ANALYSIS OF DESTINATION MANAGEMENT SYSTEM IN THE PREŠOV REGION OF THE SLOVAK REPUBLIC ANALYSIS OF DESTINATION MANAGEMENT SYSTEM TOURISM INFORMATION CENTERS AND DESTINATION MANAGEMENT ORGANIZATIONS IN THE PREŠOV REGION OF SLOVAK REPUBLIC © 2019 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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CONTENTS Acknowledgements 5 Acronyms 6 Overview 7 BACKGROUND 11 TOURISM MACROTRENDS IN SLOVAK REPUBLIC AND PRESOV REGION 15 National Travel and Tourism Trends 16 Travel and Tourism Trends in the Prešov Region 17 Regional Destination Management in Slovak Republic 19 MANAGEMENT AND PERFORMANCE OF TICS AND DMOS 23 Performance Principles of Destination Management 24 Management and Performance of TICs in PSK 25 Management and Performance of DMOs in PSK 28 CONCLUSIONS AND RECOMMENDATIONS 35 ANNEX  TICs AND DMOs SURVEYED 38 Notes 39 Bibliography 39 FIGURES FIGURE 1  Origins of Foreign Visitors in PSK 18 FIGURE 2  DMO Membership Structure in Slovak Republic 20 FIGURE 3  TICs in the Prešov Region 25 FIGURE 4  TIC Structural and Operational Status (n=26) 26 FIGURE 5  Types of Fee-based TIC Services (n=26) 26 FIGURE 6  Full-Time Staff Employed in TICs (n=26) 27 FIGURE 7  Use of ICTs by TICs for internal communication 28 FIGURE 8  Subregional DMOs in Prešov Region 28 FIGURE 9  DMO Membership Structure 31 FIGURE 10  Current Financial and Data Flows to TICs and DMOs 32 TABLES TABLE 1  The Contribution of Tourism to Slovak GDP 16 TABLE 2  National Tourism: Average Amount Spent per Trip (Euros) 16 TABLE 3  Destination Preferences of Domestic Tourists, 2015, Residents of Selected Districts in Slovak Republic 16 TABLE 4  Foreign Visitors to PSK and Snina District Staying a Minimum of 2 Days 17 TABLE 5  Accommodation Statistics in 2017 18 TABLE 6  PSK Accommodation Revenues in 2017 18 TABLE 7  Customer Targeted Tourism Routes in PSK 19 TABLE 8  Function, Location, and Groups Targeted by TICs 21 TABLE 9  TIC Structure and Activities of TICs in Prešov Region 25 TABLE 10  Membership Structure of Individual DMOs in PSK 29 TABLE 11  Budgeted Activity Lines of Subregional DMOs in PSK 29 TABLE 12  Subregional DMOs’ Budgets and Sources of Income 31 ACKNOWLEDGEMENTS To prepare this report a World Bank Group (WBG) team conducted five missions to Slovak Republic, field visits, and workshops, during which it collaborated with Slovak experts. Effective guidance was provided by Paul Kriss (World Bank Lead Urban Specialist) and Grzegorz Aleksander Wolszczak (World Bank Urban Specialist). The team is indebted to the executive and administrative staff of the Prešov Self-Governing Region, which generously contributed premises, support, and endless hours of dynamic and dedicated dis- cussions. The WBG team is particularly grateful to Mr. Milan Majersky, Dr. Rudolf Bauer, and Ms. Maria Bilova. The missions would also not have been possible without the cooperation of the TIC and DMO managers and employees, whose time and willingness to be interviewed we deeply appreciate. Special thanks go to all the Slovak and international experts who directly contributed their exper- tise as the team shaped this report and the analytical findings. The report collates contributions from Prof. Ludmila Novacka (University of Economics in Bratislava, World Bank consultant), Jordanka Tomkova PhD. (World Bank consultant), Mr. Vladimir Benc (World Bank consultant), and Guido Licciardi PhD. (World Bank Senior Urban Development Specialist). A draft version of this report was issued in January 2019 to the EC and PSK Regional Administration. As much as possible, their comments have been incorporated into this revised verion of the report, which was issued in March 2019. The findings, interpretations, and conclusions of the authors expressed here do not reflect the views of the World Bank Group, its Board of Directors, or the governments they represent. 5 ACRONYMS AICES Association of Information Centers of Slovakia CURI Catching-up Regions Initiative DMO Destination Management Organisation DMS Destination Management System EC European Commission GDP Gross domestic product ICT Information communication technologies NP National Park PPP Public-private partnership PSK Prešovský Samosprávny Kraj, Presov Self-Governing Region RDMO Regional Destination Management Organisation(s) SDGs Sustainable Development Goal(s) SME Small and medium enterprise TDMIS Tourism Destination Management Information Systems TIC Tourism Information Center UNWTO UN World Tourism Organization WBG World Bank Group WTTC World Travel and Tourism Council 6 Analysis of Destination Management System in the Prešov Region of Slovak Republic OVERVIEW As part of the European Commission’s Catching-up Regions Initiative, this Analysis of the Destination Management System, Tourism Information Centers (TICs), and Destination Management Organizations (DMOs) in the Prešov Region of Slovak Republic examines the effectiveness of the current regional des- tination management system (DMS) in the Prešov Self-Governing Region (PSK) of Slovak Republic, its potential, and opportunities to harness that potential to drive the region’s equitable economic growth. Based on comprehensive fieldwork by the World Bank Group (WBG) task team, the report provides evidence-based recommendations to inform PSK’s future policies, strategic planning, and investments in regional tourism development, especially in one of its most lagging areas, in the district of Snina. The location of PSK and its unique natural features and cultural heritage give it considerable poten- tial to be a tourism-friendly destination — but an attractive location alone is not enough to draw tourist crowds. Poor basic infrastructure is one problem that prevents Snina from unleashing its tourism potential. To remove this bottleneck, the regional and perhaps national administrations need to honor several strategic, structural, and investment commitments before Snina can envis- age sustainable economic growth to which tourism can contribute. One recommendation is to adjust Slovak Republic’s highly asymmetric path dependencies for how intra-regional investments in tourism infrastructure are distributed in PSK. While the region’s North-Western districts are home to the High and Low Tatra mountains, which have an established tourism clientele, high revenues, sophisticated marketing, and well-maintained infrastructure that commendably attract attention from both public and private investors, the less developed Eastern districts, such as Snina, are under-funded and trail the Tatras continu- ously. Despite their natural beauty, Snina district and the geographic remoteness of the Poloniny National Park are far less accessible, and deteriorating infrastructure currently limits the area to less intense, low-revenue tourism. For tourists, the transaction costs (travel time, distance) are high and the value-added in district tourism offers (accommodation, infrastructure, attractions) is questionable. These intra-regional asymmetries are barriers to the equitable development of the region as a whole. Without well-targeted equalization measures and an infusion of public invest- ment into basic infrastructure — roads, water, and sewage it is unrealistic to expect any transfor- mation in the district’s economic outlook. Moreover, too few resources are being spent on the area to heighten its tourism potential. Other problems are severe institutional fragmentation, minimal coordination, and little oper- ational connectivity between Tourist Information Centers (TICs) and Destination Management Organizations (DMOs), in PSK and beyond. This is partly because TIC and DMO budget structures vary considerably, but also because they tend to depend on municipal governments’ contributions, which offer TICs and DMOs little incentive to cooperate and promote cross-boundary destinations. However, rather than merely finding new incentives for coordination of different TICs and DMOs, deep restructuring is recommended that would fuse today’s TICs and DMOs into a single regional, well-resourced, well-managed, and well-marketed Destination Management Organization (DMO). While structurally this may take time, relatively soon PSK can begin to take strategic steps forward. In fact, PSK is already doing so; in 2019 it allocated more budget to support regional DMO’s activities. 7 Regional tourism in PSK could also benefit considerably from more systematic collection and publication of useful statistics disaggregated by region and subregion to inform policy and stra- tegic decision-making. Scaling up connectivity between destinations within the region, design- ing attractive tourism products, and continued innovation to generate more revenue should also be actively supported. Finally, to make this all happen, PSK and major tourism stakeholders would be well-advised to work together to elaborate a comprehensive regional strategy for tourism development, which is cur- rently lacking. Such a strategy, essential to advancing tourism in the region, should build from the realization that the focal destination is the entire region, not just individual parts within it. Conclusions and the recommendations emerging from this report are detailed in chapter 4 but can be summarized as follows: 1. Integrate and consolidate subregional DMOs and TICs into a single competitive regional DMO. 2. Address intra-regional investment asymmetries. 3. Scale up connections between tourism products and destinations within the region. 4. Continue support for innovation, enhanced marketing, and a larger proportion of revenue-generating tourism services. 5. Adopt an evidenced-based approach to strategic planning in the tourism sector through systematic collection and use of data. 6. Draft a Regional Strategy for Tourism Development. 8 Analysis of Destination Management System in the Prešov Region of Slovak Republic BACKGROUND The Catching-up Regions Initiative (CURI) Early in 2018, the European Commission (EC) launched the Catching-up Regions Initiative (CURI) in Prešov. While Prešov (PSK) is the largest region in Slovak Republic by population and its GDP is growing rapidly, its regional development and per capita income indicators are far below EU and Slovak averages. Currently deterring Prešov’s economic development are such problems as brain drain, high unemployment, especially of young people, exclusion of minority groups, mismatch between education and the demands of the local labor market, lack of cooperation in innovation, and underutilization of financial resources and structural funds. Through the CURI initiative,1 the EC seeks to help Member States and regions to better invest and manage Cohesion Policy funds for more inclusive and equitable socioeconomic growth (MEMO 15/46542). In partnership with Slovak national authorities, the EC has commissioned the World Bank Group (WBG) to provide tailored support to PSK and local stakeholders. By early 2018, it was agreed that the partners would design and conduct a solid multisectoral analysis and action plan for trans- forming the PSK economy and produce recommendations for reforms to improve the local invest- ment environment and identify investments to enhance the region’s economic competitiveness. Targeting for the analysis four sectors with transformational potential — vocational training and education, energy efficiency, applied GIS and data management, and regional tourism — the WBG team assessed the status, gaps, challenges, and, most important, the opportunities and formu- lated recommendations for equitable income generation and opportunities for socioeconomic growth in the region. This process will also facilitate assistance to the PSK regional administra- tion to improve its capacity to draw funding from the 10 EU Cohesion Policy programs in support of the recommendations and coordinate the necessary actions. Support for Prešov region’s tourism potential Assessing how tourism can contribute to equitable PSK growth is one of the four sectors for anal- ysis. The economic impact of travel and tourism on global GDP and sustainable economic growth is well-established. With annual average growth of 5 percent, in 2017 tourism accounted for 10.4 percent of global GDP and 313 million jobs — 9.9 percent of total employment. In Slovak Republic, the direct contribution of tourism to GDP was 2.6 percent, with 67,500 direct jobs (2.7 percent of total employment) and 155,500 direct and indirect jobs (6.1 percent of total employment) (WTTC 2018). Yet in the contribution of tourism to GDP the country still ranks low, 144th of 185 countries. This is worrisome, since the tourism contribution to national and global economies is expected to grow. Moreover, according to the UN World Tourism Organization (UNWTO), tourism could contribute, directly or indirectly, to the achievement of all the Sustainable Development Goals (SDG), but especially Goal 8 — Decent Work and Economic Growth, Goal 12 — Responsible Consumption and Production, and Goal 14 — Life Below Water. Recognizing the high potential yet lagging actual economic performance of tourism in PSK, this report examines factors that impede equitable growth in the region, with special atten- tion to the structural role in tourism development of its Tourism Information Centers (TICs) and Destination Management Organisations (DMOs). The analysis looked at their operational capacity, inter-connectivity, services, products, and potential infrastructure gaps. It identified 12 Analysis of Destination Management System in the Prešov Region of Slovak Republic a number of recommendations for actions and investments for upgrading the region’s Destination Management System (DMS) to meet the interests of current and future visitors, businesses, and the communities they serve. Methodology The analyses reported here are based on quantitative and qualitative field research complemented by a comprehensive desktop review of documents, legislation, and official statistics. An online sur- vey based on Association of Information Centers of Slovak Republic (AICES)’s performance stand- ards for TICs,3 the targeted all 34 PSK TICs and was conducted between July and September 2018; 26 TICs completed the survey, a response rate of 79 percent. Semi-structured field interviews were conducted in individual TICs to corroborate the survey findings. Using the same methodology, all eight DMOs in PSK — seven subregional/ district, one regional — were also surveyed and interviewed. A Vensim Causal Loop Diagram was used to derive a dynamic model of financial flows and tour- ist data for TICs and DMOs. This report has four parts. It first looks at macro-trends, realities, and prospects for tourism in Slovak Republic and the PSK. The second and third parts summarize survey findings for insti- tutional aspects of the TICs and the DMOs, such as geographic coverage and relevance; organiza- tional, membership, and management structures; services and marketing capacities; visitor trends; links to other tourism institutions and the private sector; and financial management, budgets, and human resources. The report then draws on these findings for recommendations on how TICs and DMOs could be improved and supported in order to create an enabling environment for sustaina- ble tourism development in PSK, thus for the region’s economic growth. Background 13 TOURISM MACROTRENDS IN SLOVAK REPUBLIC AND PRESOV REGION NATIONAL TRAVEL AND TOURISM TRENDS In 2017, according to the World Travel and Tourism Council (WTTC),4 the contribution of travel and tour- ism to Slovak Republic’s GDP was slightly lower than that of its regional neighbors, coming in at 2.7 per- cent (€2.5bn) with an indirect value to its national economy of 6.1 percent. In 2018, the contribution value is an estimated 4.6 percent (€7.9 bn), and TABLE 1  The Contribution of Tourism to Slovak GDP by 2028 is expected to rise to 177,000 direct and indirect jobs with a value of 7.2 percent of GDP. Travel & Tourism's Direct Contribution to GDP 2017 (US$bn) 5 Italy 106.8 In 2017, Slovak Republic’s visitor exports climbed 18 Austria 24.3 to €2.4bn, 3.0 percent of total exports; and in- European Union Average 23.8 vestments in tourism reached €0.7bn, 4.0 per- World Average 21.5 cent of that year’s national investment.5 25 Greece 16.2 Despite the relatively low WTTC figures, it is 50 Croatia 6.0 encouraging that the number and length of stay 52 Czech Republic 5.6 of domestic tourists in Slovak Republic is rising. 62 Hungary 3.3 In 2015, the destination for 68 percent of the hol- 66 Romania 3.0 idays of Slovaks, both long- and short-term was 72 Slovak Republic 2.5 Slovak Republic; just 32 percent went abroad. On 85 Bulgaria 1.8 average, Slovaks spent 8 nights on longer-stay domestic trips and 2 nights on shorter stays. 102 Albania 1.1 Holiday trips abroad lasted on average 7.5 nights. Source: WTTC 2017 Tourism & Travel Country Profiles For longer-term domestic trips, the purpose of travel was reportedly recreation and leisure (62%), visiting relatives (24%), and other activities (14%). On shorter domestic trips, 50 percent of Slovaks visited relatives and friends, 32 percent engaged in recreational activities and sports, and 7.8 percent enjoyed leisure activities such as wellness, agro-tourism (3%) and cultural events (2%)6. To the disappointment of local businesses, domestic tourists tend to keep costs down by engaging in lower-cost sport and recreation activities, and 60 percent stay with relatives or friends. This sug- gests a reluctance to spend on tourism within-country tourism. On holidays abroad, respondents reported average spending of nearly four times more than on domestic trips. Those who did not travel at all, domestically or internationally, cited lack of financial resources as the main reason7. TABLE 2  National Tourism: Average Amount TABLE 3  Destination Preferences of Domestic Tourists, Spent per Trip (Euros) 2015, Residents of Selected Districts in Slovak Republic 2015 Domestic tourism Abroad Number Number Average Number Destination of Trips of Nights of Nights Short-term trips 93 207 Poprad (PSK) 770,418 3,081,001 4.0 Long-term trips 226 655 Liptovský Mikuláš 313,178 1,319,788 4.2 Business trips 126 556 Bratislava I-V 403,887 1,061,211 2.6 Source: Slovak Ministry of Transport, Construction and Regional Trenčín 144,827 782,544 5.4 Development 2015, (current Ministry of Transport and Construction). Žilina 215,576 647,165 3.0 Other 2,888,965 11,419,952 N/A Source: Slovak Ministry of Transport, Construction and Regional Development 2015, (current Ministry of Transport and Construction). 16 Analysis of Destination Management System in the Prešov Region of Slovak Republic TRAVEL AND TOURISM TRENDS IN THE PREŠOV REGION PSK is at the Slovak Republicn border in the northeast. Its location facilitates active transborder economic relations with neighbouring Poland and Ukraine. PSK has 665 municipalities, of which 23 are classified as towns or cities. Almost 50 percent of the region’s inhabitants live in urban areas, the largest of which is the regional capital, Prešov, which with a population of 91,767 is the third largest city in Slovak Republic. According to the Slovak Ministry of Transport and Construction, its mobile operators have com- piled statistics on the movement of foreign visitors in Slovak Republic who have stayed at least two days. Based on foreign-issued SIM cards used in the area for at least 48 hours, analysis by dis- trict found that in 2016 PSK had 4,333,063 foreign visitors. Most came from nearboring Poland, the Czech Republic, Germany, Romania, Ukraine, and Austria. Other sources of national tour- ism statistics similarly report that neighboring countries are the main source of visitors to Slovak Republic. However, it was not clear how many were actually tourists rather than other types of trav- eler — a question particularly relevant for a region bordering the Schengen area. In other words, some may have been traveling across Prešov simply to reach Poland or Ukraine. As for tourists, the TABLE 4  Foreign Visitors to PSK and Snina District Staying majority are likely to be heading for the Poprad a Minimum of 2 Days district in North-Western part of PSK, which Tourist Home Number of Tourists Number of Tourists is home to the High and Low Tatra Mountains Country in PSK in Snina % and popular ski resorts. Poland 1,882,084 23,596 1.25 Czech Rep. 797,101 22,347 2.80 Snina district alone attracted 85,915 tourists in Austria 116,265 4 ,620 4.00 2016, about 2 percent of the total number arriv- Ukraine 134,548 4,156 3.10 ing in PSK. Most came from Poland, the Czech Republic, Austria, Ukraine, and the Netherlands Germany 190,254 3,246 1.70 (Table 4). From the given statistics, however, dif- Romania 167,301 1,076 0.60 ferent categories of tourists are difficult to dis- Netherlands 89,206 1,310 2.20 tinguish, which raises the question about actual Russian Fed. 88,317 1,919 1.40 demand for tourism in the region. Source: Slovak Ministry of Transport and Construction, mobile operator statistics, 2016. Unique cultural and natural heritage PSK’s location and tourism attractions are unique not only in Slovak Republic but also in Europe. Its historical and cultural heritage comprises 4,059 registered cultural monuments, of which more than 3,500 have national status. Among them are castles, chateaus, archaeological sites, town con- servation reserves, military monuments, Jewish heritage cemeteries, 27 unique wooden churches (cerkvi), 4 open-air folk museums, and technical monuments. All are tied to Slovak Republic’s rich cultural heritage of traditions, customs, and pilgrimages. The powerful influence of both Western and Eastern cultures also affected the formation of religious denominations, especially Christian and Jewish, in the area, which spurred the foundation of numer- ous religious sites with international significance, including many listed in UNESCO’s Heritage of Religious Interest. Among them are Bardejov’s historical town center, Spišský castle and its sur- roundings, St. James’ parish church, Master Paul’s church altar in Levoča, the Carpathian wooden churches, and religious pilgrimage routes that have contributed to the growth of faith tourism in the region. PSK’s mix of lowland and mountain regions also boasts a rich historical heritage of both lowland and mountain cultures and a diversity of local folklore (PSK Regional Strategy for Economic and Social Development 2014 – 20). In addition to its cultural heritage, PSK has considerable natural riches: five national parks,8 180 pro- tected areas, pristine nature reserves, and numerous geothermal springs that attract substantial numbers of domestic and international tourists annually. The Poloniny mountains and Vihorlatský Tourism Macrotrends in Slovak Republic and Presov Region 17 Primeval Forest in the Vihorlatské Peak Mountains are in the oldest trilateral nature reserve in the world; it covers 165,000 hectares spread across Slovak Republic, Poland, and Ukraine. Also highly prized are Natura 2000 sites such as Bukovské vrchy, Čergov, Laborecká vrchovina, Nízke Tatry, Slanské vrchy, Tatry, Vihorlatské vrchy, and the UNESCO-protected Primeval Beech Forests of the Carpathians in Stužica, Rožok, and Havešová in Bukovské vrchy. Rich sources of healing spring water add to the uniqueness of the region and its tourism potential; well-developed spa towns and resorts like Bardejov and Vyšné Ružbachy already attract steady flows of visitors annually. Missing links in PSK’s tourism development Cultural and natural assets alone, however, are not sufficient to sustain a high-functioning tour- ism economy. Supporting infrastructure is also essential. PSK’s tourism infrastructure and eco- nomic indicators vary substantially by district. Insufficient accommodation is the first major shortcoming. Year-round tourism infrastructure is most advanced in the Poprad district in north-western PSK, home to the High and Low Tatra Mountains, where there are many popular ski resorts, hiking destinations,and highly developed and diversified activities. However, as one travels east-ward in PSK, accommodation capacity and sales indicators slip significantly, with infrastructure poorest in the north-eastern Medzilaborce and Snina districts. TABLE 5  Accommodation Statistics in 2017 Number of rooms 10,969 Average price per night. €23 Number of visitors Number of foreign visitors 894,173 276,666 accommodated overall accommodated Source: https://www.mindop.sk/ministerstvo-1/cestovny-ruch-7 TABLE 6  PSK Accommodation Revenues in 2017 Accommodation revenues Average Accommodataion € 62,907,386 € 70.35 from domestic visitors Revenues per domestic visitor Accommodation revenues Average receipt €23,344,474 € 84.38 from foreign visitors per foreign visitor Source: https://www.mindop.sk/ministerstvo-1/cestovny-ruch-7 FIGURE 1  Origins of Foreign Visitors in PSK 23,596 22,347 3,246 1,076 4,156 4,620 1,310 1,919 Percent Poland Czech Republic Germany Romania Ukraine Austria Russian Federation Netherlands Snina district Prešov region Source: Ministry of Transport and Construction mobile operators’ data 2016 Hotel acommodations are standard and credible indicators used for detecting tourism demand. Statistics about ”parahotel” accommodations, such as bed and breakfasts, agri-tourism, privately rented facilities and information about one-day visitors who do not stay overnight would provide a more comprehensive understanding of the sector. However, these statistics are not collected systematically in Slovak Republic. 18 Analysis of Destination Management System in the Prešov Region of Slovak Republic Cooperation and coordination among stakeholders According to the PSK Marketing Strategy 2014 – 20, the region offers several types of ‘targeted’ tour- ism routes, as summarized in Table 7. TABLE 7  Customer Targeted Tourism Routes in PSK For schools For schools For secondary For specific For general public‚ TOP within PSK outside PSK choice tourists tourists tourist attractions in districts Thematic Thematic routes targeting Geographically linked, with Visitors’ niche preferen- By administrative units routes relevant time-frame specific starting points ces (romantic, explorer...) (13 districts) Source: PSK Marketing Strategy, pp. 108 – 120. These routes offer basic types of tourism: recreational, cultural, creative, and multidenominational faith-focused; spa and wellness; military-inspired; sports and cycling; hunting and rural. More specialized categories, such as adrenaline sports, culinary experiences, bird and animal watch- ing, astro-tourism, vacations in search of family or other social ties, and nostalgia tourism are also available. However, although the region is optimal for eco- and agrotourism, they are inade- quately covered by tourism offers and should be significantly enhanced. While effective packaging of tourism services can be seen in the Poprad district where High Tatras are located, in the eastern districts of the PSK, such practices are inchoate. A shortage of tourism infrastructure is partly the reason but so is the lack of inter-connectivity and cooperation between local tourism stakeholders and service providers. Infrastructure inadequacy and the remoteness of Snina district and the Poloniny National Park currently limit the district to low-intensity tour- ism. It is nonetheless conceivable that interconnected spatial and thematic products, purposefully and logistically linked with other PSK subregions and attractive destinations for tourists, could be a good platform for tourism development in the district as demand emerges. REGIONAL DESTINATION MANAGEMENT IN SLOVAK REPUBLIC Legislative basis In Slovak Republic the Tourism Support Act 20109 regulates national and regional destination management and marketing systems and their subregional DMOs and TICs. Where tourism devel- opment is concerned the Act also stipulates that regional administrations can: • Establish a regional organization and participate in its financing. • Cooperate with the regional organization on tourism programs and plans for economic, social, and cultural development; an annual plan of activities; and monitoring the progress of tourism in the region. • Create conditions for cooperation with business entities operating in its territory. • Create conditions for public awareness, building on entrepreneurship in tourism. • Cooperate with national authorities in implementing Slovak Republic’s national tourism policy. • Support cross-border, interregional, and transnational cooperation in tourism. • Create conditions for supporting mechanisms and tools that motivate residents in the terri- tory to develop tourism and improve service quality and competitiveness. • Cooperate with the Council of the Government of the Slovak Republic for a unified presentation of Slovak Republic abroad and participate in creation of a mechanism for such unified presentation. DMOs The Ministry of Transport and Construction reports that 43 DMOs are operating in Slovak Republic. Six are regional (RDMOS; Krajské Organizácie Cestovného Ruchu (KOCR) and 37 are subregional DMOs (Oblastné Organizácie Cestovného Ruchu (OOCR).10 Tourism Macrotrends in Slovak Republic and Presov Region 19 FIGURE 2  DMO Membership Structure The Tourism Support Act 2010 regulates the in Slovak Republic establishment, functions, and membership of national and regional DMOs and specifies that subregional DMOs are responsible for drafting Sub-regional strategic and conceptual documents, annual DMO 1 planning and projects for tourism development, and cooperation with municipal authorities and associated members. They are also tasked to Sub-regional (1) develop tourism products, stimulate and sup- Regional DMO (KOCR) DMO 2 port sustainable development of regional and Minimum of 5 subregional social, cultural, and sports life and Municipalities protect the cultural heritage; and (2) conduct Other members: businesses, non-profits, periodic regional market analyses, provide advi- professional associations, sory services to members, and register TICs. The educational institutions Sub-regional act allows regional but not subregional DMOs to DMO 3 do marketing abroad as well as within Slovak Republic. Regional DMOs are also responsible for overseeing the TICs within their area. Sub-regional DMO ...n Membership and structure Source: Created as per the Tourism Promotion Act 2010, Law No. 91/2010. The law grants both regional and subregional DMOs discretion as to which municipalities can join or form a DMO, irrespective of their cadastral administrative boundaries. The rationale is to con- nect municipalities with tourist attractions and with available accommodation. DMO members may also be business entities, scientific and educational institutions, nonprofit organizations, and oth- ers who enter into formal partnerships to cooperate with municipalities on tourism development. Moreover, the Tourism Promotion Support Act 2010 implies that TIC membership should also fea- ture in the DMO portfolio. In reality, however, this model is applied by only two subregional DMOs, in Bratislava and Košice. In PSK, TICs function independently and are not integrated within the DMO portfolio, and only two subregional DMOs contribute to TIC financing, those in Región Vysoké, and Tatry and Tatry — Spiš-Pieniny District. Due to the fragmentation of TICs (see section 3.3), consoli- dating them into a comprehensive regional DMO is part of this report’s recommended restructuring. Financial management of regional and s ubregional DMOs By law DMOs can receive and generate funding from • Membership fees • State grants and contributions • Discretionary and voluntary contributions from municipal and regional budgets and phys- ical and legal persons • Revenues generated from their own activities, product sales, and services • Honoraria for intermediary services • Revenues generated from TICs • Revenues generated from sale of advertising space • Nonrefundable funds from domestic and international sources, e.g. the EU • Other revenues. State financial contributions or provision of subsidies are based on specific criteria, such as the actual number of overnight stays — here local taxes on accommodation are the main indicator. Receiving membership fees from at least five municipalities is also a criterion for qualifying for state aid. In 2011, however, the Tourism Support Act 2010 was amended to reduce state responsi- bility for subsidizing tourism by making it discretionary rather than obligatory. In 2018 another amendment, 347/2018 Z.z §14, effective January 2019, increased the number of overnight stays required for DMOs to qualify for discretionary state subsidies. 20 Analysis of Destination Management System in the Prešov Region of Slovak Republic By international standards, Slovak Republic has a high number of DMOs. The above mentioned amendments to the national law reduce public funding to smaller DMOs that do not achieve the overnight stay targets11 — a rationalization principle that the WBG team supports. Tourist Information Centers (TICs) Tourist Information Centers (TICs) can be established by a municipality, a tourism organization, or by another entity. TICs are considered as special-purpose facilities which, within a given region, area or municipality ensure: i) the gathering, processing and provision of tourism related information; and ii) continuous dissemination of information to domestic and foreign visitors by updating tour- ism information content and mapping regional attractions, tourism products and events. (Act No. 91/2010 Coll. §24). Subsequently, the Slovak Association of Tourism Information Centers (AICES) defines a TIC as: … [a] dedicated facility that collects, processes, and provides information on tourism in per- son, by telephone, in writing, electronically, and through social networks. It is a provider of continuous information and services for domestic and foreign visitors with a mission to map attractions, tourism products, and events, and create comprehensive and up-to- date tourism offers in a given destination. TICs serve as local focal points mandated to assist domestic and foreign tourists to obtain useful information about tourism destinations.12 For a given location, the TIC thus provides basic information, marketing, and services related to tour- ism. For local service providers, TICs can act as intermediaries promoting local services and prod- ucts. As TICs tend to be the first points of institutional contact for tourists, often serving as tourist ‘attractions’ themselves, they also shape tourist first impressions and the public image of a given destination (Perdue 1995) and can be influential in motivating visitors to return. It is unusual for local governments to have such tourism responsibilities, and TICs in Slovak Republic absorb a considerable share of local government budgets. Some clearly help attract visitors, but for others that role is not clear. As for DMOs, there is currently a debate about how to rational- ize public funding for TICs as is being done for DMOs. The WBG team encourages Slovak Republic to rationalize the network of TICs (see Table 8 for the current structure) and base public funding on their identified impact. TABLE 8  Function, Location, and Groups Targeted by TICs Tourist Information Visitors Information Welcome Information Municipal / Cultural Centers Centers Centers Information Centers IC (TICs) (VICs) (WICs) (MICs) Offers basic information Offers basic information Provides information Provides information on about national tourism, about national tourism, Function about a specific city, local events, and the detailed information about detailed information about destination region tourism in a region border regions Regional capital or general Location Attraction site Border crossing points City Center destination Tourists, partners, Local residents, tourists, Target Tourists, partners, local public bodies, investors, Foreign visitors partners, public bodies, Group residents local residents investors Source: Fraňová at al. 2017. Tourism Macrotrends in Slovak Republic and Presov Region 21 MANAGEMENT AND PERFORMANCE OF TICS AND DMOS PERFORMANCE PRINCIPLES OF DESTINATION MANAGEMENT The UNWTO (2007) defines a local tourism destination as a physical space in which a tourist spends at least one overnight stay. It includes such tourism products as support services, attractions, and tourist resources. Its physical and administrative boundaries define its management and public perceptions, which further shape its market competitiveness. Local destinations have a diversity of stakeholders, often with both a host community and a network of nearby destinations. Professional and networked destination management For effective tourist experiences, dedicated public organizations are needed to enhance those expe- riences and help small or medium-sized enterprises (SMEs) to promote and disseminate their tour- ism products in a given location (Butler 2017). In this sense, an effectively managed DMS, typically coordinated by a Regional Tourism Organization can be catalytic for regional tourism develop- ment, and local economic growth. An advanced DMS effectively identifies, tailors, diversifies, and targets add-on services to meet identified demands, stimulates public-private partnerships (PPPs), and connects local tourism stakeholders. It can also detect emerging trends, devise innovations to boost the competitiveness or sustainability of a destination (Ritchie and Crouch 2003), and in its territory act as a multipier in equitable distribution of the benefits from local tourism. A less effective DMS simply stores and disseminates information on tourism suppliers, visitor attractions, and other activities in its area without adding much value to the tourism ecosystem. DMOs and TICs While TICs act as a first point of contact and provide localized basic information for tourists, DMOs add strategic organizational and promotional activities to destination management systems. DMOs facilitate and reflect strategically on a given destination and can thus not only guide tourism policy and planning but also advocate the cause of tourism in its area to national tourism authorities. DMO strategies can and should encompass the full social and economic dimensions of tourism demand, collecting data on the volume of international and domestic visitors, purpose and characteristics of their visits, consumption of goods and services and their supply — mapping local tourism-related businesses with details on their production, employment, and optimization of capital. DMOs can also develop products, thematic packages of products, and marketing strategies to promote a given destination in its entirety. DMOs can do much to build and promote regional ‘brands.’ To be effec- tive, a DMO should thus cover an area large enough to be attractive as a destination. While physical presence and face-to-face interaction are important features of TICs, today tour- ism destination management information systems (TDMIS) are vital for DMOs and the regional or national DMS. TDMIS are introducing innovative ways for DMOs and tourism suppliers to com- municate not only with clients but increasingly with each other on policy formulation, strategic planning, day-to-day decision making, and continuous monitoring of destination performance. Active uses of TDMIS can enhance the competitiveness of DMOs by increasing their visibility, reduc- ing their costs, and enhancing their cooperation. Destination e-marketing when optimized, has positive tourism impacts and helps all stakeholders to achieve their strategic goals (Buhalis 2000). 24 Analysis of Destination Management System in the Prešov Region of Slovak Republic An enabling environment for tourism and destination management In addition to effective organizations, an environment that makes it possible to build tourism is essential. New destination management trends demonstrate the following essential ingredi- ents for an enabling ecosystem: • Recognition of tourism as a field of industry by national authorities • Acceptance of tourism as an integral part of the socioeconomic development of an admin- istrative unit, such as a region or municipality • Use of PPPs to promote tourism and enhance cooperation, networking, and diversifying funding sources • Staff engaged in continuous professional development and training • Staff motivated to satisfy the needs of visitors, customers, and consumers to stimu- late demand. MANAGEMENT AND PERFORMANCE OF TICS IN PSK In PSK, the 34 TICs registered are widely dispersed throughout the region (Figure 3). These can be divided into 5 categories (Table 9). FIGURE 3  TICs in the Prešov Region TABLE 9  TIC Structure and Activities of TICs in Prešov Region As a Percent of Type Location of TIC TICs Surveyed Bardejov City, Levoča, Poprad, Starý Smokovec, 1. Highly professional staff, Tatranská Lomnica, Štrbské Pleso, Prešov, Svidník, 35 space, and performance Ladomirová Bardejov Spa, Humenné, Spišská Belá, Kežmarok, 2. Higher number of Levoča, Medzilaborce, Poprad, Prešov, Veľký Šariš, personnel but financial Sninské rybníky, Poloniny Zboj, Poloniny Topoľa, 65 dependence on town or Poloniny, Nova Sedlica, Zemplínske Hámre, Stará village Ľubovňa, Stropkov Management and Performance of TICs and DMOs 25 As a Percent of Type Location of TIC TICs Surveyed 3. TICs function with another Vranov nad Topľou, Bardejov Spa, Snina 11.5 business activity 4. In National Park PIENAP, Spišská Stará Ves 4 (Ministry of Environment SR) 5. Small, very low quality TICs Podolínec (library), Medzilaborce, Veľký Šariš 19 with minimum functionality (library), Poloniny — Zboj, Poloniny — Topoľa, Osadne‘ Source: WB Survey Results 2018. One conclusion that can be drawn from Table 9 is the high degree of dispersion in TIC location, structure, and performance; note that just over a third are ‘good performers.’ These are mostly in urban destinations with a high volume of visitors such as the High and Low Tatras or in towns and high-profile attractions like the reputable spa FIGURE 4  TIC Structural and Operational Status (n=26) and wellness town of Bardejov and the UNESCO Levoča site, which is attracts historical heritage 8% and Christian pilgrims. Due to the high tourism profile of their locations, these TICs tend to enjoy TIC is the operator’s good infrastructure, accessibility, well-equipped 19% only activity premises, and more professional staff, which TIC is the operator’s main or dominating activity means they can attract diverse forms of invest- TIC is one of the operator’s ment capital, both public and private. several activities 73% Nearly two-thirds of the TICs (65%) in PSK are highly dependent on municipal funding, and just over 11 per cent share their space and operational Source: WB Survey Results 2018. costs with other business activities to make ends meet — hence not being fully dedicated to tour- ism development. Only 19 percent claimed to be entirely focused on tourism related activities. Very small TICs perform only minimum tourism related functions; some in fact operate as ‘self-service’ facilities and have no staff. Several of these are in the Poloniny Region, in remote, rural areas where investment opportunities are much fewer, infrastructure is poor, thus tourism is less developed. FIGURE 5  Types of Fee-based TIC Services (n=26) Sale of souvenirs 85% Sale of maps 69% Sale of books related to travel 61% Sale of own products 38% Guide services in Slovak 38% Advertising services for customers 31% Selling stamps 31% Sale of brochures 31% Sell tickets to events 27% Guide services in foreign language 27% Sale of insurance services 23% Sale of electronic media on tourism 19% Printing info for customers 19% Conducting courses for local guides 4% Printing transport information package 4% Translation & interpretation services 4% Conducting tour-guide courses (certificate) 0% Percent Source: WB Survey Results 2018. 26 Analysis of Destination Management System in the Prešov Region of Slovak Republic The diversity of TIC internal structures and operational focus in PSK explains variations in the scope and quality of services offered. For most, the scope of services is quite limited. In general, the WBG team found few specialized thematic services. While not all countries have adopted spe- cialized services and DMOs,13 thematic services that focus solely on, e.g., agrotourism, winter sports, adventure travel, faith tourism are a growing trend globally. Some 77 percent of TICs report that the majority of their services (averaging 60%), are provided free of charge to their clients. Moreover (see Figure 5), most of their revenue-generating services are sales of souvenirs, maps, and books rather than more complex value-adding, experience-based services such as attraction and accommodation packages, specialized interest tours, or tours cen- tered on cultural events. Thus many are simply subsidized merchandise points, rather than pro- viding services that could attract more visitors for longer stays. The most common free services are face-to-face consultations about attractions, transportation options, and tourist guide ser- vices or responses to tourist requests. Other free services offered are brochures and posters pro- moting popular attractions and events. TIC Financial Management Like organizational structures and services offered, the financial management structure of TICs is also fragmented. Most TICs depend on a variety of sources for financial suport and revenue. TICs in high-profile destinations like Bardejov City, Starý Smokovec, Tatranská Lomnica, Štrbské Pleso and Svidník are often privately funded, but municipalities finance the great majority. One exception is the TIC in Spišská Stará Ves, which is funded directly by the Ministry of Environment; another is the TIC in Nová Sedlica, which is part of Správa NP Poloniny (ŠOP SR Banská Bystrica). While managing the mosaic of financial resource streams is not difficult for well-staffed and pri- vately managed urban TICs, municipality-financed ed TICs suffer more volatility and have less incentive to promote, cooperate, and coordinate tourism inter-municipally or in the larger region, since few municipalities to finance such activities. As an analogy, consider a country where each municipality defends itself with its own army, financing all related expenses, rather than delegat- ing defense to a higher level of government. TIC Human Resources Management FIGURE 6  Full-Time Staff Employed in TICs (n=26) Staff allocations and management is subopti- mal from several points of view. About 23 per- 31% 23% 23% Percent cent of TICs are self-service facilities with no staff another 54% have only one or two employees. 8% 4% 4% 4% 4% Only in the High Tatras (Tatranská Lomnica, Starý Smokovec, Štrbské Pleso) where seasonal tourist flows can reach 600 – 800 visitors a day Number of Full-time Employees employ five or more staff. Source: World Bank Survey Results 2018 Use of ICT Although 50 percent of TICs have search engines open to the public, 27 percent have no information systems and less than 25 percent have their own software and databases. A full 40 percent offer no IT-enabled services, another 30 percent offer self-service touch screen kiosks, and WiFi con- nections are available in 42 percent. Given the importance of public and client outreach, height- ened use of ICT systems is highly recommended so that TICs can optimize internal management processes, but more importantly for marketing and for communicating with the greater public. The WBG study has made it clear that TICs in PSK suffer from extensive structural fragmentation and diffuse, unsystematic financing models that undermine their service to both tourists and the region. While larger and better-funded urban-based TICs14 show promise and growing adoption Management and Performance of TICs and DMOs 27 FIGURE 7  Use of ICTs by TICs for internal communication of good practices, the great majority battle with survival and have mixed and fragmented busi- ness models. The result is that they have less 27% 23% TIC has own database system time to innovate, collaborate with others out- side their boundaries on attractive value-adding TIC works with generally available database systems services, or even promote their own locations. (Google, Tripadvisor, etc.) In the regional context, then, it makes sense TIC does not have own database to streamline or repurpose these TICs for other system and does not use any other data options community activities and pool their allocated 50% fundsing could be pooled for more value-adding tourism initiatives. Continuing to support them Source: Current Survey Results 2018 is a waste of public resources. MANAGEMENT AND PERFORMANCE OF DMOS IN PSK Currently, the Prešov Self-Governing Region has 1 regional DMO, 7 subregional DMOs and 34 TICs (Figure 8). When looking at how their performance correlates with the socioeconomic level in their districts, the WBG team found that their performance varied substantially — t he less wealthier the district, the less well they performed. Observed disparities in performance quality also var- ied in relation to (1) how effective the management was; (2) their access to optimization of funds; (3) the type and range of services offered, (4) their use of ICT for communication and marketing; and (5) staff professionalism and optimization. FIGURE 8  Subregional DMOs in Prešov Region Source: Regional DMO North-East Slovakia. The structural framework and performance of DMOs in the region are as fragmented as the TICs. Since Slovak law does not geographically delimit areas to be covered by DMOs, PSK has eight — the highest number in the country except for Žilina Region (Figure 8). Several subregional DMOs are not geographically continguous (see distances between areas of the same colors in Figure 8). Subregional DMOs in PSK also differ significantly in the composition of their membership. In all subregional DMOs, the highest number of members are municipalities, followed by private sector companies. Interestingly, NGOs and professional associations are in the minority. However, a large membership base does not always yield a strong market presence, which suggests a demand-supply gap. Two DMOs, Región Vysoké Tatry and Šariš – Bardejov, the latter in a reknown spa and wellness town, have low membership but are leaders in regional tourism. They are also among the most visited tourist destinations with a high number of accommodation sales. 28 Analysis of Destination Management System in the Prešov Region of Slovak Republic TABLE 10  Membership Structure of Individual DMOs in PSK Type of Members Total Member Private Nonprofit Name and Location Organizations Municipalities Companies Organizations Other Regional — High Tatras (Starý Smokovec) 6 3 2 1 0 High Tatras — Podhorie, Tatranská Lomnica 13 9 3 1 0 Tatry-Spiš-Pieniny (Kežmarok) 27 13 12 2 0 Severný Spiš — Pieniny (Stará Ľubovňa) 15 8 6 0 1 Región Šariš (Prešov) 9 5 4 0 0 Šariš — Bardejov (Bardejov) 5 2 2 0 1 Horný Zemplín a Horný Šariš (Vranov nad Topľou) 14 8 6 0 0 Total 89 48 35 4 2 Source: WBG Survey Results 2018 New legislative incentives for consolidation Structurally, subregional DMOs are highly fragmented, and financial asymmetries in, e.g., capital investment affect their operations. For instance, in 2017 the High Tatras region received a state subsidy of €978,000; subsidies to other regional DMOs ranged from €18,750 to €51,480, averaging €37,881. In other words, the total for all the other DMOs was just over one fifth (23%) of what the High Tatras received. Meanwhile, PSK’s single regional DMO was substantially underfunded, even though it is the only one with a solid geographical base for marketing the entire region as a des- tination and for ensuring equitable development of tourism. As noted, state subsidies to DMOs are based on recorded overnight stays. The 2018 legislative pol- icy change to raise minimum overnight stays effective January 2019 aims to incentivize consol- idation of DMOs so that they can become high performers, but whethere it is effective will take time to revaluate. The impact of asymmetries in financing affects the activities DMOs pursue (Table 11). While all PSK subregional DMOs submitted requests for marketing and promotional activities, five also sought support for product and infrastructure development and two for building new attractions. Not one DMO requested funds for quality systems and training, and only the High Tatras DMO incor- porated strategic plans into its budgets. TABLE 11  Budgeted Activity Lines of Subregional DMOs in PSK DMO DMO DMO DMO DMO High DMO Tatry, Northern Spiš, Horny Zemplin Šariš DMO Budget Line Tatras Podhorie Spiš Pieniny Pieniny Horny Šariš Bardejov Šariš Marketing and promotion x x x x x x x Operational costs of TIC x x Tourism product development x x x x x Supporting attractions x x Development of tourism x x x x x infrastucture Strategies and analyses x Quality system Training and professional development Source: WBG Survey Results 2018. Management and Performance of TICs and DMOs 29 Innovation and good practices Offering attractive and well-tailored tourism products is among the top functions of DMOs. While interconnectivity and innovation can be continually improved, several currect and past initiatives demonstrate that the regional DMO actively promotes innovative approaches to destination man- agement in PSK. Here are some examples of good practices: Advances in Electronic Marketing: Recognizing that eMarketing is essential in today’s tourism market, the regional and some subregional DMOs, co-funded a series of electronic marketing brand devel- opment activities. among them social networking campaigns, PR articles, improvement of regional website services, and mobile applications. Bundling products and services: The TATRY Card is a promotional project supporting tourism in the High Tatras by offering year-round discounts on water park, cableway, and museum fees and charges at sports shops and restaurants. The card also promotes ecological service provid- ers and local registered accommodation estab- lishments, which helps to both disqualify infor- mal or unregistered accommodation providers (‘black hosts’). As of 2019, TATRY Cards are availa- ble in a mobile phone QRL format. The card pri- marily targets families with children, who con- stitute 70 percent of local tourists; it is issued for 4 days and costs €4.15 Motivational, Interactive, and Thematic Cam- paigns:16 The regional DMO also sponsors inter- active annual thematic competitions: 1) Go and Snap (a picture) invites anyone to sub- Choď a foť 2018 mit a photo of a favorite PSK holiday destina- tion; winners are selected competitively and their shots become part of an exhibit that travels to towns within the region. 2) The Best in Tourism Awards, Top Tourism Product Campaign: The head of the region- al DSO says this award “recognizes people who are involved in building a positive image of north- east Slovakia … in the culture, gastronomy, and hotel industry, whose quality can be an inspira- tion for others.” 3) ‘Travel Diary’ from a Cultural Heritage Region is open to school-age children who are invit- ed to submit a travel diary story or a draw- ing from their favorite cultural site, or both. For all initiatives, prizes include local accommo- dations and tickets to cultural events or regional attractions. Gamifying Tourism in the Region: Another innova- tion was creation of an interactive didactic mo- bile game/app, Legendarium Go! that personifies 30 Analysis of Destination Management System in the Prešov Region of Slovak Republic 15 characters from Slovak historical legends who go on adventures in 84 real PSK real destinations, where the characters describe a location linked to a specific legend. As owners of the app trav- el to the designated places they collect points, for which they can receive 50 percent discounts for tourist attractions. This project received an award from the Ministry of Transport. All these initiatives serve not only promotional, productized, and revenue-generating but also didactic purposes; they allow both adults and children to interactively engage with destina- tions. They also attest to the DMO’s efforts to pro- mote interactive tourism products. DMO financial management In 2018, the one regional DMO in PSK qualified for a state subsidy of €152,775, which was supple- mented by a regional government contribution of €210,000. It spent €120,370 for marketing, and €69,000 for infrastructure development. Among subregional DMOs, 54 percent have no state funding because they do not have enough over- night stays. Those that do qualify (e.g.. most of those in the High Tatras) submit annual propos- als for funding. Though the law does not guarantee DMO subsidies, in practice, timely submitted proposals typically are funded by the Ministry of Transport and Construction. The other subregional DMOs are mainly financed by member municipalities. In 2017, annual mem- bership fees paid to subregional DMOs totalled €937,115. Private member contributions can average up to 39 percent of a subregional DMO budget; among the seven in PSK, membership contribu- FIGURE 9  DMO Membership Structure tions range from €13,956 to €744,434. 39% In 2017, for marketing alone, the seven subre- gional DMOs spent a total of €1.109 million; only Municipality two gave financial support to TICs, the amounts 5% Business totaling €76,357 (Table 12). For infrastructure, 2% Non-profit most DMOs plan and solicit their own separate funding; in 2017, this totaled €756,130. Although Others these amounts may seem substantial, the fact that DMOs are so fragmented makes it difficult 54% for the amounts to have optimal impact on re- gional tourism development. Source: WBG Survey Results 2018 TABLE 12  Subregional DMOs’ Budgets and Sources of Income Source of DMO DMO DMO DMO DMO Contributions North-East Severný Región Tatry-Spiš- Horný Zemplín DMO DMO in 2018 Region Spiš Pieniny Vysoké Tatry Pieniny a Horný Šariš Šariš — Bardejov Šariš Annual budget (€) 491,070 144,001 2,075,187 96,680 53,871 69,700 66,813 Local government (%) 42.0 21.18 35.8 14.4 59.3 28.0 48.8 State subsidy (%) 31.0 35.7 41.23 59.1 40.7 59.5 51.1 ∑ TIC — s costs ( %) 58.8 1.05 3.69 0 0 0 5.1 Source: WBG Survey Results 2018. Management and Performance of TICs and DMOs 31 Consolidating subregional DMOs A cost-benefit analysis makes it clear that, taking into account financial resources and perfor- mance considerations, the current DMO structural model in the Prešov region is far from optimal. Significant variations and subregional asymmetries undermine the effectiveness of destination management in PSK. Successful promotion of a destination to meet tourism development bench- marks requires efficient cooperation, coordination, and strong, competitive, demand-driven DMOs. Under the new Slovak law, with some well-functioning exceptions already discussed, today’s sub- regional DMOs would not qualify as competitive; and even in the exceptions, here is room for struc- tural and substantive improvement. The dispersed and unreliable funding of those that do not qualify makes them operationally volatile because they must be concerned more with surviving than actively promoting their destinations. While a certain level of state support, strong man- agement, and lucrative and attractive tourism options are essential, to qualify for state subsidies, DMOs still need a sufficient number of overnight stays. Consolidation To move forward strategically, the WBG team recommends streamlining and consolidating frag- mented TICs and subregional DMOs into a single, well-funded, well-staffed regional DMO. Its role would be to plan, develop services, collaborate with local partners, and promote the region as a whole. This would create effective economies of scale, put the region on the tourism map, and help trans- form tourism into an equitable engine of growth. FIGURE 10  Current Financial and Data Flows to TICs and DMOs Variant Variant MUNCIPALITY PRIVATE OTHER REGIONAL Variant PRIVATE MUNCIPALITY L-GOV BUSINESS STAKE ADMINISTRATION MINISTRY BUSINESS L-GOV 1–n L-GOV 1 – n HOLDERS R-GOV SUB — DMO STATE MINISTRY R — DMO TIC 1 – n OF TRANSPORT OOCR 1 – n KOCR & CONSTRUCTION Direct financial flows Direct tourist data flows Source: World Bank, based on existing legislatve framework. Current laws set out the criteria for the functions and performance of regional DMOs. A consoli- dated regional DMO would more easily cross the new threshold for state suport. 32 Analysis of Destination Management System in the Prešov Region of Slovak Republic CONCLUSIONS AND RECOMMENDATIONS Some advances and innovative approaches in tourism development have been explored in the PSK. To transcend the growing foreign and national competition and to stimulate regional tourism for equitable growth, several strategic considerations could help optimize the use of resources to that end. Globally, tourism is emerging as a public good because it is a proven driver of economic growth and job creation. PSK is well positioned to derive economic benefits from sustainable tourism activities that would capitalize on its unique border location and rich natural, cultural, and his- torical heritage. Strong and inclusive local economic growth depends on an equally strong vision, management. and commitment to success. The region can certainly build on the many advances it has already made, but it must also commit to more equitable investment and to infrastructure development, if it is to promote attractive experience-based tourism. It must also consolidate its destination management and marketing system, and branding into a more coherent, competitive, and visible catalyst to tourism. For this, it must also work hard to mobilize resources and invest- ments, especially for EU-funded Operational Programmes which have not been fully explored. 1. Integrate and consolidate sub-regional DMOs and TICs into a single, competitive regional DMO. Tourism support in PSK is fragmented into 1 regional DMO, 7 subregional DMOs and 34 TICs. The WBG team recommends that these be consolidated into a single, well-resourced, and well-staffed regional DMO. This consolidation would incorporate publicly owned TICs and apply to direct and indirect subsidy of those that are privately owned. A single DMO would apply principles of eco- nomic, operational, and marketing efficiency. Integrated regional approaches to the manage- ment, marketing, and promotion of destinations is global good practice for optimizing resources and sustainability. Moreover, consolidation would better align PSK with the amendment to the Tourism Support Act 2010 that entered into force in January 2019, which incentivizes consolidation rather than fragmentation. 2. Address intra-regional investment asymmetries. Investment and strategic resources disproportionately benefit some subregions in the PSK, such as the High Tatras, more than others, especially Snina and most other districts in the East. While some investment asymmetries in tourism can be expected based on economies of scale, it is impor- tant that over time these do not crowd out investment in less-developed destinations. Entrenched asymmetries could also deepen infrastructure degradation and establish poverty traps in neglected areas. The WBG team therefore recommends that, rather than giving small grants for small pro- jects, national and PSK authorities revisit their investment portfolios and identify a more equitable way to distribute and attract investment oportunities to less-developed regions, especially those with tourism potential. This could be done based on a new investment algorithm with equali- zation weights or by systematic, sizable, and strategic budget allocations to less-developed areas that have tourism potential. 36 Analysis of Destination Management System in the Prešov Region of Slovak Republic 3. Scale up connectivity between tourism products and destinations within the region. Thematic and value-adding links between products and tourism destinations in different districts would be valuable. The current lack of connections between sub- regional DMOs incentivizes pro- motion of single locations rather than the PSK region as a whole, where it would be easy to identify many links. This gap could be bridged by creation of the single DMO proposed in Recommendation 1. It could launch a system of mutually reinforcing destinations, new thematic products, attrac- tive intra-regional packages, and easier tourist navigation of market options. Collaboration with local businesses, the public sector, and other potential partners would help legitimize the value of integrated tourism for different segments of the market. 4. Continue to support innovation, enhanced marketing, and expansion of-revenue generating tourism services. TIC and DMO revenue-generating activities in PSK are limited to basic sales of souvenirs, maps, books, and stamps; it is recommended that they expand into add-on services like tours, ticket sales, and special packages, which as yet contribute little. They should also assemble experiential and the- matically linked services. Here strategic partnerships and joint strategic planning would be bene- ficial, faciliated by the single regional DMO. A service-oriented approach would boost job creation, attract and satisfy tourists, yield more revenues, and thus help accelerate local economic growth. 5. Adopt evidence-based sectoral strategic planning based on systematic collection and use of statistical data. For a wide range of public and private entities, meaningful and systematic use of data is essential for careful targeting of policies and programs—and for subsequent knowledge gains. While Slovak national authorities publish a fair amount of useful data, there is little detailed data available on tourism, particularly disaggregated by region, subregion and district. It is thus recommended that PSK and the regional DMO collect a variety of meaningful data either in-house as a dedicated, sustained activity (ideally institutionalized as an annual budget line) or outsourced to a local uni- versity partner, so that policymakers have access to reliable statistics about real tourists. 6. Draw up a Regional Strategy on Tourism Development. To effectively orchestrate all these ides, the WBG team encourages region-wide strategic think- ing, planning, cooperative activities, and monitoring. This should be based as soon as possible on adoption by the PSK administration of a comprehensive strategy for regional tourism develop- ment. The lack of such a strategy may well explain the current fragmentation of resources and the related absence of coherent vision for tourism in PSK. Conclusions and Recommendations 37 ANNEX TICS AND DMOS SURVEYED AICES District Location Name member Visited Questionnaire City Center main square TIC √ √ √ Bardejov Bardejov — spa TIC √ √ Humenné Humenné — railway station TIC √ √ √ Spišská Belá — main square Regional Tourist Info Center √ City Center main square Kežmarská Info Agency √ √ Kežmarok Podolínec — centre, library City Info Center √ Spišská Stará Ves — main Information Center Pieniny √ √ street close to the bus station National Park Levoča City Center main square Information Office mesta Levoča √ √ √ Medzilaborce — open No name √ √ airmuseum Medzilaborce Osadné — orthodox church Information √ √ (self-service) Poprad — main square City Info Office √ √ √ Poprad — railway station TIC √ √ Bachledová near tourist Info Center Ski Bachledova √ √ attraction Starý Smokovec centre TIC √ √ √ Poprad Starý Smokovec Information Center √ √ Funicular cash desk Tatranská Lomnica, centre Tatry Info Office √ √ √ Tatranská Lomnica Cable way Information Center √ √ Štrbské Pleso TIC √ √ √ City Center main square City Info Center √ √ Veľký Šariš — library Prešov TIC Veľký Šariš √ √ by the castle Veľký Šariš — museum castle TIC √ Sabinov Sabinov — on the main street Cultural Info Center √ Snina — close to the main Tourist Info Office near CA √ √ √ road, in a shop UNTiTOUR Sninské rybníky — close TIC √ √ to the hotel (seasonal) Snina Poloniny –  Zboj wooden TIC √ √ bungalow (self-service) Poloniny Topoľa wooden Tourist Information Office √ √ bungalow (self-service) Poloniny — Zemplínske Hámre TIC √ √ Stará Ľubovňa Stará Ľubovňa — main square Informačné centrum √ √ City Center — near Municipal Stropkov TIC City of Stropkov √ √ √ Office Svidník — main Dukla Destination √ √ pedestrian zone Svidník Ladomirová — close Dukla Destination Infocentrum √ √ to the tourist attraction Ladomírová Vranov nad Topľou City Center main square City Info Center near CK PRIMA √ √ 38 Analysis of Destination Management System in the Prešov Region of Slovak Republic NOTES CURI – Prešov is part of the EC’s broader June 2015 initiative 1. SR na Slovensku v roku 2015.) http://www.mindop.sk/mini- to examine factors that hold back growth and investment sterstvo-1/cestovny-ruch-7/statistika/ubytovacia-statistika. in low-income and low-growth EU regions. Low-growth 7. Ibid. regions have GDP per capita of 90% or less of the EU average 8. National Parks: Tatra (TANAP), Low Tatras (NAPANT), Pie- and a persistent lack of growth; in low-income regions GDP niny (PIENAP), Poloniny (comprising Nová Sedlica, Príslop, per head is growing, but is still less than 50% of the EU ave- Runina, Ruský Potok, Topoľa, Zboj, Jalová, Uličské Krivé, rage. These regions are home to 83 million inhabitants, Ulič a Kolbasov municipalities), and Slovenský raj (Slovak i.e. 1 out of 6 EU residents. EC report published in April 2017 Paradise). detailed the investment needs, growth determinants, ma- 9. Law No. 91/2010 Z. z. cro-economic framework and need for structural reforms 10. Ministry of Transport and Construction (2018); in these regions (see MEMO 17/895). https://www.mindop.sk/ministerstvo-1/cestovny-ruch-7/ 2. See MEMO 15/4654: http://europa.eu/rapid/press-release_ register-organizacii-cestovneho-ruchu/register-krajskych- MEMO-15-4654_en.htm. -organizacii-cestovneho-ruchu; https://www.mindop.sk/ 3. The Association of Information Centers of Slovakia (AICES) ministerstvo-1/cestovny-ruch-7/register-organizacii-cesto- is a voluntary, nonpolitical, professional and interest vneho-ruchu/register-oblastnych-organizacii-cestovneho- association in the field of information and tourism. In 2015 -ruchu. it disseminated a comprehensive set of standards for TIC 11. https://www.slov-lex.sk/pravne-predpisy/SK/ performance that are listed on its website https://aices.sk/ ZZ/2010/91/20190101.html. wp-content/uploads/2018/10/technicky_standard_pre_cin- 12. https://aices.sk/. nost_tic.pdf. 13. Among those that have, Austria, France, Canadam 4. WTTC (2018), http://www.wttc.org/-/media/files/reports/ and Germany have become leaders. economic-impact-research/countries-2018/slovakia2018.pdf. 14. Bardejov, Kežmarok, Levoča, Poprad cities, Starý Smoko- 5. Ibid. vec, Tatranská Lomnica, Spišská Stará Ves, Štrbské Pleso, 6. Current Slovak Ministry of Transport and Construction; Prešov, Spišská Stará Ves, Svidník, Stropkov. in 2015, Ministry of Transport, Construction and Regional 15. https://www.severovychod.sk/clanok/tatry-card-karta- Development. Holiday and Business Trips of Slovak Citizens zazitkov. in Slovakia in 2015. (Dovolenkové a služobné cesty občanov 16. https://www.severovychod.sk/kampane. BIBLIOGRAPHY Association of Tourism Information Centers (AICES) https://aices.sk/ Holloway, J. C., and C. Humphreys. 2012. The Business of Tourism. Buhalis D. 2000. “Marketing the Competitive Destination of the London, UK: Pearson. Future.” Tourism and Management 21 (21): 97 – 116. Kotler, P. T., et al. 2017. 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