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2014

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BULGARIA
TOURISM REPORT
INCLUDES 5-YEAR FORECASTS TO 2017

ISSN 1747-8839
Published by:Business Monitor International

Bulgaria Tourism Report 2014
INCLUDES 5-YEAR FORECASTS TO 2017

Part of BMI’s Industry Report & Forecasts Series
Published by: Business Monitor International
Copy deadline: October 2013

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Bulgaria Tourism Report 2014

CONTENTS
BMI Industry View ............................................................................................................... 7
SWOT .................................................................................................................................... 9
Political ................................................................................................................................................. 10
Economic ............................................................................................................................................... 11
Business Environment .............................................................................................................................. 12

Industry Forecast .............................................................................................................. 13
Inbound tourism ..................................................................................................................................... 14
Table: Inbound Tourism, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Table: Inbound Tourism, Top 10 Markets by Arrivals, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Outbound Tourism ................................................................................................................................. 15
Table: Outbound Tourism, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Table: Outbound Tourism, Top 10 Destinations by Departures, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Travel & Receipts .................................................................................................................................. 17
Table: Methods of Travel, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Table: Tourism Receipts, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Hotels .................................................................................................................................................. 19
Table: Accommodation Data, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Table: Domestic Hotel Industry Value, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Industry Risk Reward Ratings .......................................................................................... 22
Table: CEE Risk Reward Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Rewards ............................................................................................................................................... 23
Risks .................................................................................................................................................... 23
Table: Europe Regional Security Ratings (scores out of 100, with 100 the best) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Market Overview ............................................................................................................... 25
Table: Top 10 Global Hotel Groups Presence in Bulgaria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Table: Bulgaria Airports Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Company Profile ................................................................................................................ 29
Albena ................................................................................................................................................... 29

Global Industry Overview .................................................................................................. 30
Table: Global overnight stays and average length of stay, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Table: Hotel Indicators, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Global Assumptions .......................................................................................................... 35
Table: Global Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Table: Global And Regional Real GDP Growth, % chg y-o-y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Developed States .................................................................................................................................... 39
Table: Developed States, Real GDP Growth Forecasts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Emerging Markets .................................................................................................................................. 40

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Bulgaria Tourism Report 2014
Table: Emerging Markets, Real GDP Growth Forecasts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Table: BMI Versus Bloomberg Consensus Real GDP Growth Forecasts (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Demographic Forecast ..................................................................................................... 43
Demographic Outlook .............................................................................................................................. 43
Table: Bulgaria's Population By Age Group, 1990-2020 ('000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Table: Bulgaria's Population By Age Group, 1990-2020 (% of total) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Table: Bulgaria's Key Population Ratios, 1990-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Table: Bulgaria's Rural And Urban Population, 1990-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Methodology ...................................................................................................................... 47
Industry Forecast Methodology ................................................................................................................ 47
Risk/Reward Rating Methodology ............................................................................................................. 48
Table: Tourism Risk/Reward Ratings Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Table: Weighting Of Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

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Three billboards based on the themes of the sea. Recent developments include: ■ A new passenger terminal has opened at Varna Airport. we expect Spa tourism to continue to develop. The line will be used to transport both freight and passenger traffic. a shortage of skilled workers in the tourism sector and relatively underdeveloped infrastructure remain key areas the Bulgarian authorities need to address in order to ensure the sustainable development of the tourism industry. culture and ecotourism were promoted at the airport in association with airport operator Fraport .Bulgaria Tourism Report 2014 BMI Industry View BMI View: We believe that the low cost of land and lack of luxury accommodation make for a good investment environment for international hoteliers and this is likely to encourage further enlargement of their national footholds in the future. although continuing economic uncertainty might affect Bulgaria's tourism industry in the short term.which also operates Varna and Burgas airports in Bulgaria. which should bolster its tourism industry. BMI believes unrestrained hotel construction activity in some of the country's largest seaside and mountain resorts. the majority of which currently have a rather limited presence in the country. It has an area of 20. Finally. reports Railway Gazette International.2mn passengers in 2012 ■ A new railway bridge has opened between Bulgaria and Romania. and meetings. Moreover expanding in Bulgaria and in the wider CEE region is a key strategy for many of the top global hotel chains. where present at all. It is part of the Pan-European Corridor IV which spans a vast section of the continent encompassing Dresden in Germany. Istanbul in Turkey and Thessaloniki in Greece. The BGN75mn (US $51mn) facility will serve as a gateway to the Black Sea region of Bulgaria. Further. Energy and Tourism launched a month-long promotional campaign at Frankfurt Airport. © Business Monitor International Page 7 . Bulgaria is in the enviable position of being able to appeal to both Western and Eastern European source markets in the years ahead. Varna Airport served a total of 1. However.000 square metres and is approximately three times the size of the previous terminal. reports Airport Technology. we anticipate that many hotels and chains will target business tourism. as it is likely to become a key growth area for the Russian market. Equally. incentives. conferences and exhibitions tourism could be another growth area. To raise Bulgaria's profile across Europe and among the wider travelling public. The Danube 2 Bridge will run between Vidin in the former country and Calafat in the latter. in September 2012 the Ministry of Economy. we expect a strong recovery in the future as the region benefits from improving consumer spending and a growing middle class.

8mn tourists over 2014.700 (an increase of almost 5% year on year) and the overall value of the hotel industry will reach US$1. which will account for 8.14bn. © Business Monitor International Page 8 . Work comprises the construction of a dual carriageway between Dolna Dikanya and Blagoevgrad.Bulgaria Tourism Report 2014 ■ The Sturma motorway development project in the Yugozapaden region of Southwest Bulgaria has secured EUR274mn (US$359.5mn over 2014. Key BMI Forecasts include: ■ We expect total arrivals to reach 9. ■ Of this.48mn) in financial assistance from the European Commission (EC). ■ The number of hotels will rise to 2. the majority will come from Europe. and from Sandanski to the border crossing with Greece at Kulata.

conferences and exhibitions tourism could be another growth area. Threats ■ A shortage of skilled workers in the tourism sector. particularly for the Russian market. ■ Investment in airport expansions ■ Regional rivals such as Greece and Turkey are better established as holiday destinations. ■ Hotels in Sofia are arguably overly reliant on business trade. ■ Spa tourism could become a key growth area. ■ Unrestrained hotel construction activity has damaged the natural environment and put a strain on the country's electricity supply.Bulgaria Tourism Report 2014 SWOT SWOT Analysis Strengths Weaknesses ■ Government investment in the industry is relatively high. with low occupancy rates reported on weekends. © Business Monitor International Page 9 . ■ Increasingly well developed international connections via road and rail. incentives. ■ Underdeveloped infrastructure. ■ Growing Russian source market. ■ Meetings. ■ The low cost of land and lack of luxury accommodation make for a good investment environment for international hoteliers. Opportunities ■ Limited global hotel group presence due to relatively static market at present. ■ Well-developed summer and winter holiday resorts.

both through closer economic integration with. Opportunities ■ EU membership will provide opportunities for further reform. Weaknesses ■ Massive political unrest and the resignation of the government will likely presage a prolonged period of political uncertainty and protest. reform the criminal justice system and create administrative capacity is still required. Bulgaria benefits from the EU's institutional support mechanisms. extensive action to address corruption. and Brussels reserves the right to impose penalties if EU members fail to make progress.Bulgaria Tourism Report 2014 Political SWOT Analysis Strengths ■ EU membership has provided a powerful stabilising anchor amid the international financial and economic crisis. As a member of the bloc. and substantial financial aid from. the bloc. © Business Monitor International Page 10 . Eurozone ambitions will continue to anchor the government's macroeconomic policy. Threats ■ Despite some progress.

Opportunities ■ Despite the deep recession in 2009 and overhang of private sector debt. real convergence gains with Western Europe remain in play. Weaknesses ■ Rising competition in key eurozone markets for Bulgarian exporters from regional peers such as Romania and Croatia will weigh on revenue growth. Bulgaria's currency board has become a bastion of price stability. we maintain our view that the economy is headed towards a more sustainable long-term external position. ■ Having stood firm for over 10 years. not least because of strong links between Greece and the banking sector. ■ Monetary policy is restricted by the Currency Board Arrangement leaving the government with fiscal policy as the only main lever with which to steer the economy. © Business Monitor International Page 11 . Threats ■ Bulgaria remains vulnerable to deterioration in the eurozone crisis.Bulgaria Tourism Report 2014 Economic SWOT Analysis Strengths ■ Although Bulgaria's current account swung back into deficit in 2012.

improved the extent of financial intermediation and reduced systemic risk. particularly in and around major cities. ■ The reliability of official retail sales statistics has been questioned and actual retail sales may be higher than stated. ■ Despite a strong political commitment to anti-corruption initiatives. Real estate companies have said there are almost no vacancies and a premium has to be paid for modern facilities. © Business Monitor International Page 12 . estimated by the World Bank to be near 40%.Bulgaria Tourism Report 2014 Business Environment SWOT Analysis Strengths ■ Financial sector reform has deepened the domestic capital market. hinders research and underestimates real purchasing. Threats ■ Reports of corruption in the tax administration system create an unfavourable impression of the business environment. ■ Continuing convergence of the private sector regulatory framework to the EU model should improve transparency. Weaknesses ■ A lack of adequate personnel and technical resources in the judicial system undermines its independence and law enforcement. the authorities have not reduced graft to acceptable EU levels. ■ The process of political and economic transformation has been accompanied by a successful modernisation of the legal framework governing commercial transactions. ■ A concern for retailers is the soaring cost of land. Opportunities ■ The proposed privatisation of a number of state-owned assets in the energy sector should present opportunities for foreign capital investment in Bulgaria. The size of the Bulgarian grey economy.

000 5. with low occupancy rates reported on weekends. it is not as successful at attracting the burgeoning CEE inter-regional tourism as some of its peers and this has led to less large hotel group investment developments than can be seen in nearby countries such as Ukraine. These issues could result in downside risks to our forecasts if not properly dealt with. Bulgaria is attempting to develop more sports- 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 development of the tourist industry and we believe TOTAL ARRIVALS: Total arrivals. Notes: BMI However. We also warn that unrestrained hotel construction activity in some of the country's largest seaside and mountain resorts.000 There is strong government backing for the that this makes the country's tourism sector an attractive proposition for many potential entrants. '000 TOTAL DEPARTURES: Out-bound. total departures~ '000 related tourism to move annual international tourism revenue towards EUR5bn over the coming years. a shortage of skilled workers in the tourism sector and relatively underdeveloped infrastructure remain key areas the Bulgarian authorities need to address in order to ensure the sustainable development of the tourism industry. particularly from key regional neighbours. This has led the country's revenue Total Arrivals and Outbound Departures ('000) 2000-2017 from tourism to increase by over 3% y-o-y from revenues at the same time last year and the tourism 15. Moreover.Bulgaria Tourism Report 2014 Industry Forecast BMI View: Overall we believe the Bulgarian tourist industry will continue to see stable growth between 2013 and 2017. Overall. Plus. © Business Monitor International Page 13 . hotels in Sofia are arguably overly reliant on business trade. Although coastal receipts and occupancy rates were down over the summer months. winter ski and spa resort figures showed good growth and the number of tourists. 10.000 industry has grown at almost twice the pace of projected economic development. will continue to grow. Bulgaria has seen an increase of almost 6% More In Than Out in tourist arrivals year-to-date (y-t-d) from the same point in 2012.

'000.90 -3.37 4. arrivals by region. ILO.38 85.21 11. '000 9.29 -3. arrivals by region.00 4.69 5.75 73. and will continue to do so through to 2017. Middle East.12 10. '000 7. However.736.05 -0. '000 131.68 8.66 135.29 0. % change y-o-y Source: BMI.779.06 17.55 9.05 1.19 117. arrivals by region.00 4.56 3.67 3.52 Total Arrivals.00 4.97 10.60 -1.91 2.82 8.35 -4.787.17 8.439.83 In-bound. % change y-o-y 1.984.03 4. Europe.66 Total Arrivals.44 10.12 123.26 -3.136. arrivals by region. Asia Pacific.96 4.891. Meanwhile we project that the fastest rate of growth will be seen in Middle Eastern tourist arrivals which will reach double digits in 2013.05 4.61 10.00 In-bound.47 10. UN © Business Monitor International Page 14 .54 74.22 9.77 5.99 77.40 In-bound.374.372.47 8.45 9. Of this the majority come from Europe.45 22. arrivals by region. '000 77. Middle East.221.33 85. Table: Inbound Tourism.80 In-bound.29 5.67 10. North America.712. which will see growth of almost 4% over 2013. arrivals by region.27 6. Asia Pacific.86 10. arrivals by region. Europe.54 In-bound.866.86 2. % change y-o-y 6.Bulgaria Tourism Report 2014 Inbound tourism Tourist arrivals have grown over 2013 by 4% according to our forecasts and will continue to see 4% growth year on year through to 2017.15 11.06 4. '000 In-bound. due to economic uncertainty across many countries in Asia the overall number of Asian tourists to Bulgaria declined over 2013.41 4.57 80.95 8.87 -5. as will those from North America. 2010-2017 2010 2011 2012e 2013f 2014f 2015f 2016f 2017f 8.14 138.59 106.00 4.973.06 In-bound.09 10.20 9. % change y-o-y In-bound.118.04 80. North America.34 9.95 -31.24 11.21 1.95 95.78 130.22 -5. arrivals by region.590.03 8.40 3. % change y-o-y 6.25 7.06 9.506.76 4.

68 812.64 Poland 294.91 1.63 387.30 433. In June.14 764. UN Outbound Tourism Outbound tourism in Bulgaria is set to see a steady increase over the next few years.70 1.44 185.72 354.28 Russia 389.89 1.52 209.40 332. Botev announced that due to the increase in Russian tourists.58 847.493.002.000 by 2017.14 860. with 6.52 917.753.34 1.85 349.18 456.468.11 236.206.445.24 188. The Turkish tourists came in at the fourth place with 104. and this is reflected in our forecasted arrivals increase from just over 600.017.30 1.499. the government announced that even its modest expectations for 1.95 812.94 282.26 1.05 241.42 812.120.52 477.97 813. Our downgrades to our real GDP forecasts last quarter are looking increasingly likely to be realised as an economic slowdown continues to take hold in Bulgaria.Bulgaria Tourism Report 2014 In early October 2013. most of Bulgaria's winter tourists were Greeks followed by Romanians.91 331.0% growth were unlikely to be achieved.44 438.85 784.08 285.94 335.64 1. Table: Inbound Tourism.087.38 224.48 1.76 638.64 411.13 289.41 453.045.89 Germany 853.68 Greece 1.863.51 1. more consulates would open in Russia to process visa applications.08 251.136. with Prime Minister Plamen Oresharski stating that "the estimates that the previous government made about economic growth were a bit sweetened © Business Monitor International Page 15 .16 296. ILO.80 325. This was an impressive increase given the 2012 bankruptcy of tour operator Bulgarian VIP Tours (BVT).65 984.42 1.49 765.39 706.80 822.25 811.75 811. BVT's financial problems reportedly stemmed from the 2010 collapse of Russian tour operator Capital Tour. which dealt primarily with Russian tourists.35 874.40 Turkey 943.90 308. which owed BVT about EUR2mn when it ended operations. Top 10 Markets by Arrivals.90 Ukraine 199.00 United Kingdom 309. national statistics have shown that over 2012-2013.74 286. Deputy Economy and Energy Minister Branimir Botev announced that Russian inbound tourists had seen the largest increase in arrivals year-on-year.58 Austria 181.068.375 visitors over the winter months. 2010-2017 2010 2011 2012e 2013f 2014f 2015f 2016f 2017f Romania 1.43 836.000 over 2013.6% growth forecast for 2013 alone.77 609.68 424.66 Source: BMI.97 439.112. This is in spite of a declining economy according to our projections.70 1.48 306.86 469.05 1.971. Meanwhile.18 1.28 711.092.38 1. we believe Russian tourist arrivals will grow to almost 900.000 to almost 670.60 1.58 186.27 301.85 556. In light of factors such as these.63 667.21 1.646.70 Macedonia 409.

60 -5.885.399. Africa.35 15. resident departures by destination.97 40.30 -5. resident departures by destination. tourist departures.07 26.58 4.94 5.47 0.207.35 -5.49 0. % change y-o-y 4. '000 3.51 6. tourist departures.13 46.17 4.92 5.42 40.727.81 4.92 3.91 2. North America.15 15.17 3.72 4.61 17.97 3.63 0. % change y-o-y -0.57 3.76 2.24 4.66 3. UN © Business Monitor International Page 16 .51 0.68 21. resident departures by destination.72 3.974.58 Out-bound.67 Out-bound.71 45.82 4.32 Out-bound.85 3.86 4.26 9.79 4.47 5.29 24.13 -4.06 5.35 -2. resident departures by destination.87 4. % change y-o-y -1.37 6. Africa.48 5.481.52 Out-bound. resident departures by destination.34 5.55 0.82 3. Europe. '000 22.10 4.54 11.370.637.65 7. Table: Outbound Tourism.14 5.25 14.31 3.40 5. Asia Pacific.38 8. resident departures by destination.16 27. resident departures by destination.37 Out-bound. '000 Source: BMI.05 4.55 Total Out-bound.60 Out-bound.08 4. '000 35.35 5.48 25.673.471. '000 16.061. Latin America.19 25.16 9.63 4.75 42. resident departures by destination.54 3.53 4. Asia Pacific.13 19. Latin America. '000 3.94 35. However our positive outlook for outbound tourism is due to a number of factors such as the fall in unemployment levels.42 Out-bound.08 6. % change y-o-y 16. 2010-2017 2010 2011 2012e 2013f 2014f 2015f 2016f 2017f 3.520.64 Out-bound.72 Out-bound.154. Middle East.11 15.67 24.71 0. '000 4. resident departures by destination.52 Average Tourist Departure per 1000 of the population 0.53 3.39 -0.14 14.46 38. Middle East.65 7. and stable household spending. % change y-o-y 0.34 23.02 6.30 Out-bound.567. resident departures by destination.33 6.27 43.605. resident departures by destination.57 3.43 3.80 3.58 4.64 10.24 3.43 3. Europe. resident departures by destination.57 4. North America. % change y-o-y 0.37 18.81 Out-bound.36 9.66 3.62 3. ILO.27 -6.63 Out-bound.86 3.60 3.305.61 0.64 4.66 4. % change y-o-y 33.58 0.16 Out-bound.03 5.Bulgaria Tourism Report 2014 up".88 16.67 4.88 6.

090. and Romania. largely due to the completion of a number of airport expansions in the country.24 52. Top 10 Destinations by Departures.19 1.63 Croatia 30.13 72.27 848. ILO. 2010-2017 2010 2011 2012e 2013f 2014f 2015f 2016f 2017f 1.68 88.56 1.00 36.13 46.81 75.90 222.80 1.57 47.75 42. Many also travel to Western Europe in search of jobs. According to our key project database.45 40. through the Makaza Pass. © Business Monitor International Page 17 .91 798.47 39.19 125.05 Ukraine 27.39 686.708.90 886.66 45.33 73.607.00 797.51 Austria 53.34 72.02 41.42 1. however we believe that Bulgarian tourists travelling to Greece will increase.16 63.44 1.71 45.491.97 40. a road between Bulgaria and Greece.Bulgaria Tourism Report 2014 Greek arrivals into Bulgaria are likely to decline somewhat under the continuing economic tribulations. was opened.79 1.56 79.135.70 744.645.00 1.96 38.92 68.70 Greece 664.24 71.54 34.27 43. Table: Outbound Tourism.032.25 1.90 74.33 59.67 1.00 37. UN Travel & Receipts Air passenger numbers continue to increase in Bulgaria.15 172.75 246.00 72.38 195. there will be a corresponding decrease in the number of rail passengers as cheap flights become an increasingly viable alternative.38 43.39 43.83 54.15 1. This is not only due to economic considerations but also because travel is becoming easier. Other roads and railways are also being constructed to facilitate trans-boundary travel between Bulgaria and its regional peers and this will continue to encourage out bound travel by Bulgarians.60 Russia 38.10 31.97 1.91 116. Turkey.569.492.11 685. particularly to Greece.21 599.41 1.83 Turkey Source: BMI.49 Hungary 133.42 40. Moreover there are a great deal of road and rail projects which are also facilitating further travel. Earlier in September 2013.92 63.30 144.52 36.43 45.058.71 50.00 944.52 83.013.433. US$66mn worth of airport projects are either underway or recently completed.25 Romania 786.23 Germany 56. with a particular emphasis on passenger terminals.74 73.46 38. however as more cheap flights and package holiday airlines set up in Bulgaria.50 50.00 68.45 USA 35.621.50 46.

95 1.93 0. ILO Meanwhile. registered airline domestic and non-domestic takeoffs.41 12.51 7.852 tourists visited the Bulgarian winter resorts.60 -0. mn per km % change y-o-y -2.08 5.32 2.00 2. total receipts. total receipts. and profits are down.05 1. although tourist figures are up.100.9% year-on-year increase compared to the season in 2011/2012 and during this period through till March 2013. out-bound 0. This is a 4.063.089. US$bn.96 5.50 2.64 Air transport. 2010-2017 International tourism.65 4. % change yo-y © Business Monitor International 2010 2011 2012e 2013f 2014f 2015f 2016f 2017f 4. '000. 1.70 11.00 2.51 9.15 -5. 2010-2017 2010 2011 2012e 2013f 2014f 2015f 2016f 2017f Air transport passengers carried. disappointing investors.052.Bulgaria Tourism Report 2014 Table: Methods of Travel. This shows that spa tourism and skiing continue to show profits and room for growth.60 -0.75 0. '000 11.25 1. the summer season coastal tourist numbers are lower than expected.96 12. For example.60 Source: BMI. the number of tourists who have visited Bulgaria's Black Sea coast during the summer of 2013 increased by only 5% comparing it to last year.11 2.60 -0.27 1.69 Air transport. US$bn International tourism.32 11.32 11. the revenue from the Bulgarian winter tourism season 2012/2013 almost reached EUR 417 million. Table: Tourism Receipts. Contrastingly.00 -0.83 Page 18 .05 0.02 9.50 2. mn.44 7.81 1.51 10.79 6.076.18 12.96 2.46 16. out-bound.50 -0. mn.41 5. registered airline domestic and non-domestic takeoffs. % change y-o-y 0.32 11.00 0.55 4. UN.12 1.00 3. data from the National Statistics Institute shows.064. % change y-oy 0.92 6.100.60 -0.26 Domestic Railway passengers carried.93 2.04 4. according to national statistics.34 1.51 5. a large number of these tourists are at the lower budget end of the spectrum which further contributes to poor profits. in contrast to Bulgaria's summer tourism.57 12. mn per km 2.18 1.56 Domestic Railway passengers carried.039. Moreover.80 2.33 Air transport passengers carried.80 0.07 6.73 9.027.90 9.86 2.

03 14. BGNbn. US$bn 0.11 4. EURbn.73 0.91 8. Earlier in 2013.43 8.40 10.65 10. BGNbn 5.69 0. ILO Hotels According to the Chairman of the Bulgaria Hotel and Restaurant Association. EURbn 2.55 0.95 11.88 International tourism.61 0.71 7.87 1. In the announcement.54 0.78 6.50 14.24 10.02 4.75 2. receipts for travel items.27 4.00 11.53 0. receipts for travel items.95 Source: BMI.46 7.46 0.85 9.62 0.39 4.32 13.19 7.78 9. US$bn. % change y-o-y -0.32 13.60 2. receipts for transport services. he called for the introduction of multiple-entry visas for Russian-speaking and Turkish tourists and for the allocation of 1% of the revenues in the sector to external advertising.86 7.23 3.80 International tourism. He argued that if these measures were implemented.79 5.89 3. % change y-o-y -0.86 8. UN.27 5.45 11.Continued 2010 2011 2012e 2013f 2014f 2015f 2016f 2017f International tourism. EURbn 0. receipts for travel items.38 International tourism.25 5. 'the number of holidaymakers from these countries is expected to grow by 10% on an annual basis over the next 5 years'. receipts for transport services.95 International tourism. EURbn.58 8. US$bn 3.46 9.75 0. he appealed to the government to implement anti-crisis measures to boost the country's faltering hotel sector.43 0.35 0.11 2.19 1. % change y-o-y -1.35 International tourism.57 4.Bulgaria Tourism Report 2014 Tourism Receipts.95 International tourism.53 13.16 9. receipts for travel items. receipts for travel items. receipts for transport services.03 9.30 International tourism.95 11.43 0.39 8.67 0.85 0.98 9.00 11.10 6.88 International tourism. turnover rates and visitor numbers in 5 years' © Business Monitor International Page 19 .37 9. receipts for transport services.49 0. receipts for transport services.88 International tourism.25 6. BGNbn 0.29 International tourism.08 13.83 0. BGNbn. He went on to say that such methods could boost occupancy rates to 30% though he and his association were aiming for 40% over the longer term which he believed would allow Bulgaria to 'double tourism revenues.44 10.69 2. US$bn.64 14. % change y-o-y -5.57 0. % change y-o-y -1.22 12.30 3.38 0.07 1. % change y-o-y -6.45 3. receipts for transport services. occupancy rate in Bulgarian hotels is still down at only 20%.66 6.96 1.62 11.79 5.78 9. receipts for travel items.66 International tourism.58 8.41 1.77 4. 2010-2017 .43 12.22 12.81 5.

49 Domestic Hotels and Restaurants Industry Value. rising from US$1.78 2.01 Domestic Hotels and Restaurants Industry Value BGNbn. although overall domestic hotel industry value has seen a moderate increase over 2013.63 Number of Hotels and establishments '000 Number of Hotels and establishments '000 % change y-o-y Total overnight stays '000 9.14 1.37 8.06 5.38 18.03 -0. This is mainly due to a fall in the prices at seaside hotels and lower than expected coast-bound tourists.26 0.06 Average length of stay.95 9.76 1.04 1.377.84 1.67 3.08 17. ILO Moreover.52 3.80 7. However this decline was countered by an overall increase in hotel prices in other key destinations including Plovdiv and Sofia.67 4.16 6. % change y-o-y 19.78 0. US $bn.69 -4.59 1.03 3.792.90 0. 2010-2017 2010 2011 2012e 2013f 2014f 2015f 2016f 2017f Domestic Hotels and Restaurants Industry Value BGNbn 1.60 -0.017.709.88 -31.83 Average length of stay.03 Domestic Hotels and Restaurants Industry Value.7bn.49 8.04 5.14 5.75 12. % change y-o-y 13. % change y-o-y 4.07 5.76 2.13 1. The highest prices continue to be in Albena Table: Domestic Hotel Industry Value.57 2.12 2.451.87 2.11 16.11 5.42 55.08 20.40 3.Bulgaria Tourism Report 2014 Table: Accommodation Data.49 0.70 1.29 4.06 5.92 2.98 1. US $bn 1.15 1.07 5. EURbn © Business Monitor International Page 20 .53 1.18 1.48 -0.24 1.23 Domestic Hotels and Restaurants Industry Value.81 0. in September 2013 the prices of accommodation in hotels in Bulgaria fell. 2010-2017 2010 2011 2012e 2013f 2014f 2015f 2016f 2017f 2.97 6.263.94 32.84 -26.41 4.05 Source: BMI.65 1. compared both to the previous month and to September 2012.24 4.37 Total overnight stays '000.383.15 1.87 0.42 3.89 8. % change y-o-y -0.70 2. nights 5.08 1.37 1.461.14 7.28 13.86 2.35 8.65bn to US$1. UN.94 0. nights.39 0.75 -1.85 0.11 -0.65 -1.80 4.44 14.96 -6.03 0.

24 6.72 -6.91 3.65 3. US $ per capita.244.09 2.64 6. % of GDP Domestic Hotels and Restaurants Industry Value per employee.29 4. ILO © Business Monitor International Page 21 .503. US$.12 2.875.66 159.393.56 -0.95 166.54 0. % change y-o-y Domestic Hotels and Restaurants Industry Value.91 158.90 -2.72 4.02 Domestic Hotels and Restaurants Industry Value.201.72 6.11 2.652.92 -3. US $ per capita 140. UN.33 Domestic Hotels and Restaurants Industry Value per employee.05 5. EURbn.32 -1.148.Continued 2010 2011 2012e 2013f 2014f 2015f 2016f 2017f 19.90 3.95 148.79 Domestic Hotels and Restaurants Industry Value.65 6.18 2.05 2. 2010-2017 .62 1.11 2.80 4.52 -3.88 19. % change y-oy Source: BMI.89 1.49 2.82 6.41 4.44 7.87 Domestic Hotels and Restaurants Industry Value.94 3.57 153.Bulgaria Tourism Report 2014 Domestic Hotel Industry Value. US$ 6.07 2.92 161.24 9.69 6. % change y-o-y 14.50 6.76 5.90 175.401.

19 41.17 71.83 64.08 72.94 22 Slovakia 35.16 54.85 54. Table: CEE Risk Reward Ratings Country Structure Risks to realisation of potential returns Market risks Country Risk Tourism Rating Rank 40.22 45.17 61.26 49.96 53.67 43.85 73.05 11 Albania 50.51 45.70 57.33 52.13 31.50 79.99 55.06 62.28 48.14 20 Serbia 42.51 24 Limits of potential returns Tourism Market Hungary 54.05 74.49 42.83 48.41.63 62.10 64.87 48.67 58.00 69.78 52.83 55.46 59. This puts it near the bottom of the pack.00 43.88 32.67 62.30 80.51 61.84 15 Macedonia 44.35 52.06 58.78 56.64 31.35 62.73 48.41 Slovenia © Business Monitor International Page 22 .33 4 Russia 50.78 70.08 63.17 70.53 53.31 64.05 48.98 59.73 55.14 69.Bulgaria Tourism Report 2014 Industry Risk Reward Ratings Bulgaria is in 20th place in the region with a score of 48.74 59.34 64.83 74.58 42.00 53.02 2 Belarus 60.83 50.69 51.38 66.79 39.13 30.83 76.57 9 Cyprus 48.80 62.16 69.21 39.17 48.98 48.70 45.33 57.77 54.70 59.81 66.20 58.02 56.77 59.67 69.15 30.67 63.41 16.03 62.10 71.69 54.00 58.33 54. between Serbia and Bosnia.43 54.04 52.86 75.83 67.21 12 Poland 48.55 53.64 50.87 65.30 40.50 56.31 3 Estonia 47.23 64.87 59.11 13 Montenegro 47.00 49.50 70.00 21 Ukraine 44.71 57.68 54.96 53.46 68.00 65.97 52.70 18 BosniaHerzegovina 48.76 44.64 72.99 67.24 73.85 62.97 5 Lithuania 49.65 63.68 16 Kosovo 48.33 56.88 56.40 41.67 65.95 58.50 19 Bulgaria 43.00 8 Moldova 52.73 6 Armenia 52.72 33.50 38.38 60.16 14 Latvia 44.11 36.07 49.25 7 Czech Republic 46.43 50.96 23 Turkey 42.67 62.41 31.45 17 Croatia 42.43 55.64 51.88 34.97 53.95 50.58 35.38 46.33 61.19 54.19 52.04 66.09 48.62 65.30 1 55.56 10 Kazakhstan 50.10 60.45 35.76 25.53 67.03 50.78 59.71 69.50 68.

83. market openness and security risks.73 16. so this has substantially reduced its overall market rewards score.31 66.30 42. Finally. which is currently 35.67 Country Structure Risks to realisation of potential returns Market risks Country Risk Tourism Rating Rank 54.14 62. However. Bulgaria scores poorly for this. or a country (such as Greece) withdrawing all together. Risks This offers an evaluation of industry-specific dangers and those emanating from the state's political and economic profile that call into question the likelihood of anticipated returns being realised over the assessed time period. The market risks score takes into account short term political stability and regional stability. © Business Monitor International Page 23 . along with broader industry/ state characteristics that may inhibit its development. sending shock ripples through the whole regional economy with a detrimental impact on Bulgaria and on investor confidence.05. Bulgaria is only going to see limited growth over the next 12 months.Bulgaria Tourism Report 2014 CEE Risk Reward Ratings . and is in 22nd place for infrastructure development. it also considers Bulgaria's vulnerability to external factors . to a smaller number of inbound arrivals than its regional peers and a correspondingly reduced international receipt and hotel industry values.Continued Romania Limits of potential returns Tourism Market 31. in comparison to a number of its neighbours. despite ongoing expansions and a fairly healthy transport project pipeline as other CEE countries are investing far more heavily in their infrastructure. legal framework. and a limited volume of outbound departures.28 69. BMI's proprietary country risk scores cover corruption. Rewards This is an evaluation of the sector's size and growth potential in each state. The Country Rewards score takes into account labour costs and infrastructure. bureaucracy. The reward ratings for tourism take into account the numbers and % growth of tourist arrivals over the past year and our forecasts for future growth over 2014. This is Bulgaria's highest score and it comes in at 11th in the region with a score of 64.05 25 Source: BMI Bulgaria's score is limited by a number of factors.in this case a further decline in the European currency block. regaining ground lost over the past year. ranging from relatively low consumer spending.

Terrorism. Each rating (State. The 'Composite security risk rating' is the principal rating. Source: BMI © Business Monitor International Page 24 . The 'Composite domestic security risk rating' comprises 'Terrorism' and 'Criminal'. Each of the three risks is given equal weighting. It comprises 'Inter-state' the risk of becoming a primary party to an inter-state conflict that threatens significant damage to homeland.Bulgaria Tourism Report 2014 Table: Europe Regional Security Ratings (scores out of 100. each of which is given equal weighting.the risk of (politically motivated) violence against expatriate workers. 97 94 78 86 3 90 3 Germany 100 82 84 83 4 89 4 Slovakia 97 95 79 87 5 90 5 UK 95 75 95 85 6 88 6 France 96 77 89 83 7 87 7 Hungary 93 90 71 81 8 85 8 Romania 95 94 63 78 9 84 9 Italy 98 78 71 75 10 82 10 Spain 97 65 85 75 11 82 11 Croatia 96 92 63 78 12 84 12 Bulgaria 97 89 49 69 13 78 13 Belarus 71 96 69 82 14 78 14 Kazakhstan 88 79 58 69 15 75 15 Turkmenistan 82 79 53 66 16 71 16 Greece 73 71 65 68 17 70 17 Turkey 74 62 65 64 18 67 18 Russia 80 63 39 51 19 61 19 Ukraine 53 90 45 68 20 63 20 Uzbekistan 74 57 52 55 21 61 21 Kyrgyzstan 73 60 41 50 22 58 22 Bosnia & Herzegovina 49 74 51 63 23 58 23 Serbia 52 73 52 63 24 59 24 Tajikistan 67 48 35 41 25 50 25 Scores out of 100. Criminal) is assessed subjectively by our analysts within a clearly defined methodology. incorporating a minimum of six conceptually distinct elements. with 100 the best. 'Terrorism' the risk of terrorist groups (domestic or international) being able to launch a major attack/sustained campaign. and 'Criminal' . with 100 the best) Interstate risk Terrorism risk Criminal risk Composite domestic risk Regional rank Composite security rating Ranking Slovenia 99 99 92 96 1 97 1 Poland 98 93 79 86 2 90 2 Czech Rep.

is the representative body of the hotel industry. and then rise in early 2015 to reach a However despite this. albeit erratically. BMI © Business Monitor International Page 25 . Budget hotel chain easyHotel also operates one property in Sofia. facilitated by the recently completed airport passenger terminals. Radisson. the BRHA also works with other state and public tourism bodies to develop the country's hotel industry. For example. US$bn (RHS) and there are a number of attractive factors to address when considering investing in the Bulgarian accommodation sector. However.This will be supported by the strong rise in inbound tourist arrivals.Bulgaria Tourism Report 2014 Market Overview BMI View: As Bulgaria develops its tourism industry. Hilton. in order to attract higher net-worth tourists. Iberostar Hotels and Resorts. Though it will suffer a slight decline over the 1 next year or so. in April 2012. and provided the economic recovery can strengthen from 2013 into 2014.2bn. as the value of the industry has continued to rise. BMI expects more high-end properties to be added to the national accommodation supply. established in 1993. Against this backdrop. Park Inn. and Starwood Hotels & Resorts. Best Western. As well as actively promoting its members' business interests. there is room for optimism 2017 2016 2015 2014 2013 2012 2011 2 2010 plateau of around US$1. Number of hotels and establishments.2 no profits to be had. We believe that the hotels sector will only see Limited Growth in Future limited growth over the next few years as incoming tourism remains relatively steady and there is little in the way of industry value growth to tempt hotel chains to expand their presence or invest heavily in Hotel numbers ('000) and Hotel industry Value (US$bn) 2010-2017 4 the country. over the past few 3 years. The Bulgarian Hotel and Restaurant Association (BRHA). that is not to say that there are 1. Foreign hotel chains operating in Bulgaria include Accor. Minotel. '000 (LHS) Hotels and restaurants industry value. Kempinski. BMI believes a slow and steady growth trend in Bulgaria's hotel industry should take place over the forecast period to 2017. The leading domestic player in the hotel industry is Albena.

Marriott Hotels. with classification certificates no longer valid indefinitely. which many hotels fail to meet for the majority of the year given that many of them are only open for the peak summer season (or only in winter for ski resorts). the Sofia News Agency reported on new government plans that will require all hotels and restaurants to be subject to reclassification every five years.Bulgaria Tourism Report 2014 Bulgarian hotel operators were cheered by a ruling from the constitutional court that a 5% tourism tax to be levied on all hotel owners . The government introduced the tax to replace an old system of locally levied tourist Table: Top 10 Global Hotel Groups Presence in Bulgaria Hotel Presence Brands Accor 2 hotels in Plodiv and Sofia Mercure. and Varna Best Western.introduced by the government in 2011 . Sofia. however there are plans to enter the market with 3 of their brands . The court said the law mixed two types of direct taxation. We believe that the low cost of land and lack of luxury accommodation make for a good investment environment for international hoteliers and are likely to encourage further enlargement of their national © Business Monitor International Page 26 . one based on revenue (overnight stays) and one based on property (hotel size). The new tax assumed that all Bulgarian hotels have minimum occupancy of 30% across the year. Best Western Premier Carlson Rezidor Hotel Group 2 hotels in Sofia Park Inn. and a Doubletree at Golden Sands Hyatt no presence Intencontinental Hotels Group 1 hotel in Sofia . Novotel Best Western International 8 hotels in Rousse. Best Western PLus. Renaissance Hotels and Courtyard. one under the hilton brand in Sofia. with all companies having to ensure standards are maintained in order to keep their star ratings. Doubletree Holiday Inn Source: BMI In September 2012.A Holiday Inn Marriott No presence as of yet.was unconstitutional. Radisson Blu Choice Hotels International no presence Hilton Two hotels. Starwood One Sheraton in Sofia Sheraton Wyndham One Ramada hotel in Plovdiv Ramada Hilton. BMI believes these proposals should strengthen the quality of Bulgaria's tourism offering. which the Bulgarian constitution does not allow.

2 mn passengers/yr Fraport AG 2009-2013 Completed (Opened in August 2013) 15 1. Table: Bulgaria Airports Projects Project Name Value (US $mn) Capacity/ Length Companies Timeframe Status 51 1. and meetings. incentives. in particular road and rail connections to Greece. Finally. However there are also a number of projects in the pipeline or recently completed which will extend Bulgaria's overland connections to its regional peers. Istanbul in Turkey and Thessaloniki in Greece. amongst others. A new railway bridge has opened between Bulgaria and Romania. The Danube 2 Bridge will run between Vidin in the former country and Calafat in the latter. Romania. It is part of the Pan-European Corridor IV which spans a vast section of the continent encompassing Dresden in Germany. we anticipate that many hotels and chains will target business tourism. The line will be used to transport both freight and passenger traffic. and this will be facilitated by a number of factors including the ongoing investment in airports. New Passenger Terminal Bourgas International Airport expansion Source: BMI Key Projects Database We believe that the number of tourist arrivals will continue to rise. and Turkey. © Business Monitor International Page 27 . as it is likely to become a key growth area for the Russian market. conferences and exhibitions tourism could be another growth area. particularly passenger terminal expansion. we also highlight that we expect Spa tourism to continue to develop. Equally.Bulgaria Tourism Report 2014 footholds in the future.7 mn passengers/yr Fraport Twin Star Airport Management 2010-2011 Under construction Varna Airport. Moreover expanding in Bulgaria and in the wider CEE region is a key strategy for many of the top global hotel chains.

2 and 4 .Bulgaria Tourism Report 2014 The Sturma motorway development project in the Yugozapaden region of Southwest Bulgaria has secured EUR274mn (US$359. at Burgas and Varna. US$bn (RHS) TOTAL ARRIVALS: Total arrivals. Work comprises the construction of a dual carriageway between Dolna Dikanya and Continuing Airport Investment Boosts Tourist Arrivals Total Arrivals (000). National Statistics buildings to cope with the greater demand expected in the years ahead.000 0. It is planned to be open by the end of 2013. It has an area of 20. The BGN70mn terminal at Burgas will have 31 check-in desks and capacity for 2. In total.015 10.000 2012 2013 2014 2015 2016 2017 0 Airports infrastructure industry value.01 9. Varna Airport served a total of 1. Fraport is investing more than BGN170mn in improving facilities at both airports.000 0. are owned and operated by German company Fraport. BMI believes the investment in improving airport infrastructure across Bulgaria will be very positive for the country's tourism industry.cover 68. and from Sandanski to the border crossing with Greece at Kulata. Airport Infrastructure Industry Value (US$bn) 2012-2017 11. © Business Monitor International Page 28 . The three sections lots 1. Both airports are building new terminal Notes: BMI. entailing tunnels bypassing the Kresna gorge 8. Work is also due to include preparation for the construction of the Blagoevgrad-Sandanski section (lot 3). The BGN75mn (US$51mn) facility opened in august 2013 and will serve as a gateway to the Black Sea region of Bulgaria.48mn) in financial assistance from the European Commission (EC). '000 (LHS) Bulgaria's two other main airports. The new terminal at Varga will be able to handle 1.7mn passengers.2mn passengers in 2012.8mn passengers.005 Blagoevgrad.000 square metres and is approximately three times the size of the previous terminal.5km and are scheduled to be completed by end-2015.000 0.

two travel agencies. possessing over 34 hotels (catering to a broad range of tourists. Earnings per share fell to BGL 0. a car rental company. Company Details ■ ■ Albena 33 St Ivan Rilski Street. One of the largest Bulgarian holding companies with a sizeable real estate branch amongst other subsidiaries. a casino. For the period.7% to BGL 791. The firm also has over 100 catering establishments and other leisure facilities. a medical centre and a spa centre. a nature reserve and hills.500 beds. The group is a subsidiary of Albena Invest Holding AD Balchik. Sofia Sofia 100 Bulgaria ■ + 359 2 953 2599 ■ + 359 2 953 2926 © Business Monitor International Page 29 . the former state-owned company was privatised as a single entity. Key to its operations is the Albena Holiday resort. and ranging from 1* to 5*) and just over 12. Consolidated sales revenue totalled BGL 2. surrounded by a large beach. which form the majority of its source market. down from BGL 3.30 a year ago.14 through June from BGL 0.000 compared to the same period a year ago. Strategy We believe that the hotel group is likely to continue to target German and Russian tourists.6 million. and represent the strongest growth potential. which is located in the north of the Bulgarian Black Sea coast.7 million a year earlier. recent newspaper announcements concerning Albena as one of the most expensive resort destinations with some of the most expensive steeply rising hotel prices in the country could deter some visitors in the future. Financial Data Financial Highlights Albena Invest Holding AD reported consolidated earnings results for the half ended June 2013.Bulgaria Tourism Report 2014 Company Profile Albena Company Overview Albena is a major player in Bulgaria's hotel and hospitality industry. consolidated profit fell 52. Despite its divergent business interests. However.

the global hospitality sector will directly prosper from rising occupancy rates and growing numbers of new hotels. and all of these travellers will need accommodation.54mn internationally. emerging markets have seen inbound and domestic tourists rise faster than elsewhere.82bn and the number of hotels grows to 2.000 higher than current levels. © Business Monitor International Page 30 . Our outlook for the next five years through to 2017 is of advancing international tourist levels. we believe that this will have beneficial effects on the hospitality sector.29bn in 2017. In the past five years. rather than Europe and North America. We predict that global occupancy rates. overnight stays and the number of new hotels will rise over the next five years. Latin America and Middle East have witnessed ongoing investment into real estate for new hotel development. changes in consumer preferences have resulted in tourists staying abroad for longer.9% per year.29bn. In addition. In terms of specifics. growing by an average 4. Below we outline some of our key views based upon our set of global accommodation indicators. and ever more are travelling to Asia and Latin America. key emerging market regions such as Asia. This is 224. In 2017.Bulgaria Tourism Report 2014 Global Industry Overview BMI View:With global tourist arrivals projected to reach 1. This will bring the number of tourists at the end of 2017 to 1. These factors will continue to contribute going forward to 2017 and ensure emerging market outperformance. overnight stays advances to 2. occupancy rates is set to reach 57%. Also. We believe that emerging markets will outperform developed regions in this regard.

and looking towards 2014. globally. where holidaymakers are now staying longer than before. © Business Monitor International Page 31 .54bn nights. We expect this trend to continue.23 in 2000 to over 5. with the number of nights has more than doubled. overnight stays is forecasted to increase by 3.000 500. Similarly this is reflected in average length of stay (nights) which have grown from 4.Bulgaria Tourism Report 2014 Rising Demand For Accommodation Regional: GDP per capita US$ & 10.000 2017 2016 2015 2014 2013 2012 2011 0 2010 0 Asia-Pacific: GDP per capita US$ (LHS) Middle East: GDP per capita US$ (LHS) Latin America: GDP per capita US$ (LHS) Asia-Pacific: Total overnight stays '000 (RHS) Middle East: Total overnight stays '000 (RHS) Latin America: Total overnight stays '000 (RHS) Source: National Sources/BMI Calculation/BMI Forecast Total Overnight Stays and Average Length of Stay Overnight stays have grown strongly over the last decade. This highlights a growing consumer pattern.66% to over 2.44 in 2013.

44 5. remaining within a range of 53-57%.7 2.50 1.5 2.36 14.10 0. 2000-2017 five years to 2017.828. Occupancy Rates Over the past decade and before. Asia and Latin America will perform the best. New York.9 2.33 3. nights 5.42 5. occupations will remain to post destinations such as Hong Kong. Rising incomes within each of these regions has given consumers greater disposable income for travelling. 2010-2017 2010 Total overnight stays.054.542. The success of these regions is attributed to their growing intercontinental and domestic demand for tourism. Europe has suffered with weak macroeconomic fundamentals has seen local demand for hotel rooms fall.6 2.352.47 -1. However.76 3. We believe that over the next Occupancy rates. occupancy rates will trend towards the higher limit of this range. Source: National Sources/BMI Calculation/BMI Forecast Regionally.44 5. % chg y-o-y Source: National Sources/BMI Regionally.2% respectively between 2013 and 2017.1 2.452. nights. Globally.6% and 2.71 3. 40 This is likely to directly translate into more room occupations with higher rates seen in the most popular city destinations within a country.1 2. Elsewhere eastern .90 2.45 0.397.10 0.46 5. mn. Middle East.09 Average length of stay. where overnight stays will grow see average year-on-year growth rates of 6. mn 2011 2012 2013e 2014f 2015f 2016f 2017f 2.36 Average length of stay.Bulgaria Tourism Report 2014 Table: Global overnight stays and average length of stay.637. Singapore and Tokyo are forecasted to keep growing occupancy rates over 60% going through to 2017.31 -0. % chg y-o-y 7. and ever growing increases © Business Monitor International Page 32 2017 2015 2016 2014 2013 2012 2010 2011 2009 2008 2007 2006 2004 2005 2003 2002 2001 2000 0 occupation rates between 60-70%. global occupancy Steady Room Occupations rates have not seen much volatility.46 5.736.43 5.28 0. and Paris.2 Total overnight stays.28 0.7%.06 0. 20 western city destinations such as London. Higher global 60 occupancy rates will increase due to a higher number of tourist inflows forecasted over the same period.45 5. 3.2 2.66 3. increases in foreign tourists from neighbouring countries.

reported that RevPar had fallen by 8.65 4.30 2.711 38.96 3. Our projection is that European occupancy rates will remain subdued and will see near to flat growth through to 2017.419 37. mn 1.6% to $72.42 2. occupancy rates have thrived. Table: Hotel Indicators. This represents an increase of over 400. local industry sources within the Middle East. forecasted occupancy rate rises in Middle East. In 2014.95 4.89 1. higher occupancy rates don't necessarily mean higher RevPar (revenue per available room). Globally. Within Middle East and Asia.78 4. the largest growth seen in the last three years.36 3.37. has meant occupancy rates have not faltered drastically as would be originally expected.40 Hotel rooms. occupancy rates fell by only 0. the number of hotel rooms will also expand to over 38mn in 2017.41 2.02 2.000 new hotels to be built over the next five years. '000 Hotel rooms.993 3.54 Number of hotels and establishments. Another key reason is that the introduction of new hotels to be rolled out over the next few years will counteract any inbound flow of arrivals to leave occupancy rates balanced. we forecast this to continue.50 4.223 32. with rates in some parts of the region continuing to rise over 60%. Hotel Establishments and Hotel Rooms Internationally.760 32. We also expect background political uncertainty in parts of this region to cause occupancy rates over the coming year to volatile.54mn in 2017. % chg y-o-y 7.94 2.52 3.92 3. 2010-2017 2010 2011 2012 2013e 2014f 2015f 2016f 2017f Number of hotels and establishments. '000. Be that as it may. % chg y-o-y Source: National Sources/BMI Calculation/BMI Forecast © Business Monitor International Page 33 .810 35.19 2. In 2013.17 30.660 33.10 2. In correlation.55 3. Overall global occupancy rates are projected to rise steadily through to 2017. With our bullish view on rising number tourists predicted over the next five years. we forecast that number of hotels will increase to 2.65 3.Bulgaria Tourism Report 2014 in the inflow of Asian tourists. and this remains a crucial risk to our outlook. As recently as mid-2013. with occupancy rates predicted to be 65% for Asia and 53% for Middle East in 2017.89 5.03 4. mn.2 percentage points to 48%. the number of hotels rose by 4% in 2013.135 36.76 1. Asia and Latin America will offset weaker growth in Europe and the rest of the world. Any increase in political instability will directly affect hotel occupancy rates.

Competitor chains such as Hyatt Hotels and Wyndham Worldwide are also following suit with plans to open similar mid-tier priced hotels in the same regions. © Business Monitor International Page 34 . Vietnam and Indonesia.Bulgaria Tourism Report 2014 Although hotel numbers are forecasted to rise in all regions. Special plans are focussed at opening mid to high-tier priced hotels in Asia. India. Latina America and Middle East. Recently. confirmed plans to invest US$2bn in opening hotels across all international regions. aims to capture the growing domestic demand for tourism. Marriott International Inc. in such countries as China. significant new additions will appear in Asia.

We continue to forecast a stronger global economy in 2014 than in 2013.6%. We have revised up our forecast Chinese growth modestly for 2013 to 7. ranging from renewed rancour in Washington to a collapse in Chinese growth. While there remain significant headline risks in 2014. our macroeconomic outlook has not changed. with our global real GDP growth estimate rising to 3.1% from 2. © Business Monitor International Page 35 . respectively. but we maintain our downbeat forecast for 2014 of 6. Global indicators of economic activity are pointing up after several poor quarters.5% previously. and the German federal election.Bulgaria Tourism Report 2014 Global Assumptions Despite significant headline risk in September and October 2013. the euro area is showing signs of tentative recovery. we continue to see signs that global growth is picking up. and importantly. owing to a surge in credit growth having modestly positive effects. including the Federal Reserve's decision not to taper its quantitative easing policy.7% as we continue to believe that elements of the economy are exhibiting signs of a bubble. the US federal government shutdown and debt limit crisis.6% from 7.

00 Real GDP Growth (%) USA Eurozone Consumer Inflation (avg) Interest Rates (Eop) Exchange Rates (avg) Oil Prices (avg) Source: BMI © Business Monitor International Page 36 .00 1.7 2.00 98.25 6.10 0.25 6.2 3.4 3.75 US$/EUR 1.50 0.00 102.60 98.8 2.31 6.Bulgaria Tourism Report 2014 Table: Global Assumptions 2012 2013f 2014f 2015f 2016f 2017f 2018f 2.1 1.9 2.3 3.75 100.8 1.9 1.0 0.7 World 3.50 102.9 1.8 5.63 103.8 2.23 1.8 1.4 -0.10 0.75 2.7 China 2.8 2.00 99.0 1.00 97.03 101.75 1.50 ECB Refinancing Rate 0.00 101.3 3.6 2.5 1.50 100.50 105.3 3.1 2.50 0.7 2.5 USA 2.00 Japan Overnight Call Rate 0.3 1.3 1.0 1.00 3.70 107.00 99.2 3.85 98.6 -0.7 2.27 1.8 1.10 0.16 6.50 2.00 0.3 0.0 5.2 Fed Funds Rate 0.8 5.00 Brent Crude (US$/bbl) 111.1 2.8 Japan 0.9 2.1 Eurozone 2.5 1.22 6.7 1.8 World 2.20 1.00 0.1 0.25 OPEC Basket (US$/bbl) 109.20 JPY/US$ 79.1 2.4 2.1 2.3 1.0 China 7.8 1.23 6.50 0.7 7.75 0.5 1.00 99.1 3.27 1.7 1.8 2.9 1.5 Japan 1.33 1.3 1.1 3.2 3.7 6.00 0.4 2.8 2.00 3.6 6.00 97.4 3.9 1.3 2.20 1.7 2.6 3.10 0.25 0.00 CNY/US$ 6.00 96.

oil prices have gradually eased in recent weeks. the psychological impact is significant.8/bbl in 2014. © Business Monitor International Page 37 . which we expect will act as resistance to higher prices and hence we forecast average Brent prices will fall to US$102. the delay in implementing a long-term increase in the US federal debt limit to early 2014 increases the possibility that the US Federal Reserve will delay tapering its current asset purchasing programme (QE3) until well into 2014. namely a reduced risk premium from the Middle East in the context of rising global supplies.Bulgaria Tourism Report 2014 We are holding off on altering our real GDP forecasts for the US until there is greater clarity on the damage done to the economy from the federal government shutdown in October (though we believe the impact will be fairly minor). We expect prices to continue trading below previous highs in line with a reduction in geopolitical tensions and we now forecast Brent to average US$105 per barrel (/bbl) for Q413 and average at US$107. That said. as well as a relatively robust supply picture and lacklustre demand story despite a number of unplanned outages seen over recent months. This is a downward revision from our previous forecast of US$111/bbl.6/bbl for the year. With the risk of outside of military intervention in the Middle East on the wane. and the Fed may delay making any changes to current policy until there is greater certainty on the fiscal front. We are currently pricing in a continuation of these trends. While we believe the direct impact of the US$85bn monthly purchases is quite small. and reflects cautious optimism regarding international efforts over Syria and Iran.

% chg y-o-y 2012e 2013f 2014f 2015f World 2.39 1.50 Russia RUB/US$.12 2.4 4.7 4.1 Emerging Markets 5.8 6.2 2.95 2.60 98.33 1.51 33.8 2.8 Asia Ex-Japan 6.26 Source: BMI © Business Monitor International Page 38 .50 Turkey TRY/US$.100.126.27 1.1 3.00 55.65 12.7 3.00 1.06 United Kingdom US$/GBP.9 Latin America 2.16 2.14 Brazil BRL/US$.5 Emerging Europe 2. ave 8.7 2.6 3.Saharan Africa 4. ave 79.00 97.06 31.59 1.0 4.3 Sub .39 10.1 3.00 32.8 4.115. ave 6.61 2012e 2013f 2014f 2015f Table: Emerging Market Exchange Rates China CNY/US$.5 5.5 1.59 1.00 India INR/US$. ave 1.8 3.03 1. ave 53.07 1.1 4.3 5.3 5.93 2.31 6.7 Middle East & North Africa 5.85 12.Bulgaria Tourism Report 2014 Table: Global And Regional Real GDP Growth. ave 13. ave 1.3 5.15 12.21 9.22 6.00 1. ave 1. ave 0.8 3.050.15 9. ave 1. ave 1.23 South Korea KRW/US$.94 1.16 6.30 2.42 56.16 South Africa ZAR/US$.23 Japan JPY/US$.55 1.27 1.80 1.38 Mexico MXN/US$.3 Developed States 1.00 Switzerland CHF/US$.0 2. ave 31.4 2012e 2013f 2014f 2015f Table: Developed Market Exchange Rates Eurozone US$/EUR.9 6.00 54.85 98.2 2.9 2.

5% for 2013 and 1.0 2. from 0. We have revised up our Finland growth estimates for 2013.2 1. Real GDP Growth Forecasts 2012e 2013f 2014f 2015f Developed States Aggregate Growth 1.8% previously .5 1. from 0.3 0.3 2. We have revised up our full-year forecast for this year (to 1.8% from 1.7 2.3 2. Having effectively flatlined over the course of Q411-Q412.7 1.0% for 2014.7 2.3 Selected Developed States Czech Republic © Business Monitor International Page 39 .2 1.but we maintain our above-consensus projection of 2.2%.1pp to 1.0% in 2014 and 2. we have made some adjustments to projections for member states.6% previously.0 Eurozone -0.0 1. from a previous forecast of 1.4%). which we have scaled back from 1.1 G7 1.8% previously.3 2.3% growth forecast for that year.9 Canada 1.1% in 2015. we have nudged down our full-year 2013 forecast for Belgium to a modest 0.In light of the weak data from the first half of the year.7 1. Although our eurozone real GDP growth forecasts remain steady at -0.8 2.1% in 2014.5 Austria 0. and forecast growth to accelerate to 1.5 1.9 Belgium -0. Our view that growth will accelerate in 2014 underpins our more bullish 1.5 1. disappointing Q213 growth has prompted us to revise down our forecasts for real GDP growth to 0.5% from 1.6% in 2014.3 0.4% previously.1 2.6 Australia 3.8 0. but our forecasts remain at 2.2 2.3 1. from 0.2%.Bulgaria Tourism Report 2014 Developed States Our developed states real GDP growth estimate for 2013 is up by 0.0 1. the UK economy has suddenly burst into life in recent months.7 1.1%) and in 2014 (to 1.3% expansion.3 EU-27 -0. while still cautioning that the recovery remains vulnerable. fuelling speculation that the long awaited recovery could finally be taking root. and now expect real GDP to contract by 0. In Ireland.4 0. Table: Developed States.3 1.2%.6 -0.0 1.5 -1.6% in 2013.

7 0.4 3.1% in 2014.5 0.1% and 1.7 2. Real GDP Growth Forecasts .2 2.1 3.7 Taiwan 1.4 Portugal -4.1% respectively from -0.3 2. 1.9 Switzerland 1.0 -0. with projected growth of 4.1 2.8 1. We have made few changes to our growth forecasts in emerging countries since our last update.9% from 1.2 3.7 2.0 1.0 France 0.3 1.0 1.4 2.5 0.0 4.1 1.7% in 2013 and 3.6 Italy Japan Netherlands Spain Source: BMI Emerging Markets Our emerging markets aggregate forecasts are unchanged.2 United States of America 2.9 1.0 3.0 0.7 0. we raised our Argentine 2013 real GDP growth forecast to 2.3 0.6 1.1 0.Bulgaria Tourism Report 2014 Developed States.2 0.5 0.Continued 2012e 2013f 2014f 2015f Denmark -0.9% previously.2 South Korea 2.8 1.8 -0.3 2.1 2.8 2.2 3. In Latin America. respectively.8 2.2 1.4 0.7% and 2. In emerging Europe.7 1.5 2.0 1.8% in both 2014 and 2015 signalling a modest improvement in activity in the emerging world.6%.9 2.3%.8% following stronger-than-expected data in H113.1 -1.5% from 2.2 0.4 1. but have slightly downgraded our 2014 projection to 2.0 4.8% in 2013 and 2014.9 Singapore 1.7 1.1%. 1.7% in 2013 and 4.5 Norway 3.1 1. we have revised up our forecast for Hungarian real GDP growth in 2013.3 -2.5 1.4 -1.2% and 2.1 -1.6 Finland -0. Our regional growth forecasts are 2.9 Sweden 0.6 2.1 United Kingdom 0.3 -1.6 Hong Kong 1.9 1. 2014 and 2015 to 0.7 -3.4 1.5 1.1 2. © Business Monitor International Page 40 .7 Ireland 0.1 3. for which we are forecasting growth of 2.8 2.9 Germany 0.1 -0.

0 India* 5.0 Nigeria 6.5 Argentina 1.3% in 2013 rising to 5.2 Indonesia 6.6 6.5% in 2014.3 UAE 6.8% in 2013.9 2.5 3.0 5.6 4. We project growth in the Middle East and North Africa of 3.4% in 2013.5 3.2 2.1 3.9 6.5 3.9 2.7 Middle East 3.0 5.6 4.7 South Africa 2.4 4.9 2.2 7.9 2.1 Mexico 3.9 China 7.5 4.1 3.3 3.4 3. Real GDP Growth Forecasts 2012e 2013f 2014f 2015f Emerging Markets Aggregate Growth 5.6 6.2 Emerging Asia 6.6 Africa 4.8 3.3 5.2 1.7 4.8 6.7 2.2 4.5 2.0 2.0% in 2014.3 3. improving to 4.4 4.9 6. with growth of 5. Table: Emerging Markets. And Sub-Saharan Africa will maintain its status as the fastest-growing region outside of Asia.6 6.8 2.3 © Business Monitor International Page 41 .8 5.8 6.6 Egypt 2.5 3.0 5.8 2.7 7.4 4.7 6.5 4.4 6.0 4.3 5.1 2.3% in 2014.4 7.8 Latin America 2.1 Brazil 0.8 4.1 3.4 Emerging Europe 2.Bulgaria Tourism Report 2014 Emerging Asia is forecast to grow by 6.1 4. slowing to 6.3 5.7 3.2 Philippines 6.2 5.3 Saudi Arabia 5.5 5.5 Malaysia 5.1 4.4 Thailand 6.6 4.5 3.

0 7.2 Turkey 2.7 1. Bloomberg © Business Monitor International Page 42 .8 5.7 BMI 1.8 3.5 2.6 2. and the eurozone (compared with the Bloomberg survey of analysts) in 2013.5 1.2 2.9 2.1 3.3 2.9 Romania 0.6 5.3 7.Continued 2012e 2013f 2014f 2015f Russia 3.4 2.7 2.2 2. Japan.0 2.7 0. we highlight that we are well below consensus for Chinese growth (at 6.4 5.8 7.4 Source: BMI.0 1.8 1.4 Hungary -1. Real GDP Growth Forecasts .3 1.7% versus 7.6 -0. Looking forward to 2014.3 5. Table: BMI Versus Bloomberg Consensus Real GDP Growth Forecasts (%) 2013 2014 US Eurozone Japan Brazil China Russia India Bloomberg Consensus 1.1 1.8 3.6 Poland 2.8 -0.8 *Fiscal years ending March 31 (2013=2012/13) Source: BMI BMI is at or below consensus on growth for Russia.8 2.3 2.5 3.0 1.4%).5 2.8 Bloomberg Consensus 2.5 3.4 2.4 BMI 2.0 1.7 2.7 1.Bulgaria Tourism Report 2014 Emerging Markets. Brazil.5 6.

the change in the structure of the population between 2013 and 2050 and the total population between 1990 and 2050. Population Pyramid 2013 (LHS) And 2013 Versus 2050 (RHS) Source: World Bank. as well as life expectancy. The tables show key datapoints from all of these charts. BMI © Business Monitor International Page 43 . but an understanding of the demographic profile is key to understanding issues ranging from future population trends to productivity growth and government spending requirements. in addition to important metrics including the dependency ratio and the urban/rural split. UN. The accompanying charts detail Bulgaria's population pyramid for 2013. Not only is the total population of a country a key variable in consumer demand.Bulgaria Tourism Report 2014 Demographic Forecast Demographic Outlook Demographic analysis is a key pillar of BMI's macroeconomic and industry forecasting model.

BMI Table: Bulgaria's Population By Age Group.827 0-4 years 557 419 330 318 340 343 340 320 5-9 years 585 521 407 331 319 331 339 338 10-14 years 650 556 517 401 325 314 318 337 15-19 years 641 614 544 502 386 337 319 312 20-24 years 588 595 589 536 493 424 375 308 25-29 years 583 553 572 554 501 496 482 365 30-34 years 609 549 538 550 532 506 492 473 35-39 years 630 573 536 535 547 537 524 484 40-44 years 646 593 558 516 515 531 538 515 45-49 years 535 611 573 536 495 496 504 527 50-54 years 523 503 586 558 523 493 479 488 55-59 years 573 485 476 555 530 511 498 456 60-64 years 541 523 447 454 528 513 493 464 65-69 years 484 474 463 408 416 457 476 446 70-74 years 245 395 391 391 349 345 355 409 Total © Business Monitor International Page 44 .Bulgaria Tourism Report 2014 Population Indicators Population (mn. 1990-2050 Source: World Bank.389 7.683 7.223 7.821 8. UN.113 6.358 8.001 7. 1990-2020 ('000) 1990 1995 2000 2005 2010 2013e 2015f 2020f 8. LHS) And Life Expectancy (years. RHS).

93 35-39 years 7.70 6.32 7.37 6.14 6.32 4.78 6.59 5.20 7.68 60-64 years 6.13 0.73 4.93 6.70 2.05 3.13 3.34 2.31 5.78 5.80 65-69 years 5.05 80-84 years 1.97 6.87 6.12 7.39 4.67 4. Source: World Bank.20 0.22 0.46 5.66 2.89 3.55 45-49 years 6.26 1.31 0.76 4.97 6.49 5.27 4.16 7.35 4.78 4.65 6.72 6.48 4.03 0.94 15-19 years 7.04 0.02 0.61 6.27 7.68 5-9 years 6.61 4.14 6.58 85-89 years 0.08 7.04 0.92 6.23 5.71 50-54 years 5.28 1.66 7.95 7.77 5.41 90-94 years 0.09 4.14 55-59 years 6.07 7.80 4.70 6.88 5. UN.73 7.09 40-44 years 7.22 4.96 7.34 6.21 6.81 5.00 75-79 years 2. BMI Table: Bulgaria's Population By Age Group. 1990-2020 ('000) .75 4.39 0.56 20-24 years 6.10 6.08 6.87 5.91 7.60 3.70 0.54 2.45 95-99 years 0.95 10-14 years 7.11 6.55 0.77 4.62 7.08 © Business Monitor International Page 45 .36 6.57 6.30 4.32 7.00 6.51 1.15 7.36 7.91 6.26 7.40 7. 1990-2020 (% of total) 1990 1995 2000 2005 2010 2013e 2015f 2020f 0-4 years 6.16 6.43 7.00 6.33 2.75 0.69 6.02 0.34 30-34 years 6.02 7.31 7.02 0.86 7.23 7.50 5.15 1.53 5.70 1.12 4.Continued 1990 1995 2000 2005 2010 2013e 2015f 2020f 75-79 years 236 178 288 292 299 281 269 277 80-84 years 133 142 107 179 187 192 192 176 85-89 years 49 59 60 48 85 91 91 96 90-94 years 12 14 15 17 15 22 28 31 95-99 years 2 2 2 2 3 3 3 5 100+ years 0 0 0 0 0 0 0 0 e/f = BMI estimate/forecast.68 5.78 5.Bulgaria Tourism Report 2014 Bulgaria's Population By Age Group.09 4.17 0.56 7.04 0.92 6.63 6.82 6.08 7.22 4.26 5.97 7.46 4.19 0.63 1.15 7.97 6.73 4.58 4.64 6.00 6.68 2.78 4.85 6.73 7.67 5.53 70-74 years 2.81 6.31 5.01 4.17 7.33 6.36 7.51 25-29 years 6.14 4.

6 32.528 e/f = BMI estimate/forecast.6 45.327 1.5 25.844 4.161 1.295 5. % of total working age 19.7 68.8 24. UN. total.693 2.440 Dependent ratio.756 1.864 1.966 2.581 2.359 5.8 28.665 5.7 1. total.6 24.1 66. BMI © Business Monitor International Page 46 .2 22.3 55. total.300 Rural population.3 49.1 51.00 0.855 5.495 1.392 30.8 27.5 25.8 22.420 5.488 2. UN.1 64.953 2.291 2. % of total working age Dependent population. 1990-2020 (% of total) .388 2.7 22.391 1.00 0.0 67.00 0.6 Rural population.2 75. '000 5.254 1.4 21. UN.410 2.3 Active population.050 984 988 996 995 Pensionable population.8 68. total. Source: World Bank.00 0. % of total 66.359 5.702 4.600 5.8 Pensionable population.2 72.512 5.392 5.5 2.1 32.9 68.00 0. '000 Youth population. % of total 66. total. % of total 33. '000 5.5 20.3 47.263 1.7 30.2 31.4 67. BMI Table: Bulgaria's Rural And Urban Population.1 29.3 49.792 1. 1990-2020 1990 1995 2000 2005 2010 2013e 2015f 2020f 50.Continued 100+ years 1990 1995 2000 2005 2010 2013e 2015f 2020f 0. Source: World Bank.00 0.00 e/f = BMI estimate/forecast.5 67.3 77. BMI Table: Bulgaria's Key Population Ratios.759 2.868 5.357 5.3 67.050 4.414 1.9 70.Bulgaria Tourism Report 2014 Bulgaria's Population By Age Group. 1990-2020 1990 1995 2000 2005 2010 2013e 2015f 2020f Urban population.1 19. '000 e/f = BMI estimate/forecast.379 2.7 23.00 0.338 1.3 26. Source: World Bank.030 1.5 74. '000 2.339 2.8 19.1 46. total.355 1.435 Active population. '000 1. % of total working age Youth population.4 Urban population.5 26.

is the use of vector autoregressions. Such single-variable analysis is called univariate modelling. Effective forecasting depends on appropriately selected regression models. BMI mainly uses a linear model. dummy variables are used to determine the level of impact. The precise model we use varies from industry to industry. adjusted R2 takes degree of freedom into account ■ Testing the directional movement and magnitude of coefficients ■ Hypothesis testing to ensure coefficients are significant (normally t-test and/or P-value) ■ All results are assessed to alleviate issues related to auto-correlation and multi-collinearity © Business Monitor International Page 47 . such as poor weather conditions impeding agricultural output. Common to our analysis of every industry. using a variable's own history is often the most desirable method of analysis. For example. such as the log-linear model. by the prevailing features of the industry being examined. In some cases. Vector autoregressions allow us to forecast a variable using more than the variable's own history as explanatory information.Bulgaria Tourism Report 2014 Methodology Industry Forecast Methodology BMI's industry forecasts are generated using the best-practice techniques of time-series modelling and causal/econometric modelling. we use either traditional decomposition methods or smoothing methods as a basis for analysis and forecasting. ARMA techniques are inappropriate because there is insufficient historic data or data quality is poor. supply and capacity. BMI uses a 'general-to-specific' method. but simple nonlinear models. BMI selects the best model according to various different criteria and tests. We use the most common and versatile form of univariate models: the autoregressive moving average model (ARMA). During periods of 'industry shock'. including but not exclusive to: ■ R2 tests explanatory power. as per standard practice. however. are used when necessary. we can include information about oil consumption. When forecasting some of our industry sub-component variables. BMI mainly uses OLS estimators. In each case this is determined. In such cases. when forecasting oil prices. In order to avoid relying on subjective views and encourage the use of objective views.

industry trends and expenditure levels stated in international and national press. Where these are unavailable. This is further broken down into two sub categories: ■ Market Rewards (this is an industry-specific category that takes into account current industry size and growth forecasts. government/ministry sources and official data. ■ Likely alterations in expenditure patterns owing to economic/political activity. ■ Industry trends and expenditure levels stated in tourism companies' official financial reports or releases. tourism forecasts are based on a range of variables: ■ Government policy. turning points and seasonal features. on industry associations/operators. and the score factors in favourable political and economic conditions for the industry) © Business Monitor International Page 48 . Sector-Specific Methodology A number of principal criteria drive our forecasts for each tourism sector variable. Figures for the tourism sector data are based. where possible. expertise and knowledge of industry data and trends ensure that analysts spot structural breaks. Risk/Reward Rating Methodology BMI's Risk/Reward Ratings (RRR) provide a comparative regional ranking system evaluating the ease of doing business. Experience. anomalous data. It must be remembered that human intervention plays a necessary and desirable role in all of BMI's industry forecasting. to provide an overall score for potential returns for investors) • Country Rewards (this is a country-specific category. and the industry-specific opportunities and limitations for potential investors in a given market. and also broader industry/state characteristics that may inhibit its development. and the openness of a market to new entrants and foreign investors.Bulgaria Tourism Report 2014 BMI uses the selected best model to perform forecasting. while a purely mechanical forecasting process would not. The RRR system divides into two distinct areas: Rewards: Evaluation of sector's size and growth potential in each state. ■ Likely expenditure and growth patterns owing to international developments and demographic patterns.

our ratings are revised on a quarterly basis. For each category and subcategory. or market and country rewards. the system offers an industry-leading. This is further broken down into two sub categories: ■ Market Risks (this is an industry-specific category whose score covers potential operational risks to investors.Bulgaria Tourism Report 2014 Risks: Evaluation of industry-specific dangers and those emanating from the state's political/economic profile that call into question the likelihood of anticipated returns being realised over the assessed time period. we attempt. unfavourable legislation and a poor overall business environment are evaluated to provide an overall score). © Business Monitor International Page 49 . regulatory issues inhibiting the industry. We take a weighted average. a country is scored out of 100 (100 being the best). we identify factors (in terms of current industry/country trends and forecast industry/country growth) that represent opportunities to would-be investors. as most of the countries and territories evaluated are considered by BMI to be 'emerging markets'. Almost all indicators are objectively based. and the expertise of our analysts. comparative insight into the opportunities/risks for companies across the globe. ■ Second. with the overall Risk/Reward Rating a weighted average of the total score. ■ Finally. where possible. to identify objective indicators that may serve as proxies for issues/ trends to avoid subjectivity. which is used to create our regional ranking system for the risks and rewards of involvement in a specific industry in a particular country. These two results in turn provide an overall Risk/Reward Rating. we identify country and industry-specific traits that pose or could pose operational risks to would-be investors. and the relative maturity of a market) • Country Risks (this is a country-specific category in which political and economic instability. ■ Third. Sector-Specific Methodology In constructing these ratings. combining market and country risks. Overall. we use BMI's proprietary Country Risk Ratings (CRR) in a nuanced manner to ensure that only the aspects most relevant to the infrastructure industry are incorporated. BMI's approach in assessing the Risk/Reward balance for industry investors globally is fourfold: ■ First. Importantly. the following indicators have been used. This ensures that they draw on the latest information and data across our broad range of sources.

<glocur> Arrivals growth.Bulgaria Tourism Report 2014 Table: Tourism Risk/Reward Ratings Indicators Rewards Industry Rewards Tourist Arrivals ('000) International tourism receipts per visitor. % Tourism Receipts growth. % Hotel occupancy. % Country Rewards Physical Infrastructure Labour Costs Risks Industry Risks Stability of Exposed Region Short-term Political Stability Country Risks Legal Framework Corruption Bureaucracy Market Openness Security Risk Source: BMI Weighting Given the number of indicators/datasets used. it would be inappropriate to give all subcomponents equal weight. the following weighting has been adopted: Table: Weighting Of Indicators Indicator Weighting (%) Rewards 70 of which Industry Rewards 60 of which Tourist Arrivals ('000) 20 © Business Monitor International Page 50 . Consequently.

% 20 Tourism Receipts growth.Bulgaria Tourism Report 2014 Weighting Of Indicators . <glocur> 20 Arrivals growth. % 20 Country Rewards 40 of which Physical Infrastructure 50 Labour Costs 50 Risks 30 of which Industry Risks 45 of which Stability of Exposed Region 50 Short-term Political Stability 50 Country Risks 55 of which Legal Framework 20 Corruption 20 Bureaucracy 20 Market Openness 20 Security Risk 20 Source: BMI © Business Monitor International Page 51 . % 20 Hotel occupancy.Continued Indicator Weighting (%) International tourism receipts per visitor.

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