Zaritsa Dinkova, Minister of Tourism, is quickly losing her rating in the sector she is in charge of. Lately, she managed to anger both hoteliers, restaurateurs and tour operators with her passivity in discussing and accepting changes in tax laws (especially VAT) affecting the industry. The latest criticisms against her come from the heart of the Rhodopes and are related to another painful topic – about advertising in tourism.
“In no case do we want to downplay significant events in other settlements such as the Plum Festival, pumpkin, cherry, and yogurt festivals, but we do not consider it normal that Velingrad is totally excluded from support and advertising at the national and international level.” , says a letter of the Association of Hoteliers and Restaurateurs in Velingrad and the Western Rhodopes, addressed to Dinkova and quoted by the specialized website “Travelnews”.
It turns out that the Ministry of Tourism (MT) has completely excluded Velingrad from its “Calendar of tourism-oriented events” in 2024, on which it funds marketing and advertising activities.
The association points out that it is absurd that “the leader in the spa sector should not be supported by even 1 lev, even though it is a year-round national resort, has already attracted a lot of investment and has a huge potential for development due to its natural features”, while at the same time MT financed two wine events of the Tourism Council in Plovdiv.
The letter lists interesting and significant events held in the last year in Velingrad, such as the Spring Dance and Spring Dance festivals, a stage of the Tour de France International Cycling Race, the Velingrad 4×4 and Friends Off-Road Meeting and etc.
The main criticism of the regional association is that it is not at all clear by what criteria the ministry decides which events are worthy of the calendar.
The fact is that there is a complete fog surrounding the determination of the events, and the calendar for 2024 has not yet been published on the MT site.
With VAT on the neck
Minister Dinkova stayed away from the heated debates during the adoption of the tax laws, and it was not at all understood what the position of the Ministry of Finance was on the upcoming VAT increase from 9% to 20%, which stirred up the entire sector.
Despite the passivity of the line minister, the restaurateurs managed to activate their parliamentary lobby and for them the tax will remain at 9% until December 31, 2024. But for tourist packages, the rate will be increased to 20% already in the middle of next year. This unleashed an avalanche of discontent in the industry. Representatives of tourist unions and companies explain to Travelnews why they are angry:
“Minister Dinkova was not in Bulgaria during the VAT vote and hid when she had to defend the industry in front of Asen Vassilev and the deputies. At that time she was warm in Dubai and visiting the Bulgarian schools there,” commented the famous climatologist Prof. Georgi Rachev, who is the vice-chairman of the Bulgarian Association of Travel Agencies (BATA) and the owner of the tour operator “Geographic World”.
“She should have been here at the negotiating table and standing up for business. Her absence was an act of indolence and abdication. With the increase in VAT, tourist packages will become more expensive, which will lead to an outflow of trips by Bulgarians and foreign tourists to Bulgaria. The state will not collect more revenue, and some companies will go into the gray sector, Prof. Rachev warned about the risks.
The AIA association, which includes the representatives of the major foreign tour operators in our country, also reacts sharply to the upcoming VAT increase in mid-2024. In a position to the government and the parliament, it warns that Bulgaria is the only one among its competitors in Europe and North Africa , which has not yet recovered tourist flows to the levels of 2019, before the covid pandemic:
“It is specific to inbound tourism that the services included in the tourist packages (hotel, transport, meals, etc.) are negotiated early, already in May-September of the previous year. And since there were assurances that the VAT would not change , the calculations were made with 9% VAT. “Our foreign partners do not accept upward price adjustments,” the association states. They remind that in the countries that are Bulgaria’s direct competitors, they work with reduced VAT.
The chairman of the organization, Ivan Groshev, explains that important parameters such as tax rates cannot be changed at the last moment. “No foreign partner looks at such countries as possible strategic destinations. Some of the largest tourism companies in Europe have already sent criticism to the Council of Ministers because of this decision. A change from June 2024 will only create chaos in calculations with external partners. The direct our competing destinations operate with lower VAT rates”.
“Once again, business cannot plan because last-minute changes are a familiar practice, this is also one of the answers to the question of why foreign investors pass Bulgaria by,” sums up Ivan Groshev.
Works, works and works again
Minister Dinkova responds to all criticism with shopkeeper phrases and general stories. Here’s another round of sloganeering served up at a meeting of the National Tourism Board over the weekend:
“With real actions, we show readiness to work with all regions, municipalities and professional communities to solve long-standing problems in the sector. Tourism should not only be a showcase, but a business card of Bulgaria, for the qualities, advantages and opportunities of our country .”
“To achieve results, we need a clear vision, systematic and teamwork. We are working hard both to solve some pressing problems in the sector and on several medium-term policies to be as efficient and useful as possible for all stakeholders in this complex process.”
“We have to conquer people’s hearts with authenticity, culture, archeology, cuisine – this is the strength of Bulgarian tourism. We need to build on our national brands, but also work towards the creation of combined products.”
2023-12-18 22:37:39
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