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5PROSPECTS OF DEVELOPMENT OF TOURIST FLOW IN UKRAINE
Abstract
The article deals with the structure of tourist flow in Ukraine. The place of Odessa region among other administrative and territorial units of Ukraine by types of tourism was discovered. The article gives a detailed analysis of the essence and significance of cruise tourism to the economy of the state. The low efficiency of the implementation of cruise business development programs and maritime infrastructure modernization were due to insufficient inflow of investments related to the unfavorable investment climate in Ukraine. Analysis of factors and general market tendencies, which influence the state of tourism flow, will offer economic instruments for regional tourism and recreation sphere development stimulation create directions of regional strategies for attraction of tourists.
Keywords
tourist flow, the Odessa region, the cruise destination, the Black Sea cruise region
AUTHORS
Sergey Nezdoyminov
PhD, Associate Professor, Odessa National Economic University, 8, Preobrazhenskaya str., Оdessa, 65082 Ukraine. E-mail: 2072945@gmail.com
Olga Shykina
PhD, Odessa National Economic University, 8, Preobrazhenskaya str., Оdessa, 65082 Ukraine. E-mail: katzchen.gusyeva@gmail.com
Introduction
The modern tendencies of regional social and economic development are in need of upgrading the instruments of region development regulation. The most important are those instruments that can provide regions with incentives for discovering their own resources, motivate them to activate inner development reserves. The reliable source of investment resources should be the development of tourism, moreover each region of Ukraine contains sufficient amount of inviting tourist attractions which, under conditions of relevant advertising and support, could become a considerable source of local budget profit. In accordance with the data provided by the World Economic Forum, Ukraine is using less than a third part of the available tourism and recreation potential. Due to the expert estimations, the revenues of budgets of all levels could amount to $10 billion per year under full-fledged realization of Ukrainian tourism potential, the same amount as countries with commensurate with Ukrainian tourism and recreation potential receive (Oliynyk 2015, 27). Ukraine's integration with the international community, realization of regional development strategies, introduction of market methods management of both economy taken as a whole and certain recreation and tourism enterprises and should be based on marketing researches of tourism flows dynamics and demand for the regional tourism product which is produced and released in the regions of Ukraine.
Results and discussions
Regional problems of development of the tourist flow, analysis of the factors affecting its dynamics attracted the attention of modern researchers in many countries (Zhong, Zhang and Li, 2011; Nenciu, Constandache, Stanciu, and Condrea. 2015; Parte-
Esteban and Alberca-0liver,.2016). One of the tourism development indicators in the separately considered region could be the volume of tourism flow that reflects the actual number of tourists being present on the given territory. As far as is known, country's position on the international tourism market is defined by the net tourism balance -difference between rates of inbound and outbound tourism. Analyzing structure of country's tourism flow the conclusion about the potential of separate tourism directions development may be drawn. In 2014 distribution among separate tourism types in Ukraine was as follows: general amount of served tourists - 2216957 people (100.00%), inbound tourism 16618 people (0.75%); outbound tourism - 1925344 people (86.85%); domestic tourism - 274995 people (12.40%) (Table 1).
TABLE 1. TOURIST'S DISTRIBUTION BY THE TOURISM TYPES IN 2012-2014 (PEOPLE)
Region Years Change, The From total number:
2012 -2014,% total number of tourists Inbound tourism Outbound tourism Domestic tourism
2012 2680507 262465 1774737 643305
Ukraine 2013 - 17.29% 3067747 221272 2270001 576474
2014 2216957 16618 1925344 274995
The structure of tourist flow 2012 9.80%% 66.20%% 24.00%%
2013 - 100.00% 7.21%% 74.00%% 18.79%%
2014 0.75%% 86.85%% 12.40%%
2012 51808 9509 30628 11671
Odessa region 2013 - 37.32% 46845 6959 33910 5976
2014 32475 2954 24987 4534
The structure of tourist flow 2012 18.35%% 59.12%% 22.53%%
2013 - 100.00%% 14.85%% 72.39%% 12.76
2014 9.10%% 76.94%% 13.96%%
Source: Tourist activity in Ukraine in 2012-2014: Statistical Yearbook
According to official data of statistics, scientists' research on the state of organized tourism, Ukraine is country with the higher number of citizens who travel abroad than number of foreigners visiting its own territory. Prior to political crisis, the share of inbound tourism in the total amount equaled to 7.21% in 2013 and 9.80% in 2012. The share of domestic tourism is decreasing in both relative and absolute terms in 2012 it was 24.00% while in 2014 - 12.40%.The general amount of tourists in Odessa region also decreased by 37.32% that corresponds to the 13th place (see Figure 1). Positive value of the given indicator can be traced only in Kyiv, the biggest decrease in percentage in Luhansk, Donetsk, Chernihiv and Kirovograd regions. Distribution by type of tourism in Odessa region is slightly different from the general in the country. The region inbound tourism occupies a larger share in 2014 than in Ukraine as a whole - 9.10%, although the trend over the past 3 years tends towards decline. The biggest share falls on outbound tourism - 76.94%, domestic tourism takes the second place with the index of 13.96%.
20,00% 0,00% -20,00% -40,00% -60,00% -80,00% -100,00%
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FIGURE 1. CHANGE IN THE TOTAL TOURIST AMOUNT IN THE REGIONS OF UKRAINE FOR 2012 -
2014 (SOURCE: SHYKINA, 2015, 117)
Over the past three years Odessa region has risen from 8th (2012-2013) to the 5th place (2014) by the total number of served tourists. Judging by the numbers, in 2014 tourism flow constituted 32.5 thousand people that is 30.7% (or 14.4 thousand people) less than in 2013. In terms of inbound tourism Odessa region occupies the 2nd place in 2014, with only Kyiv preceding, the reason of such change (in 2012-2013 - 5th place) is exclusion of Autonomous Republic of Crimea and city of Sevastopol from the rating and dramatic decline of inbound organized tourism in Lviv region. We can state that the closest competitors for inbound tourism are Kyiv city, Lviv and Ivano-Frankivsk region (Shykina and Liptuga, 2015). According to the research, outbound tourism in Odessa region ranks first in the distribution by the types of organized tourism, for the last three years in the outbound tourism rating of Ukraine Odessa region has risen from the 5th (2012-2013) to the 4th place in 2014, but the total amount of served outbound tourists decreased in 2014 in comparison with 2013 by 57.6% or by 4.0 thousand people. Number of served domestic tourists in Odessa region in the last three years was constantly falling and in 2014 constituted 4.5 thousand people that is 24.1% (or 1.4 thousand people) less than in 2013 (Table 2). Nevertheless in the rating of Ukrainian administrative units Odessa region moved from 11th position in 2013 to the 7th position in 2014 that confirms the general decline of the domestic tourism in the country. At the same time services of Odessa region tour operators and travel agents were used by the 3.0 thousand foreign tourists from 28 world countries. The highest number of foreign tourists arrived from Belarus - 1.5 thousand.
TABLE 2. DISTRIBUTION OF FOREIGN CITIZENS BY THE COUNTRIES, FROM WHICH THEY ARRIVED TO ODESSA REGION
Rank 2012 2013 2014
Country people % Country people % Country people %
1 1F R 5435 57,16 RF 5322 76,48 Belarus 1535 51,96
2 Germany 1164 12,24 USA 190 2,73 Poland 445 15,06
3 USA 448 4,71 Great Britain 185 2,66 Georgia 336 11,37
4 Austria 252 2,65 Belarus 164 2,36 RF 238 8,06
5 Great Britain 245 2,58 Australia 154 2,21 Lithuania 138 4,67
6 Turkey 235 2,47 Austria 147 2,11 Israel 62 2,10
7 Italy 232 2,44 Netherlands 119 1,71 Italy 38 1,29
8 Australia 200 2,10 Italy 97 1,39 Turkey 36 1,22
9 Netherlands 146 1,54 Japan 75 1,08 Belgium 31 1,05
10 Hungary 120 1,26 Germany 65 0,93 France 28 0,95
1 Russian Federation
Source: Tourist activity in Ukraine in 2012-2014: Statistical Yearbook
What should be noted is a rapid decline in demand for tours in Odessa region from countries such as Russian Federation (decrease from 76.48% in 2013 to 8.06% in 2014), the USA (190 tourists arrived in 2013 while in 2014 only 27 tourists used the services of tour operators and travel agents), Great Britain (185 tourists in 2013 compared to 9 tourists in 2014). There are a growing number of tourists from the following countries: Poland (in 2013 no one came, and in 2014 - 445 tourists), Georgia (2013 - 7 tourists, in 2014 - 336), Lithuania (in 2013 - no tourists, in 2014 - 138). Regional studies of the tourism market show that in 2014 249 subjects (172 legal entities and 77 natural persons-entrepreneurs) performed tourist activities in Odessa region, services of which were used by 43.4 thousand of tourists and sightseers, while in 2013 there were 302 subjects of tourism, which provided services to 61.6 thousand of tourists and sightseers. Researches of the market of marine passenger transportations has shown that not high efficiency of marine cruise tourism functioning in Black Sea regions of Ukraine is to the greatest extent defined by not taking into consideration its vital part which is modernization of the port and tourism infrastructure, construction of cruise fleet. Thus the amount of investments in the water transport sector in 2014 is only 0.2 billion UAH or 1% of the total industrial investment. (Statistical data about investment projects, 2015). Reduction of the sea passenger transportation in Ukraine has been caused by their unprofitability and a decrease in the number of passenger ships which are suitable for use. High payment rates on loans, burdensome taxes, higher than those imposed on ship owners in other countries, have led to the loss of marine cruise fleet, its physical and moral deterioration. Under such circumstances state appeared unable to prepare and implement reformation of the sector timely, take effective measures aimed at creating legal framework on water transport which would ensure implementation of the necessary support tools and its withdrawal from the systemic crisis, drawing on the experience of other countries.
Analysis of the problems of the cruise market development shows that for successful functioning of marine tourism an integrated development of all elements of cruise ship industry and corresponding regional tourism and port infrastructure is necessary (Papathanassis 2016, 170). Over the past five years, the number of ship entries to the ports of Ukraine increased by 40% while number of passengers by 53.4%. Most often, the Black Sea region is visited by tourists from Germany, Great Britain and Italy. The share of cruise tourists from the CIS countries in the ports of Ukraine is 6.1%, while in 2012 for example it was less than 1%. According to experts, the low efficiency of the
implementation of cruise business development programs and maritime infrastructure modernization were due to insufficient inflow of investments related to the unfavorable investment climate in Ukraine (Nezdoyminov 2015, 567). Athens, 26 May 2015 - CLIA Europe, the association representing the 40 billion euro cruise industry in Europe, and MedCruise, the association of cruise ports in the Mediterranean and its adjoining seas, have signed a strategic partnership agreement to collaborate, sponsor and support the advancement of a European travel agent training program. Set up in Rome in 1996, MedCruise is the Association of Mediterranean Cruise Ports. MedCruise's mission is to promote the cruise industry in the Mediterranean and its adjoining seas. The Association assists its members in benefiting from the growth of the cruise industry by providing networking, promotional and professional development opportunities. Today, the association has grown to 74 members representing more than 100 ports around the Mediterranean region, including the Black Sea, the Red Sea and the Near Atlantic, plus 31 associate members, representing other associations, tourist boards and ship/port agents. Countries represented in MedCruise: Croatia, Cyprus, Egypt, France, Georgia, Gibraltar, Greece, Italy, Malta, Monaco, Montenegro, Portugal, Romania, Russia, Slovenia, Ukraine, Spain, Syria, Tunisia, Turkey. MedCruise members in Black sea are Batumi, Constantza, Odessa, Sevastopol, Trabzon, Sinop, Sochi. The total of cruise passenger visits at the 72 MedCruise port members for which data are available in 2014 reached 25,8 million (Figure 2). Comparing to the previous year, this number is 7,28% lower, as the cruise passenger movements that had taken place in 2013 were 27,8 million. 2013 stands as the year when all records were broken (CLIA Contribution of Cruise Tourism to the Economies of Europe 2014).
2014 (72) 2012 (74) 2010 (73) 2008 (72) 2006 (70) 2004 (70) 2002 (62) 2000 (59)
0,0 5,0 10,0 15,0 20,0 25,0 30,0
Total Pax. Movements (in millions)
FIGURE 2. CRUISE PASSENGERS GROWTH ON MEDCRUISE PORTS (2000-2014) (SOURCE: CLIA CONTRIBUTION OF CRUISE TOURISM TO THE ECONOMIES OF EUROPE, 2014)
As for Ukraine, the ports of the Black Sea region have enough great potential for the development of cruise tourism. In the basins of the Caribbean and Mediterranean Seas cruise ship are crowded. The fight for customers makes the cruise companies to seek new markets for their services. Black Sea region is suitable for this like no other, because, in fact, is part of a Mediterranean cruise market. An estimated 6.12 million cruise passengers embarked on their cruises from European ports in 2015. The European market has grown by 111% over the last ten years but with economic growth moderating over the past five years, European-sourced passengers have only increased by about 18% since 2010 (Contribution of Cruise Tourism to the Economies of Europe, 2015). As the 2015 data show, tourists from the Black Sea countries (Russian Federation, Ukraine and Georgia) make up to 1.7% of the European cruise market (Table 3). Ukraine could initiate establishment of
an international cruise cluster of ports of the Black Sea. Black Sea by its geographical location is not transit, therefore, in order to stand out in an independent direction for mass cruise tourism at least five ports should have infrastructure capable of handling vessels up more than 300 m. Today this infrastructure have two Black Sea ports - Odessa (Ukraine) and Constanta (Romania). Now the modernization of facilities for receiving passengers is going on in ports of Burgas (Bulgaria), Sochi (Russia) and Batumi (Georgia). After this the Black Sea region can declare itself as cruise ship direction for the mass segment (Gerasimenko et al. 2013, 267). The cruise market in Ukraine is in a state of decline. According to the operative data of the Department of Tourism Service and European integration of the Port Authority, the number of passenger ships' visits to Odessa in 2015 was 13, which is 15 ship calls less than last year and 93 ship less than in 2013. For the season 2016 the port administration has already received 33 requests for visits by cruise ships.
TABLE 3. CRUISE PASSENGERS BY COUNTRY OF EMBARKATION, 2015
Country Passengers Share of Total
Italy 2,000,000 32.7%
Spain 1,282,000 20.9%
UK 1,060,000 17.3%
Germany 584,800 9.6%
France 309,600 5.1%
Greece 201,200 3.3%
Denmark 185,000 3.0%
Sweden 92,800 1.5%
Netherlands 86,000 1.4%
Malta 70,300 1.1%
Cyprus 33,000 0.5%
Croatia 31,400 0.5%
Norway 24,900 0.4%
Other EU + 3 56,900 1.0%
EU+3 6,017,900 98.3%
Other Europe1 104,400 1.7%
Total 6,122,300 100.0%
1 Russia, Georgia and Ukraine.
However this number may vary in one and in the other direction, depending on many factors. Among the negative factors the first place can be given to the transformation of the Crimea in "gray" area for cruise line operators. The historically formed ship courses Odessa-Yalta, Odessa-Yalta-Sevastopol were brands in the regional market. Odesa, by itself, remain is very hospitable and very attractive place for tourists, but it cannot recoup the costs of the charterer in the north-western part of the Black Sea. However, positive things do occur. Thus the administration of the Odessa seaport successfully passed the audit of quality management system for compliance with ISO 9001-2008. A certified quality system improves the production activity of the company, strengthens its image, competitiveness and investment attractiveness of the market, allows to expand the range of services. Through membership in MEDCRUISE (since 2008), the port of Odessa failed to effectively implement several image projects, gave notable impulse to the development of the industry of sea travel in the Black Sea region. Among other things, it should be noted the success of the international conference Black Sea Cruises. But the main result of this partnership, of course, was an increase in the number of visits to Odessa cruise ships under foreign flag in 2013 (more than 100 calls). The local authorities should take into account the experience of the development of cruise tourism in Dubrovnik. Further
development of cruise tourism will depend exclusively on the dynamics of solving the existing issues, organisation of demand management and destination product (Perucic and Puh, 2012, 214; Bajs, 2015,128). Using the responsible tourism lens to view cruise tourism can be a useful exercise. It helps focus the analysis of 'sustainability' on the local community and stakeholders that are effected by cruise tourism (Klein, 2011, 114). Another big problem of the cruises industry (especially in some areas of the Mediterranean and Black Sea) is the lack of modern port infrastructure, appropriate new passenger ships (larger, faster, more luxurious, etc.) in several ports, and the existence of different national regulations on environmental protection, safety of the ship, navigation and passengers etc. So, it is necessary that contractual and economic relations between ports and cruise companies are developed as long-term projects. This cooperation should not be just a business relationship but a complex "contract" for cooperation between companies - local and central authorities, ensuring sustainable development of tourism areas, directly related to economic efficiency, environmental marine and terrestrial protection. A good example would be that of cooperation between airlines and airports in many parts of the world, even if they are different realities. Another concern is the uncertainty of political, social and military field in some destinations in North Africa, Eastern Mediterranean and Black Sea. Political and economic stability are critical factors on business and management and marketing of passenger companies. The Arab Spring, instability that was installed in the area, the war in Syria, piracy, terrorist threats, the crisis in Ukraine have forced companies to rethink their strategy quickly and suddenly change their itineraries planned, with serious economic repercussions on the profitability of companies, and the planned tourist destinations, now avoided due to high degree of risk (Bosneagu, Coca, and Sorescu, 2015, 350).
Over 120 representatives from marine travel industry companies will participate in the 48th MedCruise General Assembly of Mediterranean and Black Seas cruise Ports. The forum of the world's largest association of cruise operators and ports has been opened 22 June 2016 with a briefing at the conference hall of «Bristol» hotel in Odessa. According to the organizers, the representatives of the Directorate from over 70 companies that define the 2/3 routes of the world's cruise fleet attend the event. Among them are the famous corporations such as Royal Caribbean Cruise Line, Holland America Group, MSC Crociere, Azamara Cruises, Costa Crociere, SilverSea and others. This major cruise event was dedicated the celebrations of the 20 years of the Association. During the General Assembly meeting, MedCruise member representatives together with other esteemed guests will discuss the latest developments of the cruise sector, as well as the implications and prospects of cruising in the Med and its adjoining seas. The position of Odessa as an international tourist center, will carry information about South Palmyra, as a safe, economically attractive city with a rich historical cultural heritage and natural and recreational potential, will present profitable opportunities of passenger terminal in Odessa port. Professionals believe that modernization of the port infrastructure will annually increase number of ship entries in Ukrainian ports by 10-15% and will help to receive annually not less than 60 thousand tourists, flatten seasonality and provide jobs for the tourism industry. It will subsequently attract another international cruise operators to the Black Sea basin. The development of passenger complex of Odessa seaport presupposes the following: bring the design capacity of the complex - to 1 million passengers; length of berths - to 1370 meters; depth at the berth - 11.5 meters. The total cost of the investment project realization equals to 120 million UAH.
Conclusion
This way, timely analysis of factors and general market tendencies which influence the state of tourism flow will offer economic instruments of regional tourism and
recreation sphere development stimulation create directions of regional strategies on attraction of tourists. Following to the data of the conducted research, formation of certain tendencies on the structure of tourist flow in Odessa region can be noted:
- decline of tourists activity reflects not only state of inner market environment but also a tourism reputation of Ukraine among world markets, that influences investment attractiveness of the field and regions;
- tendency of outbound flow prevailing over inbound that negatively affects net tourism balance in Odessa region;
- in the structure of tourism flow bigger share consists of the trips with "leisure and recreation" purpose while business, medical, sport and specialized tourism contain potential for the development by means of special measures conduction;
- the rise of Odessa region tourism field level can be observed in distribution pattern in Ukraine as a whole according to the tourism types and in relative terms due to exclusion of Autonomous Republic of Crimea, Sevastopol and Donetsk region from the tourism market;
- motivation and geographic factors of influence on the distribution of tourist flow of inbound and outbound tourism are worth noting.
Recommendations
Positioning of Ukraine as a maritime state requires a consideration of global trends in world maritime trade and keeping those trends that occur in the Black Sea region. The necessity of the development of national marine economy and port infrastructure is dictated by the high profitability of market cruise services through a world-recognized competitive advantages of waterway transport (environmental friendliness, low cost, investment attractiveness, etc.). Thus, government authorities, port and cruise business entrepreneurs need to make significant efforts to promote Black Sea tourist region in the European market of cruise tourism. The development of cruise shipping stimulates the development of related sectors of the regional economy (hospitality, catering, transport, shipbuilding, ship repair, etc.). It promotes investment, creates a multiplier effect for regional economic development, and therefore - helps to create new jobs.
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