TOURISM NEEDS A GOOD BUSINESS ENVIRONMENT AND CLEAR RULES FOR DEVELOPMENT

New legislation to propel Slovakia’s tourism

THE TOURISM segment of the economy is facing major changes in Slovakia. The government of former Prime Minister Robert Fico adopted a new law to support tourism earlier this year and the tourism department is moving from one ministry to another one. While it is necessary to see what changes the new law will bring when it becomes effective at the beginning of 2011, entities involved in tourism do not expect any big changes from repeated relocation of the ministerial tourism department, and they are calling with one voice for more attention from the state.

Slovakia has excellent natural conditions for tourism. Slovakia has excellent natural conditions for tourism. (Source: TASR)

THE TOURISM segment of the economy is facing major changes in Slovakia. The government of former Prime Minister Robert Fico adopted a new law to support tourism earlier this year and the tourism department is moving from one ministry to another one. While it is necessary to see what changes the new law will bring when it becomes effective at the beginning of 2011, entities involved in tourism do not expect any big changes from repeated relocation of the ministerial tourism department, and they are calling with one voice for more attention from the state.

Tourism’s share of the country’s GDP is only about 2.8 percent and the Economy Ministry hopes that the new law will help increase this share to 9-10 percent within next 10-15 years.

Experts, organisations and companies active in tourism blame the government, for which they say tourism has never been a priority and which they believe has turned a deaf ear to their calls for bigger and more conceptual support. This could begin to change after parliament adopted on March 3 the law on support of tourism that becomes effective January 1, 2011.

According to former Economy Minister Ľubomír Jahnátek, whose ministry devised the new law, it lays out the structure of bodies that will secure development of tourism in Slovakia, i.e. from the governmental level down to local tourism organisations.

Simultaneously, the government approved within the framework of the law a co-financing principle. This means that the state will contribute one euro for each euro invested by municipalities and self-governing regions. Those public funds will come in the form of membership fees of a tourism organisation, the TASR newswire wrote.

The system assumes that within the next five years, annual revenues from member fees of tourism organisations created under the new law will reach about €10 million. The state would contribute that sum annually too, the SITA newswire wrote.

“This has been the first systemic solution for support of tourism and because of this we perceive adoption of this law definitively in a positive way,” Svetlana Gavorová, director general of the state Slovak Tourist Board (SACR), told The Slovak Spectator. “The law creates a legislative frame for the launch and effective operation of local and regional tourism organisations, conditions for their financing and sets the powers of the public administration in support of tourism.”

According to Gavorová, some tourism companies already operate as destination management firms in Slovakia, but the new law sets consistent rules for them and creates an opportunity for them to get state financing.

She thinks that although one law cannot solve all the problems of the tourism industry in Slovakia, it creates a solid base on which it is possible to build further and improve or extend the law by amendments.

Pavol Kašuba, the secretary general of the Association of Hotels and Restaurants of Slovakia (ZHR SR), who last September told The Slovak Spectator that Slovakia lacked a framework tourism law setting for 20 years, is not so happy with the new law.

“At the beginning it is necessary to say that finally Slovakia has at least some law on tourism,” he told The Slovak Spectator, adding that it is possible to debate whether the law is good or not. “Our opinion is that it does not solve the problems of the tourism industry as it should, especially in terms of institutions."

Kašuba also sees its model of financing as unsatisfactory since the system of co-financing excludes entrepreneurs active in tourism. In his opinion, the ideal solution would be the use of the Austrian model, where anyone profiting in any way from tourism participates in financing a tourism association.

Tomáš Hasala, president of the Slovak Association of Travel Agencies (SACKA), also sees a shortcoming in the law because there is no provision to provide financial incentives for businesses to join and be active in tourism associations.

ZHR SR believes that the experience will show that in order for tourism to function according to this law and not to languish, it will need to undergo changes.

According to Hasala, a positive feature of the law is that it accentuates cooperation at local and regional levels.

Jozef Orgonáš, general secretary of the Association of Trade and Tourism (ZOCR), also welcomes adoption of the law, because the law creates an institutional framework.



Moving tourism



Before its departure from power, the Robert Fico government transferred the tourism department from the Economy Ministry to the Culture Ministry, renaming it the Ministry of Culture and Tourism. The Fico cabinet approved the move of the department to the Culture Ministry in January within a general reshuffling plan within which the Environment Ministry and the Ministry of Construction and Regional Development were dissolved and most of their powers and responsibilities transferred to other ministries.

However, after the Radičová government was formed following the June 2010 parliamentary elections, the new coalition announced a reshaping of ministries. Tourism issues were moved to a so-called super-ministry sheltering segments of transport, regional development and tourism. But the new parliament must first adopt laws to move the tourism department from the Ministry of Culture and Tourism to the Ministry of Transport, Regional Development and Tourism. For now, however, the tourism department is located within the Culture Ministry.

The Slovak Tourist Board, which is directly affected by these relocations sees its next move as a chance to move ahead in tourism, but professional organisations involved in tourism expect the impact to be relatively minor.

“In most states, tourism is under the management of the Ministry of Economy,” said Gavorová, the SACR director general. “The announced relocation [from the Ministry of Culture and Tourism] under the auspices of the Ministry Transport, Regional Development and Tourism, where also powers in regional development should be concentrated, creates space for coordination and new concepts for support of tourism.”

Orgonáš of ZOCR sees all this relocation as a useless reshuffling, “even though in principle it does not matter whose ministry the tourism section is.” Kašuba of ZHR SR sees the reshuffles as political decisions.

Gavorová shares the opinion of professional organisations, saying that with whichever ministry houses tourism, more attention needs to be paid to thoroughly thought-over decisions as well as communication with the professional public. Those actions would help tourism develop, she said.



“The important thing, wherever the segment of tourism is allocated, is that adequate and serious attention is paid to tourism, that the minister listens to opinions from the tourism industry, and that tourism is not on the end of the tail of interest as it has been so far,” said Kašuba. “It is also important that the tourism business [the ministerial tourism section and the Slovak Tourism Board] is managed by experts who understand the related problems and are able to push through requirements from the praxis at the highest, i.e. ministerial level.”

Hasala of SACKA expects only a minimal impact from the relocation, too.

“Tourism has never belonged among the cabinet’s priorities and there is no sign that this will change in a short period of time,” he said. ”Moreover, I see only very limited opportunities for the cabinet to support tourism development.”

According to Hasala, the development of tourism requires two things, and neither can be achieved by a single new law.

“One is a quality business environment in the broadest sense of the word; and the second is tradition,” he said. “Especially because of the missing tradition and a bad ownership structure, which is inter-linked, development of Slovakia’s tourism industry is a long-distance run.”


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