestEnd” in Budapest, which means that the profits from these projects are predicted by investors to be higher than the rent payments. As a result, tourism in these cities bears much less significance for the city authorities than it is in the Western Europe. The direct profits from the tourism is, of course, not the only its advantage for the city. As for any successful industry, the part of earned money is usually reinvested in the further development of touristic infrastructure. Some money are invested in another industries either by government and tourism entrepreneurs or by the tourists themselves, through using the accompanying to the tourism services, like shopping, banking, etc. Apparently, tourism industry contributes as well to the city budget in the form of paid taxes. Development of the urban tourism brings about few positive direct effects for the city’s residents. Firstly, the outbursting industry creates new jobs, hence lowers unemployment, the high level of which is becoming a real threat in the whole Europe.5 Secondly, the creation and renewal of the city’s attractions, both primary and secondary6 for the visitors clearly brings positive externality on the locals. Indeed, development of trade, transportation, organization of the cultural events, openings of new museums and art galleries are definitely increasing the welfare of the city inhabitants. In addition, even the investments in the marketing of the city abroad may attract not only tourists but also potential investors. Despite all the advantages of developing city tourism it is not hard to come up with the objections to the touristic ”enthusiasts”. Indeed, there are a lot of economical costs which the city and its inhabitants should bear in exchange of having crowds of visitors on the streets. Firstly, attracting tourists city authorities should expect overcrowded facilities, such as stuffed public transport, traffic jams, queues in shops, theaters and museums. From one side, it leads to slowing down of the life in city and decrease of the comfort level. From the other side, overusage of the facilities leads to their wearing off, hence additional investments for repairment might be needed. The same argument works with potentially big amounts of garbage on the streets. Even more important, probably, is that tourists usually attract pickpockets, drug-dealers, prostitutes, and even terrorists to the places they visit most frequently. Therefore, additional amount of investments should be devoted to maintaining sufficient safety level in a city. Large number of visitors may lead to the structural changes on the local markets. For example, it may lead to a general price level increase in the city. In particular, the real estate gets 5 6
Maybe, to a lesser degree in the CEE countries See the definition in the Section 2.2
8
usually more expensive in the popular districts. As another example, on the Crimean peninsula (Ukraine) the price of peaches and grapes, which are actually grown there, is 3 times higher than in the capital and other regions of the country. Similarly, the prices for national clothes and other attributes reach enormous levels in the touristic regions. At the same time, not only the price level is affected by the active development of the tourism. Namely, the boosting industry may make the region attractive for the immigrants7 , which in turn creates the pressure on the labor market and bids the wages down. Even the arguments of the tourism-defenders are criticized. Namely, it is claimed that the jobs created by the tourism industry are mostly low-paid, seasonal, part-time and low-skilled. Besides, it is also argued that the money invested in tourism could have proved to be more useful for local inhabitants when invested in something else, not in foreigners. But, although not without a sense at all, these claims could be attenuated at least for the cities. Firstly, tourism is much less seasonal in the cities, which leads us to more permanent jobs created, and secondly, as it was explained above, the investments in the touristic industry in the urban areas bring a lot of positive externalities to its local inhabitants. Qualitative assessment of the economic impact of the tourism industry on the city’s residents is one of the main tasks of the contemporary research in urban studies. As one can see above, due to the presence of a big amount of interconnected factors, which contribute both positively and negatively to the city’s welfare, this task gets very complicated. The estimation of the impact is out of the scope of our paper, but we may note that the task becomes even harder when, in addition to economical factors, one consider social impacts of tourism on the city’s society.
3.2
Social costs and benefits
There are few more, less tangible than above-mentioned monetary, factors, which one would be recommended to consider before developing the urban tourism. The political and social challenges the society may face under the pressure of the tourists’ inflow are much harder to estimate than return on investment, but the results the estimation may prove much more important for the city in the long-term. The social changes in society under the influence of foreigners may very well be positive. Acceptance of the tourists and showing them the city with its culture, traditions and the way of life certainly leads to a better understanding between nations. Tourists, impressed or at least acquainted with how thing are going on in the city, might come back there, but as a businessman with investments. In addition, the pressure from abroad may lead to a cultural consolidation of the region, strengthening of the national identity and patriotism. 7
Not only from abroad, but also from other regions of the country
9
In the worst case, however, things can go in the opposite direction. Complete unacceptance of the indigenous way of life may create a deep gap between tourist and local inhabitant. At the same time, customs and traditions may turn from a patriotic act to a cheap simulation, way to earn money. Moreover, in many cases the tourists and local residents are kept segregated, and the only locals, who meet foreigners, are low-paid staff in the hotels and restaurants. Therefore, no cultural exchange is happening. There are a lot of other negative social trends happening with the development of tourism. For example, large inflow of foreigners in the city may change the original way of life of its inhabitants. One may argue that, especially for the young people, this may be for good, since they become more global, but this phenomenon certainly leads to the resentment among older people. In addition, tourists in the host country may behave completely differently from the way they do it in their motherland. It is enough to look at the football fans following their team in international competitions, or to mention who are the biggest consumers of the children prostitution in Thailand. It is left to add that the social issues in the frame of Europe are still less important than they are in the touristically-attractive undeveloped countries. Indeed, the cultural gap between European nations8 is not that big, and the touristic attractions in the cities usually assume the involvement of the tourists in the city’s everyday life. However, tourist’s behavior, their influence on the original way of life, living in the open-air museum at the end causes significant levels of resentment among the local population. In this case, people weight the economical benefits, which they get from tourism, with the discomfort tourism poses on their lives. As of now, surveys conducted in different cities of Europe show that the level of resentment is quite moderate, and people do not usually think of tourism as of something bad for their life.9
4 4.1
Demand and supply on urban tourism market Structure of demand
World Tourist Organization, [5], reports, that after a small decline of the inflow after 9/11, the number of international tourists in Europe is growing again. In 2005 the growth was about 4.6%, comparing with 5.1% in 2004 and 0.7% in 2003. About 450 million people were reported by the national tourism agencies to arrive in the European countries in 2005. 19% of these people were visiting Central and Eastern Europe. In terms of growth rates this region shows the best performance on the continent, increasing visitors’ inflows by about 10% annually (in 2004 and 2005). From 18 European countries, which are recorded in the WTO’s list of top emerging tourism 8 The major consumers of the European tourism are the Europeans themselves, and people from US, Japan, Canada and Australia 9 See [14] and [15] for more details on the surveys
10
Western Europe
Table 3: Load degree of the cities Towns Cities • 4-6 • 6-11
Metropolises • 6-15
CEE excl. Ukraine
• 1-3
• 3-5
•-
Ukraine
• 0.2
• 0.5
•-
Source: TourMIS [9]
destinations in 2004 ([6]) 11 are from CEE region, while only 2 represent ”old” Europe. At the same time, TourMIS database ([9]) contained in 2005 1,7 billion records on the nights spent in European cities’ hotels and other costly types of accommodation. Again, the fastest growing urban tourism destinations are in CEE region (maybe, except Czech Republic). Table 3 shows the load degrees of European cities by visitors in accordance to our categories.10 As a measure we took the number of nights spent by the visitors in a city divided by its population. It can be easily seen that while the numbers are increasing from the towns to metropolises, CEE cities show clearly lower load degrees than their Western European counterparts. From one side, it testifies about the fact that tourism does not play yet too significant role in economical life of the CEE region. From the other side, it becomes obvious, that CEE cities have potential to accept much more visitors than they actually do now. No surprise, that already nowadays the number of visitors in these cities is growing at two-digit rates. Apparently, the further dynamics will depend on the cities’ policy towards urban tourism. At the same time, successful policies should reflect the demand on the visitor’s market. 50% of international visitors travel to another countries with the purpose of tourism and leisure (”Tourism Highlights 2006”, [5]). This number is slowly decreasing with time (in 1990 it was 56%), while the number of business travelers grew from 14% in 1990 to 16% in 2005. The profile of leisure tourist in Europe was thoroughly studied by IPK International [3] and ATLAS [1]. These institutes found out that typical urban traveler in Europe is quite similar to the customer of cultural products in general. It is usually middle-age professional or manager with higher education and high income. At the same time, the proportion of young (under 30) tourists is also increasing and constituted about 27% in 2002. The tourists are usually attracted by old monuments and buildings in the city, as well as its museums and art galleries. At the same time, such factors as the possibility to meet new people or availability of pleasant environment in the city become more and more important. As much as 20% of respondents name them as one of the reasons to visit the city. Obviously, these trends extend the scope of actions city authorities may do in order to attract visitors. 10
See Section 2.3 for details
11
The profile of the one who travels to CEE cities is a bit different from those who prefer Western Europe. Namely, the consultancy company KPMG in its survey, [10], found out that the average visitor of CEE city11 is younger (26% of those who visited Prague in 2006 were younger than 25 years) and has lower income. Museums and architecture are still dominating in the list of reasons to travel to a certain city, at the same time entertainment obtained a bigger share of supporters. The number of business events increases with each year, attracting more and more visitors to the cities. For instance, Union of International Associations reports about 9000 international meetings taking place in 2005 in 1468 cities all over the world. Judging from the survey, conducted by Coopers & Lybrand Deloitte Tourism Leisure Consultancy Services in 1990 ([?]), there are four main reasons behind the choice to organize the event in a city. Firstly, city should possess high standard conference and accommodation facilities. Secondly, the prices are important. Thirdly, the city should be easily accessible, especially if the participants are coming from various parts of the world. And finally, the fourth by importance factor is the attractiveness of the area, i.e. availability of qualitative primary attractions. As it can be seen from the previous paragraph, primary attractions do not play the main role in attracting business visitors. Moreover, in the surveys of Eurobarometer [2] among leisure tourists in 2002 almost 40% of responders were motivated (among other reasons, apparently) to travel to a particular place by the quality of and prices on traveling, living, accommodation and food, as well as by the safety level and easiness to get there. Therefore, it is obvious that successful city policy on attraction of the visitors should include the development of primary attractions but also investments in extending and improvement of secondary attractions as well. Even though the good quality of those is usually not sufficient for defining the choice of potential visitor, but it is certainly becoming necessary. Besides, even the conceptual boundary between primary and secondary attractions is becoming blurred. Indeed, it is worth to recall the super fashionable hotels (made of ice or built under the water), which are attractions by themselves, or the ”miracles” of international trade, when millions of people travel to other countries for shopping, like it the case with Polish and Hungarians visiting Ukraine for buying cheap petrol, alcohol and cigarettes, or Italians buying cheap leather jackets in San-Marino. Concerning the demand for secondary attractions, in particular transport, WTO reports, [12], that about 45% of all international travels were made by air, 43% by road, 5% by rail and 7% by water. In case of European urban tourism the role of trains increases, while the automobiles are used a bit less frequently. The importance of planes and ships remains the same. Besides, foreign tourists usually walk or use public transport to get to attractions in the city, while domestic 11 In their research only Prague and Budapest are considered, but the trends could possibly be extended on the whole region
12
Western Europe
Table 4: Primary attractions of the cities Towns Cities M 45-100 T 20-30 M 50-120 T 30-40
Metropolises M 100-180 T 40-60
CEE excl. Ukraine
M 20-60 T 9-20
M 60-70 T 15-20
M -T -
Ukraine
M 13 T 6
M 60 T 39
M -T -
M - museums and art galleries, T - theaters and concert halls Source: City Tourism Offices
tourists drive a car or take local trains. The hotels and bad & breakfasts remain the most popular kinds of accommodation in the urban areas among visitors. At the same time, more and more youngsters use hostels (13% of those younger than 30 years, ATLAS,[1]).
4.2
Benchmarking of the cities’ policies
Even though the tourism industry is expected to grow in the nearest future, European cities will certainly engage in competition with each other for the visitors. Indeed, WTO promises 3% annual growth in visitors, but supply of touristic products is obviously wider. CEE cities grow nowadays much faster than the ”old” Europe, at the same time top-popular cities are expected to slow down since they have been using their traditional image for too long. Tourists have a preference for novelty, and in the age, when it is cheaper to fly to any point of Europe from hub airport than to get to this airport from the city center, people prefer new destinations to Eiffel Tower or Coliseum. From the other side, no place can use such factor as novelty for a long time. Therefore, in order to have stable inflow of tourists cities have to work in at least three directions: enrich and improve their cultural heritage (primary attractions), refine the secondary attractions, and of course, promote and advertise the city in all its beauty. We are proceeding now with comparative analysis of this three directions between CEE and Western European cities. 4.2.1
Primary attractions
The attractiveness of monuments and historical buildings, which are usually the most popular primary attractions, is difficult to measure numerically and improve. The only thing city authorities can do is developing museums, art galleries (which are also very popular among tourists), theaters, concert halls, introduce new festivals, fairs, sport events. In the Table 4 we compare the average amount of museums, art-galleries, theaters and concert halls going from town to metropolis and from Western Europe to Ukraine.
13
It can be easily seen that the average number of museums and art-galleries, as well as theaters and concert halls, is usually greater in the Western European cities than in CEE cities of the same category. The number decreases with the category too, which is not surprising though. The scale of discrepancies is impressive: from 13 museums and art-galleries in Lviv to about 180 in Paris. No doubts, this number approximation is not a perfect estimator of the city’s attractiveness. The quality of the services is much more important and should be taken into consideration. However, these numbers testify about the existing difference between the urban areas and big potential of, mostly, CEE cities to extend their primary attractions infrastructure. Concerning the entrance fees, the trend here is quite similar: starting from expensive, 20 Euro per person, tickets to visit Emperor’s palace in Vienna, through moderate, 4-7 Euro, entrance fees in CEE cities, and finishing with, usually, less than 1 Euro fees in Lviv and Kyiv. 4.2.2
Secondary attractions
Transport, accommodation, shopping, catering are, probably, not the heaviest factors for tourist when choosing the final destination. However, at the time when hundreds of cities possess terrific and must-see primary attractions, the secondary elements of the choice gain much more weight. In order to be competitive on the tourism market, therefore, it is absolutely necessary for the cities to maintain good quality of these supportive services. We consider the state of affairs in this sphere nowadays. The quality of the transport connection both inside and outside the urban areas is constantly increasing. The European cities are firmly connected with each other by the railways, highways, air and water. Not surprisingly, the quality of the roads, speed and frequency of the trains are decreasing moving from West to the East. However, the prices are getting lower too. For instance, one should pay around 55 Euro for 3 hour train trip in Germany, in Hungary such adventure would cost about 15 Euro, while in Ukraine it will be not more than 5 Euro. The same concerns public transportation: here the price differential may reach 15 times (from 0.2 Euro for one middle-distance trip in Lviv to about 3 Euro in London). Air transportation is getting more weight in tourism industry nowadays, especially when the low-cost airlines, such as EasyJet, WizzAir, SkyEurope, RyanAir, etc. began their fast growth. With prices, which are comparable to the fees for medium-distance train transportation, the potential tourists are always not more than 2 hours away from even the most remote parts of Europe, which makes distance negligible on the stage of decision. For example, British students use to travel from London to Budapest to spend the night in its night clubs, and then go back with the morning plane. What is more interesting is that this trip costs them less than going out in London! In the Table 5 one can see the state of ”air affairs” in different categories of cities. As a proxy we took the
14
Western Europe CEE excl. Ukraine Ukraine
Table 5: Secondary attractions of the cities Towns Cities A0-23 H30-60 A5-20 H60-140 Y 2-15 Y 20-80 A1-49 H15-35 A20-40 H40-100 Y 3-22 Y 35-120 A0 H10 Y 1 A0 H27 Y 3
Metropolises A31-40 H150-450 Y 60-216 A-H Y A-H -Y -
A - cheap airlines connections, H - hotels, Y - youth hostels Source: City Tourism Offices, web-sites of airline companies, www.worldhostels.com
number of the cities connected with the given one by one of the cheap airlines.12 Certainly, these numbers do not reflect fully the situation with transport in the city, but they are clearly indicators of how easy is it to get to it. Except metropolises, which possess the hub airports, situation in the rest of the table looks quite complicated. Such cities from CEE region as Budapest, Prague and Bratislava can definitely compete with the metropolises in accessibility, while the level of the rest CEE cities is lower than in Western Europe. At the same time, such cities as Vienna, Munich, Helsinki do not accept cheap airlines at all. Finally, Ukraine is still not the part of the system. Both Kyiv and Lviv possess international airports, but the flights from there are much more expensive (for instance, 40 minute flight from Lviv to Warsaw costs about 230 Euro). The situation is the same with international train transits: even though the inner railways are the cheapest in Europe, due to the absence of international agreements, crossing the boundary may be very costly for a tourist. In the Table 5 we are also giving the information on the accommodation in the cities. It is seen straight away that Western European cities provide proportionally more places to spend the night with high comfort.13 Only Budapest and Prague from CEE region can be compared to the ”old” Europeans in this relation. With an average of 250 highly comfortable hotels, the megapolises are out of competition in this sector. At the same time, Ukrainian cities are again lagging behind their groups. It is worth to note, that the availability of the qualitative accommodation complexes is correlated with possessing conference venues of substantial capacity, which in turn is the main attraction for international organizations and business visitors. Indeed, Paris with its almost 400 fashionable hotels hosts about 300 international meetings annually.14 London, Vienna, Barcelona, Brussels and Copenhagen are in top 10 too. Budapest, being the first from CEE cities, is only on the 21st place. 12
EasyJet, SkyEurope, WizzAir, RyanAir In 3 and more stared hotels 14 Data of Union of International Associations,[8] 13
15
Youth hostels, although being economically not very significant for the city, also play an important role in its development as a visitor’s attraction. 30% of the young visitors choose this cheapest way to spend the night in the host city.15 Attracting young people may, from one side, contribute to the refreshing of the city’s image, and from the other side, lead to a potential growth in the future, when these youngsters become older and want to come back. The European market of hostels is different from the market of higher-ranked types of accommodation. Here CEE cities, especially Budapest and Prague, seem to grasp the niche of the cheap tourism. They propose wider availability of the hostels than their peers from Western Europe. In addition, unlike the hotels sector, where prices for accommodation do not vary very much with the region, the level of the hostels’ prices in CEE cities seem to be lower than in ”old” Europe (starting from 6 Euro per night in Riga). Such a pattern only support the research of KPMG [10] on a profile of tourists traveling to CEE region: they are, usually, poorer and younger than the ”westerners”. Finally, it is worth to note again that Ukrainian cities are lagging behind from their counterparts in this sector. The last table,6, of the section includes rankings of the cities in terms of quality of life and cost of living. Both of them were compiled by Mercer Human Resource Consulting ([13], [7]) in order to create orienting points for multinationals towards rewarding their expatriates. However, the rankings can be used also as indicators of the city’s attractiveness to the tourists, since most of the factors estimated by them, including general level of prices, cost of accommodation, transport, catering, state of environment, safety, etc, are also influencing the choice of the potential visitor. As one can see from the table, the Western Europe is much ahead of CEE region in terms of quality of life. There are no cities at all from this region in the top 50 of the ranking. At the same time, Prague, Kyiv and Bratislava enter top 50 of the Cost-of-Living ranking. Even though the ”old” European cities are still more expensive, this fact clearly testifies about some degree of disparity between quality and price in these three cities. The results in the table are supported also by the survey of KPMG ([10]). Indeed, when the respondents were asked to rank from 1 to 5 different factors in Vienna, Prague, and Budapest, the following results were obtained: Vienna was perceived as the safest place, with the widest availability of hotels, transport infrastructure and restaurants, while Budapest and Prague were considered to be cheaper. 4.2.3
Marketing
The last section of our policy analysis concerns marketing of the city on the international market of tourism. Being unsustainable by itself, this function nevertheless should be indispensable to any strategy having on a purpose attraction of the visitors to the city. As it follows from the ATLAS surveys ([1]), the most popular sources of information for future travelers are family and friends 15
See section??
16
Western Europe
Table 6: Cost and quality of living in the cities Towns Cities Q5-31 C8-25 Q4-50 C18-40
Metropolises Q16-39 C5-21
CEE excl. Ukraine
Q - C48
Q - C50
Q-C -
Ukraine
Q-C -
Q - C21
Q-C -
C - cost of living rank, Q - quality of living rank ”-” means that the city is not in top 50 Source: Mercer Human Resource Consulting, [13], [7]
Western Europe
Table 7: Marketing of the cities in Internet Towns Cities Q8-45 G1060-1240 Q9-80 G1000-1300
Metropolises Q2-104 G1600-25900
CEE excl. Ukraine
Q90-130 G700-1000
Q90-130 G600-1230
Q-G-
Ukraine
Q - G520
Q - G824
Q-G-
Q - quality of website rank, G - number of links in Google-search (thousands) ”-” means that the city is not in top 130 Source: www.google.com, E-City Award, www.citymayors.com/features/e-cities.html
31%16 , internet - 19%, and guide books - 17%. Therefore, spreading information, at least, in these sources would be recommendable for any city in order to be competitive on the market. The quantification of the marketing policies is quite challenging and ungrateful task. Indeed, these are usually discretionary, and their effects are usually intangible. However, we present some data in the Table 7. Namely, one of the estimators we claim to be assessing the effectiveness of marketing policy of the city in internet is the number of hyperlinks Google search engine utters when the query is ”city tourism XXX”, where XXX is the name if the city. As one can see from the table, CEE cities predominantly yield to their counterparts from ”old” Europe in this measure. A usual story is that the cities from Ukraine are the worst internet promoters in their categories. Second number in the table is the trial to estimate the quality of the web-sites, provided by the city tourist offices. Namely, we use corresponding ranking compiled during the E-City Award project in 2003. Again, ”old” European cities, obviously, devote more time to their internet promotion than the CEE cities: their web-sites are always ranked higher. Combining the good quality of the web-content with the wider network of links creates a considerable competitive advantage of the Western European cities before the CEE counterparts. The list of gaps in the promotion policy of CEE cities, especially Ukrainian ones, may be continued. For example, there are still no guide books for Ukrainian cities, published by the Lonely 16 Family and friends, however, should not be considered as a primary source of information, since these ”advisors” were also attracted to the city for some reason
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Planet or at least sold internationally. One can find 5 books, that are sold on Amazon, and are about Ukraine in general. All of them were first published not earlier than 2005. At the same time, European tourism agencies sometimes are not fully acknowledged of what they really sell to their clients. For example, the Budapest spas, the city’s most magnificent attraction, are advertised only by 30% of the tourism agencies in Europe, when the discussion is about Budapest.
5
Conclusions
Urban tourism is becoming more and more important part of the average European city. In some cities it is the biggest industry, in some it is used to revitalize the city center, reshape the image. Urban tourism induces investments in the cultural products like museums, theaters, festivals, sport arenas, cultural centers, as well as investments to the city’s infrastructure, like roads, banks, shopping, internet access points. Cultural tourism as well as business visiting increases international understanding, helps to establish business connections. Therefore, despite certain disadvantages tourism poses on the city’s inhabitants, urban areas in Europe are eager to develop this industry in the reasonable boundaries. Although the touristic inflow into Europe is predicted to grow with time, the supply of qualitative cultural product on the continent grows even faster. The cities of Central and Eastern European countries are forecasted to grow at the higher rates than the rest of the region. From the other side, the effect of novelty, which is ascribed to these cities as their main advantage, is easily exhausted. Vibrant development of cheap airlines, and the overall population income growth makes the development of urban tourism practically independent of such exogenous factors as distance, and relies totally on the policy the city authority conducts in order to attract more visitors. In the time of global, at least in boundaries of Europe, competition for the tourists, the line between the primary attractions, like history, architecture, museums, culture, theaters, etc and secondary attractions, like transport availability, quality of accommodation, shopping, catering, is getting blurred. Cities need to develop and progress in both directions in order to be competitive on the market. Besides, the effective promotion campaign of the city should be executed. CEE cities, as the main competitors of Western Europe for tourists now and even more in the future, are lagging behind their counterparts nowadays in a lot of aspects. The number of tourists per city resident is generally lower in ”new” Europe, which means that the cities have still the capacity potential and, at the same time, conduct not too effective policy of attraction. CEE cities yield to their counterparts in the number of museums and theaters, the historical buildings and monuments are much less renovated. At the same time, the entrance fees and prices of tickets are lower. The secondary attractions offer quite a complicated picture in terms of competitive advan18
tages. Land public transport is faster and more frequent on the West, while further to the East the price for its usage decreases at a fast pace. In many cases, like in Ukraine, the quality is certainly compensated by the price. The air connection is reasonably good in all parts of Europe. Ukrainian cities as well as some of ”old” Europeans are not connected with the cheap airlines, while some CEE cities can compete in this relation even with such megapolises as Berlin, Rome and Paris. Expensive accommodation is clearly in a better condition in Western Europe, attracting not only the most spending tourists but also a lot more conferences and conventions, then the CEE cities do. At the same time, cheap hostels for youth clearly developed better in CEE cities (and megapolises). Ukrainian cities, the most eastern from the sample are lagging far behind in terms of accommodation, possessing week system of fashionable hotels, and almost not having hostels at all. In terms of marketing there is clear underperformance of CEE cities in that relation comparing with their peers in Western Europe. In particular, the quality of internet promotion of these cities is worse in all dimensions. Again, Ukrainian cities in that relation are even more behind. In conclusion, it is worth to note that already now the competition for tourists in the Europe forces cities to innovate and create authentic cultural product, which attracts visitors particularly to this place and makes them want to come back again. CEE cities, and especially Ukraine, have a harder task. From one side, they are lagging behind the Western Europe in terms of even basic tourist attractions, and have to develop at a fast pace those in order to catch up with competitors. From the other side, these cities are also supposed to work on innovative elements in their image. The factor of novelty, which attracts visitors to these cities despite certain drawbacks in tourism infrastructure, is bound to serve as a magic stick in their few-years transitional period. Apparently, in such situation the outcome of the competition will depend totally on a tourism attraction policy conducted by the city authority.
References [1] Surveys on tourism. The Association for Tourism and Leisure Education (ATLAS), www.atlaseuro.org, 2001. [2] Eurobarometer 2002. European Commission, Brussels, 2002. [3] European Travel Monitor Survey. IPK International, 2002. [4] City Tourism and Culture: The European Experience. World Tourist Organization, European Travel Commission, Brussels, 2005. [5] World Tourism Barometer, Volume 3, No 3. World Tourist Organization, www.unwto.org, 2005. 19
[6] World’s Top Emerging Tourism Destinations 1995-2004. www.unwto.org, 2005.
World Tourist Organization,
[7] 2006 Quality of Living Survey. Mercer Human Resource Consulting, www.mercerhr.com, 2006. [8] International Meeting Statistics for the Year 2005. Union of International Associations, 2006. [9] Marketing-Information-System for tourism managers. Institute for Tourism and Leisure Studies at the University of Economics and Business Administration in Vienna, www.tourmis.info, 2006. [10] Perception by and Attractiveness to European Tourists of Budapest Prague and Vienna. KPMG, 2006. [11] Tourism 2020 Vision. World Tourist Organization, www.unwto.org, 2006. [12] Tourism Highlights 2006. World Tourist Organization, www.unwto.org, 2006. [13] Worldwide Cost of Living Survey - 2006. www.mercerhr.com, 2006.
Mercer Human Resource Consulting,
[14] J. Van der Borg and G. Gotti. Tourism and cities of art. UNESCO/ROSTE Technical Report, 1995. [15] E. Gerritsma et al. Vorming van Europees Immigratie- en asielrecht. WODC, Den Haag, 1999. [16] M. Jansen-Verbeke. Leisure, Recreation and Tourism in the Inner Cities. Netherlands Geographical Studies, Amsterdam, 1988. [17] C. Law. Urban Tourism: Attracting Visitors to Large Cities. Mansel, London, 1993. [18] S. Page. Urban Tourism. Routledge, London, 1995.
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