Inbound tourism – the Cinderella of the Romanian economy
Same with other industries, tourism has many faces. In the past decades, it has been one of the main drivers of economic growth in different developing areas of the globe. According to the “OECD Tourism Trends and Policies 2024” report, “Before the COVID-19 pandemic, the tourism sector directly contributed 4.4% of GDP and 6.9% of employment, and tourism generated 20.4% of service-related exports in OECD countries, on average.” Yet here, in Romania, we seem to be blind to its many benefits.
First, some basic definitions. Domestic tourism represents the travels of the citizens within the country borders. It contributes to the spread of wealth from large and medium urban centers to small urban centers and the countryside. Outbound or outgoing tourism represents the travels of the citizens to foreign countries, our “imports”. The largest markets where Romanians choose to spend their money are, by far, Turkey, Greece and Bulgaria. Inbound or incoming tourism refers to the travels that foreign citizens choose to make in our country, and that counts as our “exports”. While some countries really make a living out of inbound tourism, to the point where it counts for too much of their GDP, our country fails so far to cash in on the opportunities this industry offers.
In 2023, while outgoing tourism counted for 8.5 billion euros, incoming and domestic tourism only counted for 4.6 billion euros. Approximately 17% of the trade deficit of our country is due to tourism, as incoming tourism is bringing in significantly less money than the money outgoing tourism is sending across the borders. This situation is quite unusual. In Europe only well developed, industrial economies, such as Germany or the UK, register negative trade balance in the tourism sector. For everyone else, tourism is and has always been an extraordinary source of income and wealth.
Somehow, foreign travelers do not consider spending their hard-earned money in our country, for vacations or other purposes. Why does this happen? The roots of the phenomenon go back decades ago and can be split into three main categories. First is the lack of adequate attention at governing level. Tourism has never been considered important or a priority, and therefore it never got the thrust needed for industry to truly develop. The central authorities overseeing it have been understaffed and underfunded for most of the recent past and the lack of vision and direction resulted in poor achievements. Despite flamboyant texts issued periodically by the Ministry of Economy, Entrepreneurship and Tourism praising extraordinary results, Romania is one of the least visited countries in Europe by foreign travelers.
Second is the lack of adequate marketing. A touristic destination is a very complex product, but it’s still a product and it needs marketing and advertising to be bought by the public. So far, the only marketing Romania had could be summarized as following: “We have a beautiful, green, country, with beautiful traditions and we offer bread and salt on arrival”. Well, in a crowded market, where dozens and dozens of beautiful, green, countries with nice traditions target well-travelled individuals, this very basic approach is simply not good enough.
The third barrier to Romania booming as a travel destination is the lack of adequate infrastructure. The country is not equipped to receive large numbers of visitors and all resources for travel industry are scarce. Just an example, 17 years after joining the EU, Bucharest still does not host a high-end hotel brand and does not have an adequate and modern convention center.
With a new government in the making and new governing trends, political leaders should take a closer look at this sector of the economy, as it could turn in the future from a poor lady to a princess for everyone’s benefit.
Oana Iacob – Managing Director Liberty International Romania, member of Liberty International Tourism Group. LITG is the largest private-owned destination management company in the world, handling inbound tourism across all continents since 1991.
23.12.2024 / Editor, Andreea Dragan
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