Marketplace Government’s bill on tourism to introduce structure to Czech destinations’ marketing
The Czech Republic is struggling to maintain its position on the global tourist market. With some 8.7 million visitors in 2011, the country ranks below other destinations in central and Eastern Europe, such as Austria, Poland and Hungary. What’s more, most tourists rarely venture outside Prague during their relatively short stays. The government says this is partly because the country’s travel industry lacks a clear structure when it comes to marketing and promotion. To address the issue, it has come up with a new bill on tourism.
The travel industry is an important part of the Czech economy, providing at least 250,000 jobs and generating around 3 percent of the country’s GDP. Though, the industry has been hit by the global financial crisis in recent years, in 2011 the number of foreign visitors again reached pre-crisis levels of around 8.7 million. However, those who did come stayed for shorter periods of time and spent less money; increasingly, people only visited the capital.
A government analysis says the Czech Republic’s tourism potential could be reaching its limits, and points to a lack of a single system of management of the industry. The Ministry of Regional Development has therefore come up with legislation that should build a fresh structure to manage destinations, with a view to helping promote them abroad. Aleš Hozdecký is the head of the travel industry department at the ministry.
“It’s really about building up a good regional system of the so-called destination management organizations, or DMOs, that is structures which ensure cooperation of the public and private sectors which should cooperate on tourism marketing and tourism strategies, spending public and private money on this. That’s our biggest challenge we have to tackle right now. That’s the reason why we have prepared new legislation which will now be discussed in the government.”
The bill introduces three levels of management destinations – national, regional, and local. Mr Hozdecký says the system is very much inspired by a successful Austrian model that seems to fulfil its main goal of attracting visitors to a number of destinations located in various parts of the country.
“The national DMO (destination marketing organisation) is still going to be the state agency which is financed by our ministry, the Czech Tourism organisation. The organisations of destination management in the regions should be supporting the functions of the national DMO. There are two other levels under the national level; the level of official Czech regions (kraj in Czech) would basically work with a corporation of regional governments and the third level would be the level of tourist regions built on natural, geographic or historical surroundings like Bohemian Paradise, Krkonoše Mountains or Slovácko in Moravia.”
The three levels of the new system will have different roles – the umbrella state-run agency on top will be responsible for the international marketing, while local units will promote their destinations at the national level.
“The lowest level, the level of the tourist region is starting up national promotion and marketing. The regional level should be a great supporter of the national level and incoming marketing. Trying to find out how to support it financially is the biggest problem because if we take the Austrian system for example, they have a great system of financing. In fact there is a special tax for enterprises which work in tourism. But in this situation we can’t replicate it totally so the system of financing will be a little bit different to start with.”
The 14 Czech regions, including Prague, have set up their own tourist promotion agencies. The new system should re-focus their activities to address markets in neighbouring states more, while the national agency Czechtourism should still play the leading role for countries further away such as the UK, the US, Russia.
The ministry is planning to spend some 200 million crowns on the creation of the structure, on top of the 400 million earmarked annually for the budget of Czechtourism. In time, the ministry hopes to secure additional funds from EU grants as well.
Concerted efforts at different levels are expected not just to bring more tourists to the Czech Republic but to encourage them to stay longer and visit other regions than Prague and the few destinations such as Český Krumlov and Karlovy Vary that are already popular with foreign visitors. One of the strategies focuses on monuments included in the UNESCO’s list of world heritage.
“Last year we celebrated 20 years since the first Czech monuments were included in the UNESCO World Heritage List; now there are 12 of them. This is one of the ways in which we want to show foreign tourists more of the country outside of Prague – they are really amazing places.
“We also want to highlight some great Czech traditions, for instance what we call folklore. I also think that good and interesting Czech cuisine is making a comeback; regions are now able to offer more than just pork, dumplings and cabbage.”
The draft legislation, which will in the coming weeks be debated in the government before it is submitted to further discussions in Parliament, has earned praise from the private branch of the tourism industry. Pavel Hlinka is deputy head of the Czech Confederation of Commerce and Tourism, an industry group.
“I can only say that I thank God for the ministry having discovered that the travel industry is important for the country. We are very happy that this legislation is being developed because it will immediately help not just the government but also investors and the private sector which manages hotels and other facilities. So I think it’s great that it’s happening.”
Mr Hlinka, whose group represents dozens of firms and associations working in the travel industry, says the legislation will bring an end to the present-day chaos by assigning concrete roles to the individual players.
“Today it’s one big mess. Everybody’s doing what they want, there are no regulations in place and there is nothing managed directly by the government or by the regions. So we think it will help with these issues and everyone will know what to do and how to do it. What is also important is that regions which often do not have the experience, it will help them cooperate with one another and with individual firms in the industry.”
While lack of a clear management structure in the Czech travel industry is seen as one of the major problems addressed in the new legislation, there are other issues that hinder its development too. The Ministry of Regional Development commissioned a survey among potential visitors to the Czech Republic in several European countries, including Poland, Hungary, Germany, France, Spain, and the UK.
The results show that a major issue is simply a lack of information about the country, which could be perhaps addressed by effective marketing, as could be a complaint there were no other interesting places to see outside Prague.
But many of those who took part in the survey also mentioned other reasons for not wanting to visit: low quality of services, high prices, or the fact that the country is in Eastern Europe, which makes it a less attractive destination for a family holiday. Even respondents in other former Soviet-bloc countries said they would not want to come to the Czech Republic because it would remind them of communism.
This image of the Czech Republic will be much harder to change. But Aleš Hozdecký from the Ministry of Regional Development says these perceptions are not based on the reality, and can be changed with good PR and marketing.
“I think the biggest problem of tourism in this country connected with the issues that you have mentioned is that we have made great progress in the quality of services in the last 20 years. I think the biggest problem is bringing the information to the tourists. We want to offer good or high quality destinations and show that this destination is safe; that’s really about good PR and good marketing and that’s how we are now trying to change the country’s image. So it’s really neither a problem of the quality of services nor of safety, but actually how to publicise it, and we are learning.“
But Mr Hozdecký admits that while Prague and some other big cities have the facilities to attract wealthier visitors, this remains a problem in the regions.
“We can’t say that every small town has 3 or 4 star hotels because it’s not true. I think that the most important idea of a new campaign to market the country is to tell the truth. We don’t want to tell everybody that if you go to the Šumava Mountains for example that there are plenty of lifestyle hotels because there is a different type of accommodation but for its level it is very good quality with good service and that’s what I would say is important to tell people.”
However, the authors of the bill say there are no specific goals the new legislation should achieve, for instance an increase in the number of tourists or the money they spend, mainly because the tourism industry is still affected by the economic downturn and it is difficult to predict when it will again reach pre-crisis levels.