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Despite inflation and the war in Ukraine, the tourism sector is heading for a successful restart

We send the year 2022 - another year marked by wars, economic, political and social changes. Now, when the last 12 months are almost history, Investor.bg has collected the most significant events and trends from the political and economic life in Bulgaria and around the world over the last year in the special section " Economy in 2022".

Bulgarian tourism wishes a better and more successful year. After the pandemic collapses of the last two years, the year 2022 showed that the tourism industry in our country has the potential to recover rapidly. The sector has not yet returned to its full strength, overcoming the consequences of the pandemic, but the results achieved in the past year give optimism for upward development next year.

Overall, the overall picture for tourism appears optimistic, but the sector still has some catching up to do to reach its pre-pandemic achievements. After the initial shock of bans and restrictions, 2021 loosened the grip of the pandemic on tourism and unleashed travel again. The positive trend continued in full force in 2022, but two major risks – war and inflation undermine the sustainability of what has been achieved.

The war and inflation lowered expectations

At the beginning of the year, Bulgarian tourism was preparing for a flying start. However, he was grounded already in February with the start of the war in Ukraine. Thus, the military conflict near our country and the rampant inflation became the main factors that put pressure on the sector and did not allow a quick restart after the pandemic collapses. On the one hand, the war in Ukraine pushed away a lot of foreign tourists during the summer season, and on the other hand, inflation reduced Bulgarians' intentions to spend on tourism.

As for the inflow of tourists, as the most significant segment for the economy, Bulgarian tourism celebrated a successful year, but was unable to achieve what was planned due to the negative effects of the war. Markets such as Romania and Poland exceeded or approached 2019 levels, but Germany, a key market, remained only 50% of pre-pandemic levels.

Summer emotions, summer upsurge

Expected or not, despite the challenges, summer tourism in Bulgaria last year achieved good parameters - such as the number of trips, overnight stays, overnight stays, revenue from overnight stays. According to data from the Ministry of Tourism, Bulgaria is one of the countries in Europe with the largest growth and the fastest recovery of tourism compared to the pre-pandemic 2019.

The Summer 2022 season recorded an increase of nearly 20% compared to the 2021 summer season, an analysis of the department before the National Tourism Council found. Over 4.3 million tourists stayed overnight in accommodations with 10 or more beds during the summer season, and this figure does not include Ukrainian citizens. The total level of recovery of the tourist flow is 93%, assuming Summer season 2019 as 100%. Domestic tourism has fully recovered from the pandemic last year. And this summer, the trips of Bulgarians in the country exceeded 2 million, which is a growth of domestic tourism by 7% compared to 2021.

Inbound tourism is also recovering - the total number of registrations of foreign tourists is over 2 million, excluding Ukrainian citizens. The increase compared to 2021 in absolute numbers is over 500 thousand. The year confirmed the trend for Romania as the strongest market - Romanian tourists are in first place, followed by markets Poland and Germany. The other important markets for Bulgaria are Great Britain, the Czech Republic, Israel, etc. In the end, the summer tourist season ended with better results than expected. The number of vacationers is slightly below 13% compared to 2019, which was the strongest year for Bulgarian tourism.

New ski season, new hopes

Expectations for the 2022/2023 winter season are also optimistic. The forecast is that this year too the domestic market will be leading for our winter resorts. Traditionally, Bulgarian tourists make about one million trips with stays in accommodation during the ski season. The recovery of inbound tourism is likely to continue, with interest from the markets of Great Britain, Romania, Israel, North Macedonia, Serbia and Greece.

The winter tourist season in our country will be stronger than the record last year, the Ministry of Tourism predicts - up to 7% stronger than last year. Despite the good results, the ministry expects inbound tourism to reach pre-pandemic levels in 2025 at the earliest.

The wanderlust is here again

The past year showed that Bulgarian tourists are more confident and open to tourist trips - both in the country and abroad. After two years of blockades due to the pandemic, Bulgarians boldly started choosing vacations abroad. Outbound tourism recorded a growth of 9% compared to 2019, with the main markets again being neighbouring Turkey, Greece and Serbia. There was also a significant increase in travel to more exotic destinations such as the Maldives, Mauritius and Zanzibar, in addition to Egypt and Tunisia.

Bulgarian tourists have started to plan a bit longer term, and foreigners are increasingly looking for different forms of alternative tourism in Bulgaria outside of the mass summer and winter ones, according to the Association of Bulgarian Tour Operators and Travel Agencies as a trend.

The general observation is that tourist trips by Bulgarians are on an unprecedented rise. The positive trend has been visible since the summer of last year amid the recovery from restrictions due to the pandemic. During the summer months of this year, tourist trips by Bulgarians set another record. During the most active holiday period, July-September, nearly 1.75 million Bulgarians made tourist trips according to data from the National Statistical Institute, which is an annual increase of over 30%. Towards the end of the year, the trips of Bulgarians continue to develop upwards, continuing the sustainable trend of growth.

The trends in Bulgaria are not a surprise against the background of the accelerated recovery in Europe. Data from the UN World Tourism Organization showed that Europe is the fastest-growing tourist region in the world. Thanks to travel to the region, as well as US tourists returning to their favourite destinations, Europe attracted 68% of the world's 477 million international tourists between January and September 2022. This is an 81% recovery in tourist arrivals before the pandemic hit.

A survey by the World Travel and Tourism Council (WTTC) also showed that the desire to travel globally is making a comeback. According to the data, 63% of respondents plan a trip for the purpose of tourism in the next 12 months, and 27% of them - even three or more trips. This is the highest level since the start of the coronavirus pandemic, the organization said.

The hotel sector

After a two-year period of declines due to the pandemic and blocked trips, the year started optimistically for the hotel business in our country. And if in 2021 the statistics report a 60% drop in all indicators of accommodation - number of nights, overnight stays and income of hoteliers, this year the situation is completely different. 

Already at its beginning, the Bulgarian hoteliers noted successful business results, which gave a request for a strong business year. Very good indicators were recorded - number of nights, overnight stays, and revenue from nights even exceeded pre-pandemic levels in August, and the summer brought this business back to its strong days. Thus, 2022 finally put an end to the declines of the last two pandemic years, and the trend of growth in all parameters of the tourism industry continued until the very end of the year.

New risks

At the same time, the growth of prices began to noticeably outpace the quality of tourism in our country. The shock increase in costs is a fact for the whole of Europe, which has made European destinations, including Bulgaria, much more expensive for tourism. Against this background, as a tourist destination, our country is facing a new, very serious crisis - price levels are outpacing the development of the quality of the Bulgarian tourist product. It has been seriously lagging behind for years due to the shortage of staff for the sector, but it has worsened greatly since the pandemic and now due to inflationary pressures.

After two weak years, the tourism industry in Bulgaria managed to take a breather last year. However, rising inflation and war are the two shadows that weigh over the sector and will continue to define development trends in the coming year.

It is optimistic that these two factors do not stop the desire to travel. As a vacation destination, our country managed to activate domestic tourism, so many Bulgarians chose to vacation in the country. The picture is favourable in terms of visitors and revenue, and the levels of the previous peak for tourism in 2019 are also approaching, but there is a difficult road ahead to these achievements.

Source: https://www.investor.bg/a/522-turizam/366731-balgarskiyat-turizam-bavno-se-zavrashta-kam-dobrite-vremena