Possible loss of the tourism industry in Bulgaria in 2020. How to save the summer season?
Analyzing official statistics on tourism income and proposing measures to overcome the current situation. Is it possible to save tourism sector revenues without foreign tourists?
Due to restrictions associated with the coronavirus pandemic, which may last indefinitely, the tourism sector in Bulgaria faces a significant reduction in revenue. Closed borders, canceled flights, compulsory 14-day quarantine for everyone entering the country, restrictions on leaving other countries and a new set of strict sanitary rules at resorts – these are only some of the problems that the summer tourist season will face in 2020.
Due to the lack of foreign tourists, the tourism industry may be missing about 4 billion euros.
The annual tourism income in Bulgaria is about 5 billion euros, which is 8% of the republic’s GDP. Of these, about 4.1 billion euros, or 82%, are the income from foreign tourists.
Expenses of tourists in the Republic of Bulgaria by type of tourist services (euro)
|Products||Non-residents expenses||Residents expenses||Total tourists expenses||%|
|Tourists expenses||4 092 128||843 544||4 935 672||100%|
|End-use products specific to tourism||2 994 959||787 641||3 782 600||77%|
|Food and beverage service activities||1 122 887||242 251||1 365 138||28%|
|Accommodation services||848 021||198 313||1 046 333||21%|
|Transport services||477 164||224 062||701 226||14%|
|Services relating to cultural events||342 241||59 236||401 477||8%|
|Services related to tour operators and travel agencies||58 636||46 913||105 549||2%|
|Sports and recreation services||146 010||16 867||162 877||3%|
|Other end-use products||1 097 169||55 903||1 153 072||23%|
Most of all, the absence of foreign guests will affect:
1. The restaurant business, its turnover being about 1.4 billion euros per year, which is 28% of the income of the entire tourism industry. Possible losses - 1.1 billion euros (82%), which non-residents of the country spent in public catering. The expense from residents of the country is 245 million euros (18%).
2. In second place is the hotel business with a turnover of about 1 billion euros, which is 21% of the income of the entire tourism industry. The drop in turnover may amount to 850 million euros (81%), which foreign tourists paid for accommodation. Local tourists spent about 200 million euros (19%) on hotel accommodation.
3. The third place is held by the transport services with 705 million euros, which is 14% of the income of the entire tourism industry. Loss of turnover may amount to about 480 million euros (68%) – this was for how much the transport services were provided to foreign tourists. Residents of the country spent about 225 million euros (32%).
Expenses of tourists in the Republic of Bulgaria by type of tourist services (%)
|Products||Non-residents expenses||Residents expenses|
|End-use products specific to tourism||79%||21%|
|Food and beverage service activities||82%||18%|
|Services relating to cultural events||85%||15%|
|Services related to tour operators and travel agencies||56%||44%|
|Sports and recreation services||90%||10%|
|Other end-use products||95%||5%|
Summer season 2020: a good outcome is possible
The opening of borders between the EU countries will be able to influence the situation favorably, since 7.2 million or 57% of visitors come to Bulgaria from these countries, of which 2.5 million are for tourism purposes. Other countries account for about 42% or 2.4 million people.
About 2 million Bulgarians spend nearly 850 million euros on domestic tourism. About the same number of people prefer to vacation abroad - 2.2 million people. Bulgarians spend almost twice as much on holidays outside their country as citizens who prefer holidays in the country, which amounts to 1.5-2 billion dollars.
Thus, if all the Bulgarian citizens who were planning a vacation abroad choose their native Black Sea coast or mineral springs over Greece or Italy this summer, this will be the “lifeline” for the summer season.
If such a miracle happens, the tourism and related sectors will be able to maintain their business, thereby supporting the economy of their native country and the welfare of thousands of tourism industry workers. Businessmen themselves are discussing such an opportunity with skepticism.
What will the government do to save the industry?
Bulgarian government has proposed measures to support tourism related businesses to overcome the industry crisis. Among them are:
• vouchers for employees (mostly doctors and police) who had direct contact with coronavirus carriers, in the amount of 210 leva per adult and 100 leva per child, which can be spent in resort areas
• cancelling beach lounger and umbrella fees, but the concessionaires have the final say in this. In this regard, the Minister of Tourism proposes to reduce the amount of concession payment for beaches this year
• the long-awaited reduction in the VAT rate for the restaurant and tourism sectors from 20% to 9%. This measure will take effect in January 2021
• compensation of costs for charter flights in the amount of 35 euros for one plane seat, provided that these flights still take place
It is hard to imagine what the businessmen themselves - hoteliers and restaurateurs – will do. Will they lower the prices, make attractive offers that appease local tourists, or will they prefer not to open at all this year?
One can only guess whether the industry will be helped by measures taken by the government or patriotic Bulgarian tourists. We hope that tourism in Bulgaria, in spite of everything, will continue to develop. We’ll summarize the results at the end of the year.