(TIỂU LUẬN) final assessment written group report declaration and statement of authorship

After joining the European Union in 2004, Slovakia enjoyed rapid economic development in every sector and its tourism industry is no exception.. For the internal arrival sector, accordin

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ECON1318- Economics for Tourism and Hospitality

Final Assessment - Written Group Report

Subject Name

Economics for Tourism and Hospitality

Group members-StudentID Han Tu Nghi - s3752942

Chen Shu-Ying - s3765203 Nguyen Phu Hoang Minh - s3752871 Tran Nhat Minh - s3747830

Tran An Binh - s3756186

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Declaration and Statement of Authorship:

1 I/We hold a photocopy of this assignment which can be produced if the original is lost/damaged

2 This assignment is my/our original work and no part of it has been copied from any other student’s work or from any other source except where due acknowledgment is made

3 No part of this assignment has been written for me/us by any other person except where such collaboration has been authorized by the academic/teacher concerned and as detailed in the assignment

4 I/we have not previously submitted this work for any other course/unit

5 I give permission for my assignment to be scanned for electronic checking of plagiarism

6 I give permission for a copy of my/our marked work to be retained by the Department for review by external examiners

I/We understand that Plagiarism is the presentation of the work, idea or creation of another person as though it is one’s own It is a form of cheating and is a very serious academic offense which may lead to expulsion from the University Plagiarized material can be drawn from, and presented in, written, graphic and visual form, including electronic data, and oral presentations Plagiarism occurs when the origin of the material used is not appropriately cited

Enabling Plagiarism is the act of assisting or allowing another person to plagiarize or to copy one’s work; this is not acceptable and is also subject to penalty

TABLE OF CONTENT

I Introduction……… 4

II Key growth drivers for tourism 1 People……… 4

2 Place……… 6

3 Price……….8

4 Process……… 10

5 Policy making………11

6 Promotion……… 12

III Conclusion……… 15

IV References……… ……… 15

I Introduction

Slovakia, officially known as the Slovak Republic, is located in the center of Eastern Europe, bordered by the Czech Republic, Poland, Hungary, Ukraine, and Austria Slovakia was once part

of communist Czechoslovakia until it gained its independence in 1993 After joining the European Union in 2004, Slovakia enjoyed rapid economic development in every sector and its tourism industry is no exception This report aims to discuss more 7 different aspects of Slovakia tourism, consisting of people, place, price, process, policy, and promotion This report will also examine the development of Slovakia tourism industry since the start of the 21st Century

II Key growth drivers for tourism

1 People

Figure 1: Number of tourists in Slovakia

For the internal arrival sector, according to Statista (2019), during the ten years, Slovakia witnessed a modest increase of nearly 1,5 million in the number of internal tourists, from 4.03 million in 2008 to 5.49 in 2018 In 2009, Slovakia tourism arrival suddenly dropped by 0,69

million compared to 2008 However, they gradually rose back until 2013, reaching 4 million

tourists However, it seemed that they plummeted again in the next year to almost the same level

as it was in 2012, followed annually steady increase, resulting in 4,27 million in 2015 and 4,94

million in 2016 The outstanding feature over the past ten years is the highest growth of 0.35 million resulting in a

record-breaking number of 3,2 million tourists in 2017 Among the countries, the Czech

Republic was recognized as the most potential market as it made up a major number of 645,000

tourists, followed by the North Pole, Germany, Hungary, and Australia Furthermore, China also

was featured as the number of Chinese visitors was two times higher than the previous year

(Xinhua, 2018) In 2018, the number of visitors to Slovakia increased by 4,1%, reaching 5,5

million, of which 3.3 were domestic travelers (Observator, 2019) In comparison with 2017, the

domestic category and international one both 100,000 visitors higher Regarding outbound tourism, the number of outbound trips measured in thousand is significantly

lower than inbound overall The trend of outbound tourism was as similar as of internal tourism,

there was a drop in 2013, followed by an annual increase, reaching 4600 thousand of tourists in

2018 (Jennifer, 2019) However, oversea trips of the Slovaks are still predominant in the profit of

travel agencies and tour operators as trips in Slovakia organized by tour operators and travel companies have been reported with a declining trend (Marek, 2012)

Figure 2: Number of departures in Slovakia

In conclusion, based on the trend in the last decade, it can be forecasted that Slovakia’s inbound tourism will continue largely depend on domestic visitors, and welcome an increasing number of global visitors, especially Czechs and Chinese At the same time, more and more Slovaks will travel abroad, especially to European countries

2 Place

Slovakia is a landlocked country located in the Eastern European area and has a rather significant location, near the center of Europe, Slovakia has a total landmass of 48,105 km2 with a total of 930km2 bodies of water It borders with Hungary, with which it has the longest border at 679

km, with the Czech Republic, Poland, Austria and Ukraine, with which the shortest borderline at

98 km (Monika 2018)

Slovakia has a rather unique position in the region of Eastern/Central Europe, Slovak territory is crossed by three of the nine European core network corridors, with the Baltic-Adriatic Corridor being one of the most important ones for the development of transport infrastructure of the Slovak Republic (Marek et al 2018) Although the transport infrastructure in Slovakia is

unevenly distributed and many of the railways, motorway network suffer from deficiencies, the government has invested around 20 million EUR to upgrade motorway infrastructure, electrify the railway system and sold off outdated facility and equipment like railway tracks (OECD 2019)

Slovakia is endowed with tourist attraction, they also have a diverse tourism attraction that can offer various activities for tourists coming into the country, Slovakia has over 12,000km2 of protected area, divided into 14 protected landscape area that can serve for sustainable tourism purposes, including 9 national parks, moreover, the country is also known for its caves system, there is over 1,200 caves are discovered and registered caves in Slovakia, of which 12 are open

to the public Between the most important caves are: cave Driny, Harmanecká cave, Bystrianska cave, Demänovská cave of liberty (Monika, 2018) and more than 1,300 mineral and hot spring waters, thanks for their effectiveness, around 23 spas have built around mineral and hot spring waters, overall increase the effectiveness of the tourism product in these areas (OECD, 2016)

Slovakia also offers rich cultural heritage aligned with the diverse natural attractions, there are numerous historical sites such as castles (The Bratislava Castle, Devin Castle, Nitra Castle, Bojnice Castle, ) Churches and Cathedrals (The Blue Church of St.Elizabeth, St.Martin Cathedral, ) and over 300 smaller wooden churches with their unique structure have survived to represent their religious architecture, even the old town of Bratislava is a cultural heritage itself The diversity of tourist attractions in Slovakia also represents through over 70 museums, 19 galleries of all types, including other exposures commemorative rooms, open-air museums and more than 100 expositions for tourists to discover Up to now, there have been 8 sites in Slovakia recognized by UNESCO, including Vlkolínec, Levoča, Banská Štiavnica Towns and Slovak Karst Cave system (Anton K & Daniel G 2012)

3 Price

3.1 Pricing of tourism products

● Accommodations

Compared with the common ground in European countries, the price of accommodation in

Slovakia is much lower (Foster, 2019) According to Leffel, camping at the national park only

takes $8 one person with a tent If a tourist wants to stay at a hostel in Bratislava, they will need

to spend $17 – $25 per person per night For 2 to 4-star hotels, the price must be around $26 –

$70 for a double room Regardings luxury hotels, as mentioned by The Slovak Spectator, the

price payable for the most expensive hotels and in Slovakia are at half the price in some other

European countries such as Iceland, Switzerland, Norway, Denmark (The Slovak Spectator,

2018) ● Restaurants Similar to accommodations, prices of restaurants might also present as a salient feature in the

Slovakia tourism industry as several bottles of beer or even a three-course lunch might merely

cost €5 (Foster, 2019) To be specific, “soups are commonly $1 to $2.50, main dishes are $1.50

to $6” (Leffel, 2012) For travelers staying at a type of accommodation where there is a kitchen,

self-cooking will help to cut back on spending ● Transportation Notably, Slovakia does offer travelers a wide range of transportation Figures 1 below have

clearly demonstrated the prices of public transport tickets based on different validity Additionally, tourists can also travel around the city by taxi, which might cost roughly $1.30/kilometer (Leffel, 2012) Moreover, for those who travel in a group, renting a car will be more economical since the rental fee in Slovakia is only $17/day for a 5-seater car (Kayak, n.d)

Figure 3: Slovakia’s public transport price list (MHD, 2018)

3.2 Taxation

Recently, the Slovakia parliament has introduced a new VAT policy on hotels and similar accommodations sector This policy which was first implemented on January 1st of 2019 means

to reduce the tax rate from 20% to 10% in some industries, including the hotel industry (United Cash Back, n.d) According to The Slovak Spectator, the main cause of the VAT reduction is owing to signs of stagnation in Slovakia tourism industry; thus, the government must take action

to trigger the demand of tourists Furthermore, the general manager of AHRS confirmed

"continuous growing costs and pressure of visitors on quality of services" (The Slovak Spectator, 2018) is an additional reason On another aspect, VAT lowering can make service providers increase savings (United Cash Back, n.d)

3.3 Market structure

Generally, most travel-related sectors in Slovakia encompass accommodations, restaurants, and travel agents establish based on monopolistic competition market structure since these businesses are subject to severe competition Specifically, the F&B sector has recently witnessed significant growth (Euromonitor International, 2019) and roughly 13000 hotel rooms will be opened in the next 3 years (Gurova, 2018) Simultaneously, this expansion also prove that there are no barriers

to enter the market Moreover, product differentiation does exist when hotels usually cater to customers different service quality and facilities (Goni, n.d); otherwise, restaurants distinguish themselves by the taste of food or the variety of menu Furthermore, based on the quality of services that the business offers, they will set the price slightly lower or higher than the floor price Hence, it could be concluded that these businesses have little control over price

4 Process

The Slovak Parliament authorized an adjustment in October of 2011 regarding the Act on Support of Tourism in purpose to accelerate the creation and performance also the development

of local and regional Slovakia’s tourism sector (Štefko et al 2018) Slovakia’s ministries and authorities have established the initial competition in 2014 to encourage tourism innovation and promote positive change in tourism development with the participation of 12 Slovak entrepreneurs (Gržinić 2018) Specifically, in 2014, the Ministry allocating EUR 3.7 million to

33 tourism organizations, whereas 29 locals and 4 regionals, for hospitality product development, commercial campaigns, building, and tourist infrastructure preservation fee

Furthermore, it is obvious that networking applications would enhance further innovations in accordance to tourist destinations They were linked predominantly with executing information technologies in the two most significant mountainous destinations in Slovakia: The High Tatras and The Liptov Attributable to the major stakeholders’ networking, a diversity of hospitality product and marketing innovations have been inaugurated in the High Tatras and in Liptov in

2016 by tourism stakeholders (Gajdošík et al.2017 ) Notably, these innovations initiators are

DMO the company TMR, Inc., or the Liptov Cluster in both destinations, moreover, these innovations were focused on the product, price, promotion, and distribution

Toward High Tatras’s case, the stakeholders cooperate, especially in accommodation facilities and publishment of the destination visitor’s card Tatras Card Winter and Tatras Card Summer, which justification is to offer travelers discounts in sports and recreational activities and catering, also free transportation(an aqua ski-bus) This is also available in the Go Pass card, which is a loyalty program of a private stakeholder (TMR, Inc.), it also acts as a destination visitor’s card

Regarding Liptov, Stakeholders published the product liptov Card Winter and liptov CardSummer, therefore, customers can take advantage in the available discount on major attractions in the region Also, a fascinating hospitality product of the summer season called Seven Treasures of liptov, which uses the component of geocaching and inspired visitors to get

to acknowledge the whole region of liptov Both DMOs now play a vital role in networking based on marketing communication and product development Their yearly financial plan surpasses €1.5m and Slovakia governors target their economic development in destination attractions (Gajdošík et al 2017.) The liptov region has welcomed approximately half a million tourists in 2016 and experienced an increase of 13% in 2017

5 Policy

Because the European Union does not have a common policy focusing on tourism, so its Member States have various policies on the sector, those policies reflected the contribution, weight, and position of tourism to the country’s economy Therefore, there is no single guide on the tourism development policy established by the EU that can be applied to a specific country The majority of regulations and standards enacted by the Council of European Union involving tourism are concerned with the protection of the consumers and natural habitat (Monika 2018)

In 2002 the Slovakia government implemented Act No.49/2002 (which later amended by Act no.479/2005 Coll.), which aims to protect the cultural monuments of the country from