ANALYSIS AND ASSESSMENT OF THE SITUATION OF THE TOURISM SECTOR IN SLOVAKIA

EuropeanUnion PROJECT BG051PO001-7.0.07-0236 Innovative transfer of entrepreneurial and business skills in the tourism sector. The project is implemented with the financial support of the Human Resources Development Operational Programme, co-financed by the European Social Fund of the European Union European Social Fund ANALYSIS AND ASSESSMENT OF THE SITUATION OF THE TOURISM SECTOR IN SLOVAKIA A STUDY WITH A FOCUS ON THE SPECIALISED TYPES OF TOURISM February 2014 This document has been prepared with financial support from the European Social Fund. UNWE bears the whole responsibility for the information contained in this document and it under no circumstances can be considered as an official position of the European Union or the MLSP. Investing in your future!

Contents Section 1. Introduction... 5 1.1. Aim of the document... 5 1.2. Objective of the analysis... 6 1.3. Definitions, terminology and sources of information... 6 1.4. Methodology... 6 Section 2. Analysis, assessment and forecasts for the development of the tourism sector in Slovakia... 8 2.1. Analysis, assessment and summary of the economic indicators for the tourism sector, incl. impact of the global crisis... 8 2.1.1. The sector s evolution and present situation... 8 2.1.1.1. Growth performance and major factors explaining it... 8 General external factors:... 12 2.1.1.2. Structure of the sector tourist companies and product supply... 13 2.1.1.3. Labour market issues volume and structure of employment, trends... 15 2.1.1.4. Major sectoral organisations employer organisations, trade unions, NGOs..... 15 2.1.1.5. SWOT analysis strengths, weaknesses, opportunities, threats... 20 2.1.2. Human resources issues... 21 2.1.2.1. General level of education, perceived level of skills and estimates of major deficiencies (qualitative-quantitative)... 21 2.1.2.2. Institutional provisions related to human resources development training. 23 2.1.2.3. Training initiatives performed in the area of tourism... 23 2.2. Analysis and assessment of the development trends observed for the specialised types of tourism in Slovakia... 24 2.3. Analysis of the opportunities for access to grant funding for projects in the studied sector... 29 2.3.1.1. Operational Programme Competitiveness and Economic Growth 2007-2013. 29 2.3.1.2. Main aims and objectives... 30 2.3.1.3. Types of eligible activities and costs... 30 2.3.1.4. Requirements for candidates and projects... 31 2.3.1.5. Amount of eligible costs... 32 2.3.1.6. Intensity of grant funding... 32 2.3.1.7. Modes of payment of grant subsidies... 32 2.3.2. Regional Operational Programme 2007-2013... 32 2.3.2.1. Main aims and objectives... 32 2.3.2.2. Types of eligible activities and costs for tourism sector... 33 2

2.3.2.3. Requirements for candidates and projects... 34 2.3.2.4. Amount of eligible costs... 34 2.3.2.5. Intensity of grant funding... 34 2.3.2.6. Modes of payment of grant subsidies... 34 2.3.3. Programme for Rural Development of the SR 2007-2013... 34 2.3.3.1. Main aims and objectives... 35 2.3.3.2. Types of eligible activities and costs... 36 2.3.3.3. Requirements for candidates and projects... 38 2.3.3.4. Amount of eligible costs... 38 2.3.3.5. Intensity of grant funding... 38 2.3.3.6. Modes of payment of grant subsidies... 39 2.3.4. Operational Programme Employment and Social Inclusion 2007-2013... 39 2.3.4.1. Main aims and objectives... 39 2.3.4.2. Types of eligible activities and costs... 39 2.3.4.3. Requirements for candidates and projects... 40 2.3.4.4. Amount of eligible costs... 40 2.3.4.5. Intensity of grant funding... 40 2.3.4.6. Modes of payment of grant subsidies... 40 2.3.5. Other donor s programmes... 40 2.4. Forecasts for the development of the sector for the period 2014-2020... 41 Section 3. Conclusions and recommendations... 45 3.1. Tourism sector and specialised types of tourism... 45 3.2. Opportunities for grant funding of projects in the sector... 47 Section 4. References... 49 3

List of abbreviations: Abbreviation Description CBC CR FB GDP HORECA IoT LLL NBS NTO OP CEG OP ESI OP RD PA ROP RDP SNTB SOSR TA TO VAT V 4 Cross Border Cooperation Czech Republic Final Beneficiary Gross Domestic product Hotels, Restaurants, Cafeterias Institute of Tourism Lifelong learning National Bank of Slovakia National Tourism Organisation Operational Programme Competitiveness and Economic Growth Operational Programme Employment and Social Inclusion Operational Programme Rural Development Priority Axis Regional Operational Programme Rural Development Programme Slovak National Tourist Board Statistical Office of the Slovak Republic Travel Agent Tour Operator Value Added Tax Visegrad 4 (Czech republic, Hungary, Poland and Slovakia) 4

Section 1. INTRODUCTION 1.1. AIM OF THE DOCUMENT The present study is elaborated under project Innovative transfer of entrepreneurial and business skills in the tourism sector. The project is implemented in the period June 2013 December 2014 by the University of National and World Economy, Sofia (UNWE) in consortium with the Institute of Tourism, Bratislava (IoT) and the Bulgarian Association for Rural and Eco Tourism (BARET) in accordance with contract No.BG051PО001-7.0.07-0236-C0001/ 19.04.2013 under Grant scheme Without borders Component 1 Phase 2 within Priority Axis 7: Transnational and Interregional Cooperation of the Human Resources Development Operational Programme, co-financed by the European Union through the European Social Fund. The project is implemented within several major activities (work packages): WP 1. Development of a common framework for transnational cooperation between institutions from Bulgaria and Slovakia through conducting a comparative study, analysis and assessment of the situation of the tourism sector in Bulgaria and Slovakia with a focus on the specialised (non-traditional) types of tourism. WP 2. Creation of a training package and an IT platform for mutual transfer of good practices. WP 3. Organising and conducting training in entrepreneurial and business skills in the field of specialised tourism. WP 4. A visit in the partner country Slovakia for an in-depth acquaintance with the presented during the trainings good practices. General project objectives: Creation of a working partnership for transfer of good practices among educational, research and branch organisations from Bulgaria and Slovakia in the area of training in entrepreneurial and business skills in the tourism sector. Creation of an online platform for mutual transfer of good practices and lifelong learning. Encouraging the acquisition of competencies for development of business and entrepreneurship. Encouraging lifelong learning through promoting the participation in innovative forms of formal, non-formal and informal learning. Specific objectives: 5

Encouraging target groups for business start-ups in the tourism sector. Increasing employability and adaptability of workforce as well as encouraging job creation in the tourism sector, incl. through self-employment. Increasing the capacity of the private sector at regional and local level for absorption of the resources, grated through the EU financial instruments. 1.2. OBJECTIVE OF THE ANALYSIS The analysis has been elaborated by a team proposed by UNWE. The main task of the analysis is to deepen the studies on the situation and the trends in the tourism with a focus on the specialised types of tourism in Slovakia. A leading accent in the study is to identify the common ground, which will serve as a basis for transfer of entrepreneurial and business skills in the tourism sector between the partner countries. The results of the present study will be used for the preparation of a synthesis report containing comparative analysis of the situation in the studied fields of the tourism sector in Bulgaria and Slovakia. 1.3. DEFINITIONS, TERMINOLOGY AND SOURCES OF INFORMATION The basic information resources used for the purposes o the present study are as follows: Statistical Office of the SR Ministry of Economy of the SR Ministry of Transport, Construction and Regional Development of the SR Ministry of Agriculture of the SR National Bank of Slovakia Internal documents of Institute of Tourism 1.4. METHODOLOGY The main tasks of the analysis, presented in this document can be identified as follows: 6

to investigate the condition of the tourism sector in the country, incl. trends observed in the services, prices, demand, supply, barriers, consumers and/or suppliers behaviour; to outline the trends in the dynamics of factors affecting demand and supply as a result of changes in the state regulatory regime, legal basis, general economic situation in the country, etc. to trace the impact of the global crisis on the tourism sector in general, the micro and small start-up and existing companies in the field of tourism, the intensity of creation of new enterprises in the sector; to analyse the opportunities for development of specialised (incl. ecological, cultural, adventure, etc.) tourism in non-urbanised settlements, where there is no mass tourism developed; to outline the role of stakeholders in the process and the training needs of the target group; to present the opportunities for access to grant funding of start-ups and existing micro and small enterprises in the field of tourism in the country; to make an overview of the grant schemes in this area, analyse their potential to affect positively the opportunities for transfer of good practices and present the possible future opportunities for financial support of projects in the investigated sector. For the fulfilment of the tasks specified in the present document, a set of investigation instruments are used, based on desk research of publicly-accessible sources of information, incl.: a systematic approach, analytical, comparative, deductive and inductive method; the SWOT analysis approach (strengths, weaknesses, opportunities, threats), etc. 7

Section 2. ANALYSIS, ASSESSMENT AND FORECASTS FOR THE DEVELOPMENT OF THE TOURISM SECTOR IN SLOVAKIA 2.1. ANALYSIS, ASSESSMENT AND SUMMARY OF THE ECONOMIC INDICATORS FOR THE TOURISM SECTOR, INCL. IMPACT OF THE GLOBAL CRISIS Tourism is undoubtedly one of the fastest developing and most promising industries of the Slovak national economy. The position of Slovakia in the heart of Europe at the intersection of trade routes, its cultural and historical wealth and the favourable climatic conditions all create the potential for development of the tourism industry in our country. The tourism potential of Slovakia is vast, covering almost all key forms and types of tourism. According to the Regionalisation of Tourism in the Slovak Republic, northern Slovakia has features suited to mountain activities and winter hiking while southern Slovakia offers waterside holidays and the opportunity to take advantage of thermal waters. Throughout most of Slovakia there is a wealth of cultural, historical and natural attractions which may be utilised for tourism. In addition, a great deal of accommodation, catering and supplementary service capacity already exists in Slovakia. On the other hand, what is on offer does not match our possibilities and potential. Slovakia s historic towns and numerous mountain ski resorts are its most popular tourist destinations. The demographic makeup of visitors shows that the Slovak Republic is a target country for middle class and less-demanding visitors for whom price is a critical factor. 2.1.1. THE SECTOR S EVOLUTION AND PRESENT SITUATION 2.1.1.1. Growth performance and major factors explaining it During previous decade, since 2000 the tourism sector has performed the significant growth in all the most important indicators [both internal (inbound + domestic) and outbound tourism] and the best results were achieved in the year 2008. But during following year the impact of crises was very evident sharp decline of all indicators. Since 2010 there has been a renewal of growth noticed but the results of 2008 have not been achieved till now, yet. Average expenditure per one night increased by 53% in total between 2007 and 2012 due to improvement in quality and wider variety of tourist services offers. Improvement on the supply side significant improvement of quantity and quality of tourist facilities and in provision of services was achieved in field of accommodation, catering, sports and relax services (spa, wellness, skiing, aqua parks, golf courses and other services). 8

High share of new investments (both new construction and reconstruction/modernisation) was generated by EU SF programmes and Rural Development Programme. Just for illustration under OP Competitiveness and Economic Growth there were within 5 calls for proposals 154 projects awarded in favour of private tourism companies. Total worth of grants achieved almost 180 million Euros. Some projects are already completed constructions finalised, some of them are under implementation. The 6th call for proposals is under assessment and other group of projects will by financially supported. The majority of financial assistance from SF OP CEG was focused on accommodation facilities (within first calls new facilities, later only reconstruction and quality improvement of existing ones including increasing opportunities for new services like wellness, conference facilities, etc.), aqua parks, ski resorts, sports facilities as horse riding. Table 1. Basic indicators of Slovakia tourism within the period 2005-2012 Year 2005 2007 2008 2009 2010 2011 2012 Number of Beds 122.612 146.655 151.991 150.607 147.292 148.748 163.898 Number of Rooms 47.666 56.525 58.182 58.647 57.406 57.831 63.685 Source: SO of the SR Accommodation capacity recorded significant qualitative growth and achieved more than 160 000, i.e. it is around 31,5 beds per 1000 inhabitants. Besides new constructed facilities many existing ones were reconstructed and quality level was significantly improved. High number of beds in some destinations leads to strong price competition. Average price per one overnight represents around 25 in Slovakia in 2012, in Bratislava region the average price is higher by more than 40%. Some accommodation establishments are not very well located. This fact and also extent of grey economy caused that net occupancy rate of beds records only 21,4 %.In some regions (Kosice, Nitra) this indicators achieves significantly less favourable level. Regional aspects of tourism development at NUTS 3 level regions. The differences between most developed regions and lagging behind regions are growing because the most developed regions are recording faster growth in comparison to other regions. The fact that differences are enhancing means that till now EU SF did not contribute to reduction of regional disparities in field of tourism. It is even more important to stress that regional disparities are even bigger at lower regional levels (within/inside NUTS 3 regions) and these differences did not decrease and expected convergence presently is not achieved. 9

Table 2. Specific indicators of Slovakia tourism within the period 2005-2012 2005 2007 2008 2009 2010 2011 2012 Inbound tourism receipts In mil. Outbound expenditure In mil. 1055 1473 1831 1675 1684 1745 1789 680 1117 1524 1504 1471 1567 1666 Saldo 375 356 307 170 214 180 123 Tourists in accommodation facilities ( 000), incl.: 3428 3778 4083 3381 3392 3571 3774 - Foreigners 1515 1685 1767 1298 1327 1460 1527 - Locals 1913 2093 2316 2083 2066 2111 2246 Average number of nights, incl.: 3,1 3,1 3,1 3,1 3,1 2,9 2,9 - Foreigners 3,2 3,0 3,1 3,2 3,2 3,1 3,0 - Locals 3,1 3,1 3,0 2,9 2,9 2,8 2,7 Source: SO SR, NBS The tourism sector has increased the pace of growth during recent years mainly in financial indicators. Especially revenue generated by inbound tourism recorded index of growth between the years 2005 and 2012 almost 70%. The pace of growth of outbound tourism from expenditures point of view was even higher but, despite this growth, there is a surplus of payment balance in favour of foreign tourism of Slovakia during the whole reference period. The growth rate of number of tourists was not so high and it recorded minor shortening of their length of stay, which is the case of foreign and also local tourists. Comparison of number of tourists, the number of their overnights and tourism receipts show significant increase of average income per one tourist or/and per one overnight due to the quality improvement, wider variety of services offers to tourists and, of course, partially there is also an impact of inflation but by size it is not the most important fact. However, there is one not positive element during the whole period which is the development of the length of stays both foreigners and local tourists average number of overnights is stagnating or very slowly declining. Structure of tourists by country of origin is not ideal because Slovakia is losing slowly and long-acting German market is not possible simply to substitute. German tourists spent in Slovakia longer time than average and their expenditures in total and per day were also significantly over average. But on other side within existing feeder markets/countries is evident a shift towards more affluent and demanding clients, 10

probably as a result of growth of living standard within these countries despite the crises. During recent years there has some effort penetrated to the new markets like South Korea, China, Brazil, India and some other Asian countries. At the same time there was a big effort put on increasing the number of tourists mainly from Russia. But still the most important feeder markets remain neighbouring countries (Czech Republic, Poland, Hungary, Austria) and Germany, followed by Italy, UK, Russia, Ukraine, France, Netherlands, etc. Table 3. Number of foreign tourists in commercial accommodation establishments top 5 countries Country Year 2007 2008 2009 2010 2011 2012 Czech Republic 1610 881 1704 632 1300 870 1350 234 1422 506 1412 870 Poland 762 890 941 975 479 774 453 067 471 178 441 447 Germany 777 872 682 274 527 821 490 780 462 503 443 663 Hungary 247 703 225 271 136 921 120 304 143 575 131 570 Austria 163 149 158 594 122 449 120 900 125 499 135 907 Source: SO SR During last 15 years the corporate tourism has been developed as most dynamic part of domestic tourism. Rapid growth was slowed down due to the crises but it still remains very important segment for accommodation sector. This type of tourism experiences considerable regional differences due to the concentration of companies in Bratislava city and other big cities. Because the actions of corporate clients last only few days, usually up to 3 days, the destinations serving for these actions/events are not in the remote distances. The usual distance limit is around 200 kilometres, therefore majority of these events/actions are concentrated in Western part of Slovakia, then closer parts of Central Slovakia and High Tatras Mountains as a fashionable destination. The most important forms of tourism in Slovakia are the following: tourism based on historical heritage and culture mountain winter sports, mainly alpine skiing and snowboarding mountain summer relax trekking, combining with water sports spa tourism business tourism (including MICE and fairs) water tourism based on aqua parks, thermal water swimming pools and lakes 11

however, less rural tourism even though it is declared by tourism national authorities as a one of key type but the performance of rural tourism untill now and from methodological point of view and other soft support from national authorities are by no means significant. Factors, influencing tourism development in Slovakia during recent years, can be divided into two effecting groups general external factors and specific internal factors. General external factors: Development (growth and stagnation of the national economy - GDP) and level of economies of the most important countries for inbound tourism of Slovakia; Increase of living standards of inhabitants with impact on their demand on tourism services, slow changes in way of life leisure time; Membership of EU provides for member states sound standard of country and highlights it around Europe New elements in international transport low-cost air carriers which connected Bratislava, Kosice and Poprad with European big cities. Decline of prices of plane tickets generally due to the low-cost carriers and strong competition within air transportation; Building up of motorways network within Slovakia (the majority of tourists from abroad arrive by car or by bus) Growing number of persons with higher education Travelling and tourism as one of important part of way of life Specific internal tourism factors in Slovakia: EU membership since 2004 and new clients from other member states; SF and other EU donor s funds supporting private and public projects in tourism and other related sectors; Accession to zone and introduction of as a national currency and its exchange rate to Czech crown, Hungarian forint and Polish zloty Visa policy to Ukraine and Russia New foreign markets Insufficient performance of national marketing of Slovak NTO and some others factors. Substantial qualitative improvement of provided services More attractive offers of leisure activities Still very reasonable prices for tourists from developed countries. 12

2.1.1.2. Structure of the sector tourist companies and product supply Tourism sector is very fragmented with almost 20 000 registered enterprises. Majority of them (around 90%) are micro-companies that employ up to 9 employees. Only few companies are exceeding limit of employees of SMEs definition (some spa companies, the biggest companies operating at ski resorts, and some hotel chains). Approximately 80% of companies in tourism sectors have a status of natural persons and only around 20% are created as legal person type of companies. By far the biggest share of tourism companies are active in field of HORECA, other important group of enterprises are tour operators and travel agents, ski resorts companies, aqua parks and swimming areas based on thermal water, sport-relaxrecreation and cultural facilities that provide services for tourists. There are a few hundreds of companies that are not active or are not active permanently but occasionally, mainly among travel agents or tourist s guides. In recent years some fall in number of enterprises was recorded but despite the crises not that dramatically. Majority of companies that step out from the business were natural persons. Yearly some few tour operators or travel agents collapsed mainly because of their too optimistic expectations in contracting capacities for summer holidays but were not able to sale holidays packages in the strong competition and a price battle. But the number of bankrupted companies is very low. In some cases, some small accommodation and catering companies are ending up their entrepreneurial activities, very often those which are located in less favourable locations. Besides private business companies there is a part of the tourism sector that consists of not-for-profit organisations such as destination management organisations (37), tourist information centres (over 100), professional associations in field of tourism and other organisations. The share of micro-enterprises up to 9 employees achieves 90,4%, small companies up to 49 employees is around 99%. These figures are valid under assumption that the size structure of not-identified enterprises is similar to the remaining ones. Average size of enterprises in lodging sector is a bit higher in compare to the restaurants or gastronomy sector. Within the structure of sector by size there are not large changes as they were recorded in the first half of 90 s. There are only a few companies over 250 employees and not so many with over 100 persons but they have an important influence on the sector and especially on its quality. They raise the quality level much higher and the small companies usually try to follow them. Big companies usually introduce their own system of training the staff. But it happens quite often that the staffs would like to change their employers and the result is high labour turnover, especially in HORECA sector) and by this way the experience and quality is also distributed within the sector. 13

Structure of the sector from the type of tourism point of view is following: Mountain resorts concentrate the most significant part of tourism facilities and companies (lodging, catering, sport, relax, recreation, conference) that provide winter and summer tourists products; Bigger cities and cities with attractive historical heritage make for both business travellers and leisure travellers Spa resorts Recreation areas based on thermal water seasonal or year-around- operation Water based tourism (alongside lakes, water dams) significant parts of facilities with seasonal operation Alternative tourism is less concentrated and more dispersed in a number of destinations with limited capacities/facilities and services Tourist destinations depending on events, high number of visitors/tourists but concentrated to the specific dates of events (sports, culture, festivals, pilgrimage, exhibitions and other performances). Accommodation sector there are 2 907 establishments (2012) in total excluding private accommodation in houses and flats for permanent living. Number of hotel s facilities achieves 659 and pensions recorded 814 establishments. Hotel sector consists of some hotel chains domestic (SOREA, Slovakia Inn, BHP, ) and international hotel chains that have some establishments in Slovakia or are provided by means of franchise (Accor, Intercontinental Hotels Group, Sheraton Hotels and Resorts, Hilton Hotels Group, Rezidor Hotel Group, Kempinski Hotels, Falkensteiner, Austria Trend Hotels and Resorts, Best Western, ). Ski lifts companies operate approximately in 100 ski resorts and app. 10 out of them are bigger with national or international importance. By number of employees these companies are quite small and majority of employees are seasonal workers. Only one company has more than 250 staff members and does not meet criteria for SME definition. There are 22 locations in Slovakia with a status of spa location that is approved by the government, however, 2 of them are out of operation at the moment Companies that are operating spa facilities belong to the biggest ones within the whole tourism sector and most of the them are exceeding definition for SMEs. Intermediary organisations - tour operators and travel agents count more than 200 companies. Approximately 115 organisations are members of their own association. There is only one of this type of companies which is above the criterion for SME s especially in numbers of staff. 14

2.1.1.3. Labour market issues volume and structure of employment, trends On the basis of special survey carried out by Statistical Office of the SR there are around 100 thousands of employees engaged in HORECA sector. This number includes all employees with full-time job, part-time job, seasonal workers, etc. The index of growth 2006/2010 accounts 155,8. HORECA is traditionally women sector, they dominate by their number and in recent years the share of women of total number of employees even enhanced and it is very much close to two thirds. Table 4. Number of employees in HORECA sector ( 000) Source: SO SR Year Total Women Women in % 2006 101,8 66,3 65,1 2008 105,6 64,5 61,1 2010 99,7 61,3 61,5 The difference between the survey results and data provided to SO SR by employers is very significant (around 40 %). Partially it is caused by inaccuracy but partially it is because of grey economy and unofficial work. The average salary in HORECA represents only app. 55% of the average salary in national economy. There are two main reasons: employers take into account some income from getting tip; grey economy, only a minimum salary is officially paid and remaining part is paid unofficially. 2.1.1.4. Major sectoral organisations employer organisations, trade unions, NGOs In tourism sector as a new element has occurred the foundation of destination tourism organisations under the legal framework of the Act on Tourism Support No 91/2010. These destination organisations are established at two different levels. First one is at the level of micro-regions and the second one at the level of official selfgoverning regions. They should be functioning as the Destination Management Organisation with a strong emphasis on marketing but also with other functions. Currently there are 33 destination management organisations registered at a lower level and 4 DMOs at the level of self-governing regions. Since these organisations are very new it is too early to evaluate their impact on tourism development in the area of their scope of the actions but as soon as they fulfil their aims, intentions and expectations related to their establishments then they should generate strong 15

positive impact on tourism development within relevant regions not only in near future but more importantly in long-term horizon. Confederation of Trade Unions (CTU) of Slovak Republic is an umbrella organisation of particular trade unions, among them also Trade Union of Workers in Commerce and Tourism and Trade Union of Workers in Agriculture (covering agriculture workers providing also services for rural tourism). Confederation of Trade Unions is voluntary association of trade unions and other trade associations at the same level that brought them together for the purpose of protecting the rights and legitimate interests of trade union members-trade unionists. The basic mission of the CTU is to associate trade unions and trade associations for the defence of trade unionists rights and to advocate their economic, social, cultural and other interests and needs that arise from or connect them with their employment and occupation. The National Union of Employers (NUE) is the biggest employers organization in Slovakia, which associates two thirds of employers that produce 70 percent of GDP and 80 percent of the Slovak export. The NUE was established 10 years ago with the intention to protect common employers interests, business rights and citizens freedom as well as to protect the union members against the measures that can lead to the degradation of the equal market/business environment. The NUE advocates its activities on the principles of voluntarily, freedom of opinion and manifestation and political affiliation freedom. In accordance with the fulfilment of the relevant goals, the NUE analyses and evaluates the legislative conditions for doing business with the emphasis on the practical knowledge of its members, co-ordinates proceedings of its members with the focus on the main goals of active participation in establishment and implementation of the economic and social policy of the state. It is also active in preparation and creation of legal enactments regarding important common employers interests, mainly in labour-law, social, tax and wage level area. The NUE co-operates with the state authorities and organisations of the regional governments, with representatives of labour unions and employers associations, commercial and industry chambers, as well as with the other organizations representing local and foreign entrepreneurs and employers. Federation of Employers' Association (FEA) its members include business' and employers' associations, currently there are 21 associations. FEA was founded in 1991 as a legal entity. Its main objective is to create conditions for extensive development of business activities in the Slovak Republic and to promote and protect common business, commercial and employers' interests of its members, primarily by trilateral negotiations in the Council of Economic and Social Agreement of the SR on the issues that are the subject of collective bargaining and agreements with the Slovak Government and Trade Unions including the General Agreement. 16

FEA within its scope of the work primarily co-ordinates the activities of its members to deal with common problems and to prepare common statements, provides comments on draft legislative proposals in order to protect the interests of employers, submits its own proposals for changes and adjustments and is lobbying in the process of development and adoption of important decisions on national and international levels, helps businesses to develop their international activities, etc. Slovak Tourism Association In 2011 seven representatives of the most important nationwide associations of tourism founded The Slovak Tourism Association. It is a voluntary non-political and professionally oriented organization of employers in tourism. The actual members are the Association of Hotels and Restaurants of the Slovak Republic, Slovak Association of Tour Operators and Travel Agents, Bratislava Hotel Association, Lavex - cableways and ski lifts, Historical Hotels of Slovakia, Slovak Association of Rural Tourism and Agro Tourism, the Slovak Tourist Guides Associations, Association of Slovak Spas, Association of Slovak Information Centres and the first entrepreneur subject TATRY MOUNTAIN RESORT plc. The association will be further enhanced e by membership of other associations of tourism both at national and regional level and is open also to other entrepreneurs. The priorities of the Association are the unification of the tourism branch, active approach to legislative changes in the area of tourism, more intensive co-operation with the Slovak National Tourist Board in promoting Slovakia and supporting the domestic tourism. Slovak Association of Tour Operators and Travel Agents is one of self-regulated bodies in this industry. With some 120 members and around 90 percent of the industry turnover covered, the Association is one of the most influential nongovernment body in the tourism sector. The SATO/TA is a democratic and voluntary organisation, incorporated as a legal form of Civic Association. The Association has several major tasks and activities: to promote business interests of its members, to lobby for the members' interests, to cooperate with the State authorities in the field of elaboration of travel and tourism related laws and regulations, to develop business and policy contacts with travel and tourism bodies in Slovakia and abroad, to promote fair competition on the travel and tourism market, to disseminate relevant information on travel tourism business, to watch over the fair execution of Conduct of Business Rules and Business Ethics, to advise customers and public on relevant travel and tourism topics, to promote fair handling with the customers comments and complaints, etc. Lavex cableways and ski lifts National Association of cable cars and ski lifts operators - LAVEX was established in 1967 as a voluntary organization based on the initiative of 35 operators of cable cars and ski lifts. This oldest tourism association includes nearly 200 member organizations that represent considerable majority of this sector. 17

The association was established with the mission to promote cooperation between associated entities but also to represent them towards public authorities and organizations, as well as within international organizations of cable transport. Lavex has at present highly specialized staff for provision all kinds of professional activities which require operators of ski resorts, has an access to the latest information on mountain transport facilities and mountain technologies, participates in the preparation of related legislative and technical standards, organizes all kinds of professional training for employees in ski resorts and publishes its own professional journal of the cable transport and tourism. Slovak Spa Association (SSA) SSA is an Association of legal entities in the field of balneology and spa treatment and other legal persons whose activities contribute to the development and improvement of services in this area. At present it associates 26 members. Activities of the association are especially focused on creating favourable conditions for the development of therapeutic spas, medical wellness and spa treatment activities as well as protecting and representing legitimate interests of its members in relation to the government, national or state controlled institutions as well as to third parties. Activities of the association are also aimed at promotion and protection of the common interests of the association s members, to coordination and regulation of the activities of all its members and the creation of optimal legislative, economic, business, marketing and social conditions suitable for providing spa treatment. Slovak Association of rural tourism and agri-tourism This association is an apolitical, voluntary and interest organization bringing together entities that provide services related to the rural development, exploitation of its resources, particularly in connection with the tourism sector or participates in a creating the necessary and favorable conditions for rural tourism development. The major tasks of the association are the following: - Advocacy for the legitimate interests of businesses in the rural tourism and agri-tourism, as well as other businesses in rural areas, in order to support the development of conditions and infrastructure focused on tourism - Consulting activities and advisory to entrepreneurs in agro-tourism and rural tourism as well as other rural entrepreneurs interested in doing business in rural areas - HRD organizes and delivers trainings, workshops and seminars to bring new knowledge and skills for the development of agro-tourism, rural tourism and rural development - Publishes the catalogue of rural tourism and agro-tourism establishments in Slovakia - Organizes field trips, supports participation in exhibitions, fairs and other events with promoting and advertising activities 18

- Cooperates with other associations, institutions and businesses operating within tourism and rural development - Cooperates with foreign unions and associations of similar focus - Provides comprehensive marketing activities and coordination of other activities for rural development especially if they are focused on tourism. Association s members operate at present 135 rural and agro-tourism facilities. European Slovak Association of agritourism and tourism was established in 2008 as voluntary, non-governmental association of natural and legal persons that have ambition to act at national, crossborder and euro-regional spheres of actions. It is accredited by Ministry of Education for organising certified educational activities in field of economy, agriculture, tourism, IT, accountancy and financial management. The major goals of the association: Development of rural tourism and agri-tourism Support to growth of regional employment Protection of nature and culture heritage Building of partnership in rural areas Support of informatisation and internetisation within regions Protection and development of handcraft skills Cross-border cooperation LLL Partnership related to the EU projects. Number of members of this association is not published. Many other associations and unions were established and operate in tourism sector in order to support its development, competitiveness and economic prosperity. Among them are: Association of Hotels and Restaurants of the Slovak Republic Association of Information Centres in Slovakia Association of Swimming Pools in Slovakia Sommeliers Association of Slovak Republic Association of Small Guesthouses and Lodgings in Slovakia Slovak Tourist Guides Slovak Bartenders Association Slovak Association of Entrepreneurs in Agro-tourism Rural Parliament in Slovakia Association of Towns and Villages, (special section for tourism) Association of Museums in Slovakia Slovak Association of Camping and Caravanning Bratislava Hotels Association Slovak Association of Chefs Association of Historical Hotels Slovakia 19

2.1.1.5. SWOT analysis strengths, weaknesses, opportunities, threats Strengths: location in middle Europe close to the important feeder markets variety and high density of attractions within relatively small surface (both natural and cultural including intangible) renewing of growth of the demand both domestic and international a lot of new investments in tourism (reconstruction and new development) arrival of international hotel s chains know-how, level of quality tourism is defined as a priority for government still favourable price level for visitors from developed countries many secondary school and universities focused on the tourism and hospitality studies Weaknesses: low image of Slovakia as a tourism destination low level of salaries within tourism sector and mainly in HORECA sector HR motivation, knowledge, skills lack of coordination among tourism players within municipalities and regions level of marketing skills performance of national marketing organisation (NTB) structure of inbound foreign travellers export of experienced workers to abroad lack of work forces grey economy the most developed in SMEs Opportunities: new markets and new segments on existing markets new programming period 2014-2020 opportunities for HRD and public tourist infrastructure completion of motorway network around Slovakia arrival of very respected hotel s operators Threats: slowing down of world economy, turbulences on the major feeder markets strong position of to Polish Zloty, HUF and Czech crown increased competitiveness at international markets 20

2.1.2. HUMAN RESOURCES ISSUES 2.1.2.1. General level of education, perceived level of skills and estimates of major deficiencies (qualitative-quantitative) Quantitative deficiencies Within recent years in Slovakia is evident lack of workers mainly for position of cook, waiter, barman, receptionist, tourist guide. There are a few reasons: lot of workers prefer to work in abroad (Austria, UK, Ireland, Italy, USA, cruises, etc.) lower salaries compare to other professions work time during evenings and weekends overtime and irregular working hours There is also huge demand for experienced sales managers for tour operators and travel agent companies. Short job description of mostly lacking positions: Cook in hotel, restaurant, board of boat - choice of work progress, needed raw materials and devices for meal preparation - take over of grocery raw materials - calculation of quantity of particular grocery raw materials for prepared meals - make up a menu and succession of meals - preparation of grocery raw materials for meals production - production of hot meals, diet meals, cold meals, specialities, desserts, cakes, hot drinks - special arrangement of meals for celebratory opportunities - handle with inventory - storing grocery raw materials - execution of hygienic activities, respect safety rules and principles of food safety - planning, supervising and coordination of works in kitchen - supervising of other kitchen staff Waiter serving the meals and drinks in commercial oriented places where the meals and drinks are available - ushering the guests to their places - helping the guests in selection from menu - deal with orders of guests - preparation of menu and succession of meals - collect the payments from guests - accounting of daily receipts - other related tasks 21

Barman serving the drinks behind bar counter - preparation of mixed drinks - deal with orders of guests - collect the payments fo guests - accounting of daily receipts - other related tasks Receptionist - check-in of hotel guests - check-out of hotel guests - deal with bookings of accommodation - collection of payments of guests - providing information and assistance to guests - small sale of drinks, sweets, hygienic goods - exchange of foreign currency - dealing with requests and complaints of guests Tourist guide - accompany the tourist and arrange of their comfortableness - accompany the tourists during sightseeing and description of place of interest - supervision / attention over other services provided to the tourists - fulfil other tasks related to the stay and travelling of tourists Qualitative deficiencies There are huge differences between large and higher standard facilities on one side and smaller and simple facilities on other side. The staff in the first mentioned group is relatively well trained and educated but it is not always a case in smaller facilities of middle and lower qualitative standard. The major qualitative deficiencies of the staff are: not enough customer oriented language and also communicative skills not ambitious enough marketing approach and skills. Within recent years there is demand for new positions that were not actual a few years ago at domestic market: market analysts product manager price specialist IT experts for new applications 22

2.1.2.2. Institutional provisions related to human resources development training Current educational system of technical education in field of tourism consists of: Secondary professional education it lasts 4 or 5 years which ends by GCE. At present there are 31 Hotel s Academies, 28 Associated secondary schools which provide education in more professional fields, e.g. Trade Academies Secondary professional education lasting 2 or 3 years. It ends by final exam, not GCM. These 20 schools are oriented to prepare people not for management but for practical performance (e.g. cook, waiter). University education. Studies for tourism are divided into two levels. The first bachelor s studies - 3 years and second one 5 years long. Now a lot of universities open studies for tourism but two of them (University of Economics Bratislava, Business Faculty and University of Matej Bel Banska Bystrica) have long-term tradition and the best level around Slovakia. Continuous vocational training is provided by certificated educational institutions on the basis of the accreditation of Ministry of Education. The education and training are paid by participants and they provide a super structural studies or courses (e.g. for sommeliers, barmen, requalification, foreign languages, etc.) Also universities operate centres for lifelong education. Ministry of Education has established its agency as specialised organisation for long-life education and it provide studies also for tourism sector. In the year 2007 the government approved Strategy of long-life education and longlife consulting. 2.1.2.3. Training initiatives performed in the area of tourism In beginning of 90 s mainly Ministry of Economy organised some training to improve skills and knowledge of workers in tourism sector. Also the funds of UNDP were used to train especially people from SMEs in tourism sector. Later mainly the professional associations and some private training organisations started to organise the training for specific positions and specific skills and knowledge. Among associations the most active are Slovak association of hotels and restaurants, National association of guest houses and small accommodation establishments, Slovak association of rural tourism, Gurman club, Slovak association of cooks and confectioners, Slovak barman s association, Association of sommeliers of the SR. Tourist guides in Slovakia are obligated to attend the certificated (by Ministry of Education) training and pass the final exam. These training are provided by 19 training organisations within Slovakia. 23

One example of good practise: Two years ago the Culinary Academy of Yves Thuries was established to improve the mastery of the cooks from restaurants focused on providing gastronomic experience. Despite the high price there are enough participants in each year. Among training organisations is the most focused on tourism sector PTK ECHO private company established by one hotel owner. Operational Programme Employment and Social Inclusion 2007-2013 provided wide opportunity for trainings including training in tourism sector. Unlike to other countries the training was not coordinated at national level in order to keep the quality and targeting on the most actual needs and deficiencies. Each applicant, mainly companies and in some cases also associations, used to prepare their own training, but in often not in very efficient way and level. There was not any control and supervision of structure and quality level of training and we will see in near future what impact on tourism development will be achieved. Main conclusions and trends: During reference period tourism in Slovakia there was recorded sharp growth followed by the decline due to the crises, although with a recent renewal of growth and promising development trends. Besides growth of physical indicators there is a very important improvement of quality level. Nevertheless tourism potential is too far from its full exploitation. In the field of human resources there is a lack of particular professions and also the deficit of specific skills and knowledge. Number of vocational schools and universities hat provide the education in the field of tourism do not guarantee any sufficient number of qualified working forces for tourism sector. 2.2. ANALYSIS AND ASSESSMENT OF THE DEVELOPMENT TRENDS OBSERVED FOR THE SPECIALISED TYPES OF TOURISM IN SLOVAKIA Ecotourism / nature tourism the natural spaces that are ideal for this type of tourism are presently used mainly for standard forms and activities or they are almost not used at all. State administrations that keep an eye on protected areas and suppliers have to be more active in this sense. Besides there should be a stronger and more efficient promotion of these kinds of products executed in order to attract people who are interested in nature issues. In this case the demand overran the supply side. 24

Rural tourism represents a set of recreation or leisure activities that are connected to rural environment and are different in comparison with every day activities in more urbanised areas. They are related to the return back to the nature, activities focused on experiencing in provision of basic needs for life. Generally rural tourism is understood as recreation activities, leisure time spent in rural areas including opportunities of having an accommodation in family houses, rural cottages or other accommodation facilities for these purposes. Agro-tourism is a more specialised part of rural tourism that is related to agricultural conditions and agricultural potential for tourism purposes/needs. Generally agrotourism covers all recreation activities that the farmers are able to offer to the tourists. It is necessary to add that agro-tourism is interesting in serving the traditional way of farming and way of processing of farm products (including traditional way of life of farmer s families), not in modern large-scale mass production. Major problem of rural tourism in Slovakia is a lack of traditional family farms in the country except some small territories in Northern and other parts of Slovakia. Mass agricultural production substantially has changed the character of rural areas, way of life in villages and replaced such traditional elements that are in some ways very important for this type of tourism. New constructions that were built up in last 50 60 years miss the character and the charm of traditional village, there is huge rupture in relations between local people and rural life, agriculture and forestry, people are not interested in starting or restarting farming and not at all in traditional way. There is also a lack of ability to communicate with tourists, recover and tell the stories from the past of the villages, families, traditions, habits, etc. to them. At the same time there is a lack of understanding in preparation and serving the traditional local meals and spending some time together with visitors at the dinner while talking about the rural life at present and before. There is not any market analysis regarding the demand for rural tourism. Rural tourism is presently successful because of its orientation on children families with children, i.e. because of the contact with farm animals, local products and also the cuisine which is very important element, too. There are two associations, some NGOs and ad hoc initiative active in this sector. One of the associations includes 135 rural or agri-tourism facilities but around the country there are much more facilities of this type which are not members of any association. Probably, in the future there will be some merging of these associations. Rural tourism products - the most developed seem to be wine routes, especially Small Carpathians Mountains wine route in a vicinity to Bratislava (concentration of demand) and also Austria it is its big advantage. Besides this, there are a lot of contacts and transfer of experience and successful common CBC projects. Other wine routes around Slovakia (Zahorie, Nitrianska, Modrokamenska, Tokajska, Turnianska) started to follow good example of Small Carpathians Mountains wine route, Tokajska wine route is the most developed and successful among them. 25