Application of destination management in the conditions of the Slovak Republic

Application of destination management in the conditions of the Slovak Republic

Ing. Katarína Kleinová, PhD., Ing. Juraj Neománi

Department of marketing, Department of informatics

Faculty of economics and management

Slovak university of agriculture

Trieda A. Hlinku 2, 949 76 Nitra, Slovak Republic

katarina.kleinova@fem.uniag.skjuraj.neomani@fem.uniag.sk


Abstract

This article maps the current state of tourism in the conditions of the Slovak Republic in term of new emerging tourist organisations called clusters, which opens up the issue of the application of destination management and marketing in Slovakia. The article is processed on the basis of summarizing and analysis of available information about the theoretical approaches to the existence of the destination management organizations, which are becoming an important determinant of a success of the tourist regions on the global market.

Keywords

Cluster, destination management and marketing, tourism, Slovakia

Introduction

In most advanced economies of the world, the tourism is considered as a significant sector of the national economy. In Slovakia is however, only tolerated industry, which is continuously overviewed and retracted whether by the automobile or any other industrial sector. Tourism in Slovakia is the industry, which directly in services (hotels, restaurants) employs currently more than 111 000 employees and its absorption capacity is many times higher. One working place in tourism can create up to 2.6 work places in other related sectors of the economy such as trade, transport and other services. Today tourism produces approximately 2.7% of GDP in Slovakia. According to an estimate by the European Commission this sector has the potential producing up to 12% of the Slovak GDP and so become one of pillars of the Slovak economy.

Tourism management system and support of its business environment is in the current conditions, trends, needs of the management industry in times of crisis and growing competitive pressures from abroad insufficient. It is ensured by the dysfunctional organisational structures and the lack of effective programming documents of the Ministry of Economy of the Slovak Republic. [1]

In Slovakia, there are also associations of the tourism, but those really well-functioning could be counted very easily and quickly. Cooperate with competitors in business, find a common language between entrepreneurs and municipalities or between municipalities themselves as if contravene to the Slovak naturalness. Many argue that are waiting for the Law on Associations of tourism, which is said already for years. They hope that this law will determine the conditions for the establishment and funding of associations.

Results and discussion

The strategic objective of the development of tourism in Slovakia is increasing its competitiveness for a better exploitation of the potential with the intention of balancing regional disparities and the creation of new job opportunities. For the fulfilment of this objective have been defined five specific aims of the development in the tourism sector in SR [2]:

  • enforcement of the position of tourism industry in national economy,
  • increase of the attractiveness of Slovakia as a holiday destination,
  • increase in the volume of a residence of tourism,
  • improve the structure of visitors in Slovakia with the upgrading of the provided services,
  • support the creation of  new jobs in regions with a significant potential for tourism.

The State policy of the Slovak Republic perceives and promotes tourism respect to four principles:

  • Tourism is a tool of support increasing competitiveness, structural changes in the economy and sustainable development with an intention to increase the share of foreign exchange revenue from active foreign tourism to GDP from the current 2.7% to 4% in 2013.

Table: Current state of tourism in the Slovak Republic

Source: Ministry of economy of the SR

  • Tourism is a tool for the development of employment and the flexibility of labour markets. The most visited area of Slovakia is north however the highest dynamics of development records the housing facilities in the Bratislava region. Simultaneously, we can allege that the overnights in the Bratislava region have short-term character with the fact that there is recorded the lowest average length of stay. We can say that in more than 11 million nights a year, hotels and restaurants create one working place at the approximate level of 110 overnight stays. For completeness it should be noted that the lowest average nominal salary in the economy had just staff in hotels and restaurants. However the Slovak Republic cannot be described as the country of “cheap labour”, despite of the fact that wages are substantially lower than in the countries of the Western Europe. The differences between the countries of the European Union and the Slovak Republic are reducing when the lower wage is combined with a high payroll tax.
  • Tourism is a tool of regional and business development. The current organizational structure of tourism in Slovakia is characterized by instability, opacity, uncertainly defined relations, competency and responsibility, as well as the outstanding resources for funding. For the current period is also characteristic an unsystematic approach to the issues of development of tourism. With the proposal of the Law on Associations of tourism it is advisable to lay the foundation for the improvement of cooperation and partnerships between businesses, local or regional municipalities and the State administration in the field of tourism, as well as the determination of the funding. The Ministry of Transport, Construction and Regional Development wants to make the tourism in Slovakia more effective with the preparation of the new law. Preparation directly follows the accepted amendment of the Law 91/2010. The aim of the Law is the creation of a complex product of tourism, which will be competitive in the European environment.
  • Tourism is a tool for presentation and promotion of Slovakia. Policy of tourism promotion of the Slovak Republic on the domestic and foreign markets means support to the marketing of tourism of the Slovak Republic at the international, national and regional levels associated with the sales promotion of the tourism products. Creation of a majority of tourism products will be implemented in regions where the main initiators are primarily businesses in cooperation with local and regional tourism associations, higher territorial units and by public authorities. To created products and the identified target groups is necessary to create a suitable marketing communication of tourism in Slovakia, which fulfil the main objective the increasing of the informedness, building the positive image of the country and excitation of interest to visit Slovakia as a holiday destination.

In the tourism of Slovakia, more precisely in its organizational structure from 2008 appear new tourism organisations called clusters of tourism, whose aim is to obtain for its tourist region or locality more significant position on the market, the higher number of visitors and overnight stays. Clusters of tourism with the aim of coordinating the development of tourism in some territory from one headquarters thus open an issue of application of destination management and marketing in Slovakia.

The formation of modern organizations of tourism has a number of reasons. As the key, we can mark changes of the conditions on the global tourism market – changes in the environment in which the entities of the tourism are operating as well as changes in consumer behaviour of the customer, who under the influence of globalisation became more demanding and more experienced. The existence of new tourist destinations carries with it the need to monitor and respond to the competition. On the other side the unique character of the tourism industry, which is typically with the predominance of small and medium-sized enterprises is already inherently destined for cooperation. Many barriers of the development as for example: the lack of specific know-how, information, finance in a particular territory helps to overcome just associating the actors of tourism into the common organisations.

The justness of the existence of modern tourism organisations which help targeted to develop industry in some territory, is in the 21st century already indisputable and confirmed with positive results in many foreign regions. Despite of all Slovak clusters are fighting with distrust and negative attitudes towards them. Often they are seen only as useless “younger brother” till now known associations of tourism. Especially the public sector is perceived them as a competitive element in the field of promotion of tourism. The cause is a low level of knowledge on the issue about destination management and marketing. [3]

In the region with tourist potential it is essential that such an organization works, which would initiate and manage the entire process of development of tourism. Also in cooperation with the private and public sector and with the local people. Taking into account the needs of visitors, the economic interests of the tourism industry but at the same time reducing the potential negative impact of the development of tourism on the people of the region.

On the management of the tourism destinations should participate businesses, civic and cultural organizations, public administration, municipals and citizens. Coordination of the interests of all interested is one of the conditions for a conflict-free development of tourism in destinations. To no less important suggestion of good functioning of the organization belongs creating a functioning financing model. It may be member contributions, the income from own business, from organizing events, from intermediation of accommodation and other services. Another source of revenues may consist of contributions from municipalities, regional governments, local fees, grants, loans and funds of the EU. [4]

In comparison with the abroad the prevalent forms of management and marketing of tourism in Slovakia corresponds approximately to the development phase which have passed the advanced foreign destinations in 50-70th years of the last century. This phase is characterized by simple cooperation activities focused mainly on promotional activities – common promotion of cities and regions, participation on exhibitions, the setting up of information centres. From approximately 90th years of last century foreign destinations use more advanced form of management and marketing – destination management and marketing. On the tourism market thus under the influence of the higher mentioned changes has become the fundamental competitive unit a destination as a whole. The process of building new, modern tourism organisations in Slovakia (destination management organisations – DMO, clusters of tourism,…) is currently necessary, without fundamental systemic changes Slovak tourist regions won`t be competitive on the global tourism market. [3]

In comparison with the competition we literally “slept” the arrival and use of modern tools for the development of tourism in Slovakia. Countries, which in the past held a large World or European sport or cultural events, they use them in favour of getting visitors to their destinations already for several years before their proceedings. Why is currently on the national tourism portal  not established a specific tourist offer and promotion of the upcoming World Championships in Ice Hockey 2011 – Bratislava, Košice or European capital of culture 2013 Košice? The answer to this question can be found even in a non-functional organisational structure of tourism in Slovakia. [5]

The foundations of a modern and most advanced form of management of tourism in the localities and regions today stand on the organizations of destination management. Clusters such as destination management exist in Slovakia in many sectors of industry. Their range extends from the automobile production, electrical engineering, mechanical engineering and plastics to the IT technology and tourism. [6]

All these initiatives created as associations of legal entities. The clusters focus mutual linked firms and suppliers in the related industries. They are unified by sub-contracting, the same purchasers, sales and common exploited technologies. Probably the best known is for us the automobile cluster – Western Slovakia, which originated in Trnava in 2007. Supports automobile industry through innovation and covers a number of firms in this field. The second oldest cluster is the Association of Košice IT Valley, in Detva became the first Slovak engineering cluster, in Galanta very prospective electronic cluster and in Nitra operates a Slovak plastic cluster. In the field of tourism also operates in Slovakia several clusters:

  • Cluster Liptov – is an Association of legal persons established in the year 2008 with the vision to build from Liptov a European recognizable destination of tourism with the strategic objective of increasing the visit rate of the region Liptov till 2013. The cluster for its members and partners from the tourism industry in the region Liptov fulfils the role of official common marketing and organizational headquarters, coordinates the development of tourism at regional level by promoting tourism as a sector in the region. Founding members are the four most significant entities of the private sector from Liptov – Thermal Park Bešeňová, Aquapark Tatralandia, Jasná Nízke Tatry and Skipark Ružomberok and three cities Liptovský Mikuláš, Liptovský Hrádok and Ružomberok.
  • Cluster Orava – set on 10th June 2009. Since that date began to work as the next organization of destination management in Slovakia and common marketing headquarters for destination Orava. The effort of the Orava cluster is with own activities to get Orava on the map of the searching European destinations, to present Orava under the single brand home and abroad, to create competitive products of tourism and to encourage cooperation in the region. The aim of the association is to create a positive image of the region for the visitors, investors and citizens of the region, organize common marketing of tourism and territory of Orava, as well as mutual offer of quality tourism products in Orava. Among the founding members belonged Aqua Relax Dolný Kubín, Ski Park Kubínska hoľa, Ski resort Roháče and tourist–information portal of the region Orava. On 20th August 2010 cluster Orava became also a founding member of the Union clusters of Slovakia. Founding members were Slovak plastic cluster, first Slovak mechanical cluster, Košice IT Valley, cluster Liptov, cluster Orava and cluster Turiec.
  • Cluster Turiec – is another association in the north of Slovakia. Its founders have become cities Martin and Vrútky, travel agency Fatra Ski and ski resorts Snowland in Valčianska dolina, Jasenská dolina and Winterpark Martinky. Cluster develops activities leading to a substantial increase of informedess of Slovak and foreign guests about the potential of the Turiec region as a tourist destination.
  • Cluster Tatry – began to operate in February 2010. In conditions of the Tatras is for now the biggest step forward cooperation between business and municipal sphere with a aim of more effective marketing and development of the region. The founding members were Tatranské lanové dráhy, Aquacity Poprad and the cities Vysoké Tatry, Poprad, Svit a Štrba.
  • Cluster in Western Slovakia – was established in 2008. It represents a concentrated group of independent, regional interconnected companies and institutions associated with the potential to increase their competitiveness. The aim of the cluster is on the principle of partnership encourage and promote the development of tourism in the region, maintain the various sectors of the interdepartmental level and make available the cultural, historical and natural heritage. The founding members of this cluster are self-governing region Trnava and the city Galanta. Associate members are cities Sereď, Dolná Streda and Šoporňa.
  • Balnea cluster Dudince – originated in June 2008 as the first Spa cluster in Slovakia. Its members are city Dudince, a self-governing region Banská Bystrica, the Spa Dudince, hotels Hviezda, Prameň, Flóra and Park Hotel. The aim of the association is to learn people  about excellent effects of healing water in Dudince and to come many clients to Dudince for the best services.
  • Cluster Smolenice – was created in March 2010 as the first Slovak village cluster in tourism. Its members have become municipality of Smolenice and almost everyone, who run a business in the tourism of Smolenice. The cluster yet operates only on the territory of the village Smolenice, enlargement on the territory of the other villages is in the plan, but the surrounding municipalities have not showed a great interest in tourism so far.
  • Cluster Košice – is the first urban cluster of tourism from June 2010. Generated marketing activities of the cluster of tourism use in particular a unique marketing brand of Košice – European capital of culture 2013.
  • Cluster of tourism wants to create also the city Nitra. Cluster would join the main actors acting in tourism in the territory of the city and its surroundings. This intent is part of a larger project within which shall be created also the Concept of the development of tourism in the city.

Currently, all the cluster initiatives of tourism organise various events and active marketing in order to support the attendance of the regions and the promotion of its members. Frequency of executed actions (participation at trade fairs, presentations at conferences) is on average once a month depending on the actual needs. Cooperation inside of the cluster initiatives is based on developing mutual confidence and the contacts of management of individual members, the exchange of information, common decision, solving problems and sharing of costs.

The main problems are considered by the cluster initiatives the insufficient financial resources for their operation, the overall low level of innovations in the services sector, inefficient use of resources of the Slovak Agency for the development of tourism but also the lassitude about the development of the sector of tourism from the state.

The Slovak Innovation and Energy Agency [7] developed a SWOT analysis of cluster initiatives operating in Slovakia:

Strengths:

  • synergy of knowledge of voluntarily associated members,
  • counterbalance of small and medium-sized enterprises against large enterprises,
  • bargaining power when buying and selling,
  • distribution of costs and more options in the field of research and development, advertising, presentations of enterprises at fairs and exhibitions, counselling, training of staff, legal services, logistics, distribution,
  • more flexible responses to market requirements,
  • support of the development of the region.

Weaknesses:

  • the current low informedness about the possibilities of the association of enterprises,
  • problem of selecting appropriate enterprises to cluster,
  • little experience with this form of organisation,
  • the mutual distrust of small and medium-sized enterprises, the distrust towards the cluster,
  • complicated state administration,
  • the lack of public support mechanisms,
  • lack of skilled worker.

Opportunities:

  • cooperation with universities (science and research, education, market surveys),
  • cooperation with secondary initiatives,
  • the possibility of obtaining support from the state and the EU,
  • the support from operating region (regional government, higher territorial unit),
  • lobbying,
  • availability of loans,
  • better option to get high-quality employees,
  • the increase of technology transfer, innovation awareness,
  • cooperation with other large businesses or clusters (domestic and foreign),
  • the possibility of establishing the common management of knowledge,
  • the creation of new and more stable jobs,

Threats:

  • disputes of the members inside the cluster,
  • imposition of information inside the cluster,
  • non-cooperation between small and medium-sized enterprises,
  • issue of the implementation of the financial commitments incurred by the operation of the cluster.

Conclusion

Tourism industry in Slovakia is fighting in the long term with many problems. The initiative clusters of tourism endeavour from the 2008 after more substantial changes opened up the issue of the application of destination management and marketing in the practice of tourism in Slovakia. The strong and competent management organizations of tourism on the local and regional level may already in the near future considerably strengthen promotion of Slovakia as an attractive tourist destination for domestic and foreign markets.

References

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