Countdown for domestic tourism

The government is preparing a number of measures to support domestic tourism, Ukraine’s Deputy Prime Minister and Infrastructure Minister Borys Kolesnikov told a round table of major players on the tourism market.

He also said that in order to develop the hospitality industry, the owners of tourism, recreation, and hotel businesses will see a draft law on the development of tourism by April 30. On May 15, the Cabinet of Ministers will amend it, taking into account the suggestions and feedback from operators. The new document will be based on its Turkish counterpart, passed in 1982. According to Kolesnikov, this bill turned the coast of Turkish Antalya into a luxurious tourism paradise in a short time. Now he hopes to do something of this kind in Ukraine.

Kolesnikov said that the Turkish prototype had a curious paragraph, which allows auctions of seafront lots with the purpose of building tourism objects. Besides, Ukraine is going to “borrow” the paragraph on a tourism bank. The deputy prime minister told The Day that already by the end of 2011 a tourism bank could be created on the basis of one of the banks nationalized by the state. The new bank will provide loans to owners of such land plots on mortgage, the security being the newly purchased plot itself. “The state must provide the funds which tourism business lacks today. First of all, the state has to invest the starting capital stock,” he explained. According to Kolesnikov, in Turkey construction companies used the mechanism of mortgages on land to obtain up to 60 percent of the construction costs via this tourism bank.

Among other measures aimed at supporting the industry is partial compensation, from state funds, for interest rates for hotel construction and the purchasing of buses for the Euro-2012. “We are prepared to bring loan interest rates down to 4.5-5 percent for Ukrainian developers and hotel owners,” explained Kolesnikov. The state is going to allocate up to five billion hryvnias for the compensation of bank interest rates in 2012, and later this number is to reach 10 billion, he added. “I don’t think we need to invent a Ukrainian bicycle. It’s enough to take international experience and add some national coloring,” summarized Kolesnikov.

The members of the roundtable discussion explained what exact coloring they actually missed. The first need, said Olena Shapovalova, president of the Association of Top Tourism Businesses, is a comprehensive program for the development of tourism, since the previous one expired in 2010. It is also necessary to create a uniform state register of tourism objects, so that a travel agent selling a tour to a customer could explain where exactly along the route a bus stop, restroom, or hotel is situated.

Secondly, marketing policies and a PR campaign for Ukraine should be enhanced and promoted at international tourism sites, added Ihor Holubakha, chairman of board, Hamalia CC.

Taxation in the hotel business also needs improving, said Iryna Sedletska, general manager of managing company Premier International. According to her, since the adoption of the Tax Code hotel operators have had a number of questions to clear out. In particular, there is no clear description of the order of tourism duty, while there are exceptions on paying this duty.

All the participants agreed that the development of Western-style tourism infrastructure is a common problem for the market. It is also necessary to provide street signs in English in Ukrainian cities, train guides and interpreters, etc.

Kolesnikov agreed to and supported all these suggestions. In the meantime, he asked tour operators why tours to Ukraine are not to be found abroad. “People who travel abroad have hardly seen any tours to Ukraine. Where is your product?” After this gentle hint to the effect that tour operators were not really active in trying to bring in international tourists, Kolesnikov added that now it was necessary to determine several key points and join forces (those of the state and tour operators) to promote the domestic tourism product. According to him, the first center of interest in tourism in Ukraine lies in North America, with two more in Western Europe (Berlin and London), and perhaps France and Eastern Asia.