Window of opportunity for international investors

The few international operators that are present in Ukraine are skimming the cream off the market. Only 2.5% of all hotels are managed by international operators: Rixos hotels runs a 5-star hotel in Truskavets (Western Ukraine), Radisson two 4-star houses in Kyiv and Alushta (Crimea) and Hyatt has opened a 5-star hotel in Kyiv. "These hotels achieve significantly higher occupancy rates although the room rates are more than twice the average. Skyrocketing prices of more than USD 500 for a single room in Kyiv are normal. High occupancy despite peak prices in hotels managed by international operators are an indicator of substantial demand from wealthy visitors," notes the consultant. International players such as IHG (Intercontinental, Crowne Plaza, Holiday Inn), Accor (Sofitel, Ibis, Novotel, Etap) and Hilton have already announced that they will enter the Ukrainian market – most of them with projects in Kyiv. However, about 85% of the announced projects will not be realized. The main reason is that most developers have only limited access to credit financing due to the global credit crunch. But many projects exist only on paper and have been announced to get fast-track access to land under the auspices of the EURO 2012 project. So for international investors, market entry is now attractive but also risky. On the one hand, demand for hotel rooms that meet international standards is high. On the other, the global economic crisis and the unknown future of EURO 2012 in Ukraine make market entry a real challenge. "These days, it is not easy to finance a hotel project. But a lot of Ukrainian hotels from the Soviet era are facing financial problems. They can be taken over at bargain prices. With extensive renovation, they can be raised to international levels and profitability. That is an attractive opportunity to enter an emerging market," concludes Andrienko-Bentz.

 

UNIT 9. UNWTO. MAIN TARGETS OF INTERNATIONAL TOURISM

Tourism boom started in the 1960s. In 1975 the United Nations established the World Tourism Organization (WTO, since 2003 - UNWTO) to promote tourism throughout the world.

The World Tourism Organization (UNWTO), based in Madrid, Spain, is a United Nations agency dealing with questions relating to tourism. It compiles the World Tourism rankings. The World Tourism Organization is a significant global body, concerned with the collection and collation of statistical information on international tourism. This organization represents public sector tourism bodies, from most countries in the world and the publication of its data makes possible comparisons of the flow and growth of tourism on a global scale. The official languages of UNWTO are Arabic, English, ‎French, Russian, and ‎Spanish. The World Tourism Organization plays a role in promoting the development of responsible, ‎sustainable and universally accessible tourism, paying particular attention to the ‎interests of developing countries‎.

The beginning of the XXI century is characterized as the era of globalization and integration. Tourism is global nowadays. According to the UNWTO tourism is the world’s largest industry. In 2002 the world’s total tourism receipts were 476 billion US dollars and number of tourists reached 715 million people. Nowadays about 927 million people work in the world’s tourist industry. The UNWTO prognosticates that by the year 2012 number of tourist all over the world will have reached 935 million people and the world’s total tourism receipts – 1550 billion US dollars.

The Organization encourages the implementation ‎of the Global Code of Ethics for Tourism, with a view to ensuring that member ‎countries, tourist destinations and businesses maximize the positive economic, ‎social and cultural effects of tourism and fully reap its benefits, while minimizing its ‎negative social and environmental impacts.

UNWTO is committed to the United Nations Millennium Development Goals, geared ‎toward reducing poverty and fostering sustainable development.

The international tourism is important not only for the development of national economies. It also contributes to:

1) a deeper knowledge of the life, culture and history of other countries;

2) the growth of the understanding among peoples;

3) the improvement of contacts and the broader use of leisure;

4) exchange of international achievements in various spheres of the tourism industry.

So, main targets to promote international tourism are:

1) encouraging the improvement of the tourism infrastructure and co-operation;

2) joining tourism projects;

3) encouraging the exchange of information, including relevant laws and regulations;

4) examining the possibilities of exchanging specialists and students in the field of tourism, with a view to improving their qualifications;

5) promoting conferences and symposiums on the planning and development of tourism;

6) studying the problems arising in areas where the development of tourism may injure or has injured the environment, art, historical or cultural heritage in the countries;

7) uniformity of hotel classification;

8) expanding links and co-operation in the field of sport (sports meetings and competitions of all sorts);

9) further developing contacts among governmental institutions and non-governmental organizations and associations, including meetings as well as trips of delegations, groups and individuals.

Now 154 countries and territories are members of the World Tourist Organization. In October 1997 Ukraine became the member of the WTO. It enhanced the prestige of our country in the world’s tourist community and created conditions for the further development of national tourism according to the tendencies of the world’s tourism market.

 

History

The origin of the World Tourism Organization stems back to 1925 when the International Congress of Official Tourist Traffic Associations (ICOTT) was formed at The Hague. Some articles from early volumes of the Annals of Tourism Research claim that the UNWTO originated from the International Union of Official Tourist Publicity Organizations (IUOTPO), although the UNWTO states that the ICOTT became the International Union of Official Tourist Publicity Organizations first in 1934.

Following the end of the Second World War and with international travel numbers increasing, the IUOTPO restructured itself into the International Union of Official Travel Organizations (IUOTO). A technical, non-governmental organization, the IUOTO was made up of a combination of national tourist organizations, industry and consumer groups. The goals and objectives of the IUOTO were to not only promote tourism in general but also to extract the best out of tourism as an international trade component and as an economic development strategy for developing nations.

Towards the end of the 1960s, the IUOTO realized the need for further transformation to enhance its role on an international level. The 20th IUOTO general assembly in Tokyo, 1967, declared the need for the creation of an intergovernmental body with the necessary abilities to function on an international level in cooperation with other international agencies, in particular the United Nations. Throughout the existence of the IUOTO, close ties had been established between the organization and the United Nations (UN) and initial suggestions had the IUOTO becoming part of the UN. However, following the circulation of a draft convention, consensus held that any resultant intergovernmental organization should be closely linked to the UN but preserve its "complete administrative and financial autonomy".

It was on the recommendations of the UN that the formation of the new intergovernmental tourism organization was based. Resolution 2529 of the XXIVth UN general assembly stated: [The general assembly] believes that a formula that would allow agreement to be reached more readily among governments for the establishment of an international tourism organization of an intergovernmental, particularly to assist the developing countries would be: (a) The conversion of the International Union of Official Travel Organizations into an intergovernmental organization through a revision of its statutes: (b) The establishment of operational links between the United Nations and the transformed Union by means of a formal agreement.

In 1970, the IUOTO general assembly voted in favor of forming the World Tourism Organization (WTO), based on statutes of the IUOTO, and after ratification by the prescribed 51 states, the WTO came into operation on November 1, 1974.

Most recently, at the fifteenth general assembly in 2003, the WTO general council and the UN agreed to establish the WTO as a specialized agency of the UN. The significance of this collaboration, WTO Secretary-General Mr. Francesco Frangialli claimed, would lie in "the increased visibility it gives the WTO, and the recognition that will be accorded to [it].Tourism will be considered on an equal footing with other major activities of human society".

Members

As of 2010, its membership included 154 member states, seven associate members (Flemish Community, Puerto Rico, Aruba, Hong Kong, Macau, Madeira, Netherlands Antilles), two observers (Holy See, Palestine). 15 of these members have withdrawn from the organization for different periods in the past: Australia, Bahamas, Bahrain, Canada, Costa Rica, El Salvador, Honduras, Kuwait, Malaysia, Nicaragua, Panama, Philippines, Qatar, Thailand and Puerto Rico.

Non-members are: Suriname, Guyana, United States, Belize, Trinidad and Tobago, Dominica, Grenada, Barbados, Antigua and Barbuda, Saint Lucia, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Liberia, Somalia, Comoros, Ireland, Iceland, United Kingdom, Denmark, Sweden, Finland, Belgium, Luxembourg, Liechtenstein, Estonia, United Arab Emirates, Myanmar, Singapore, New Zealand, Palau, Micronesia, Marshall Islands, Cook Islands, Tuvalu, Nauru, Niue, Kiribati, Solomon Islands, Samoa, Tonga and the rest of states with limited recognition.

Additionally there are some 350 affiliate members, representing the private sector, educational institutions, tourism associations and local tourism authorities. The frequent confusion between the two WTOs – World Tourism Organization and the Geneva-based World Trade Organization – officially ended on 1 December 2005, when the General Assembly approved to add the letters UN (for United Nations) to the start of abbreviation of the leading international tourism body in English and in Russian. UNWTO abbreviation remains OMT in French and Spanish. UNWTO General Assembly concluded its work at its 16th session in Dakar, Senegal, on 2 December 2005.

 

Active Vocabulary

promote – підтримувати; допомагати;

according – згідно;

total receipts – множ. загальна сума грошових надходжень;

reach – досягати;

prognosticate – передбачати;

contribute – вносити, робити внесок;

improvement – поліпшення, удосконалення;

broad – широкий;

sphere – сфера; галузь;

encourage – підтримувати, заохочувати;

joint – об’єднаний; сумісний;

relevant – що має відношення до справи;

injure – пошкодити; зіпсувати; завдати шкоди;

environment – навколишнє середовище;

heritage – спадщина;

expand – поширювати;

enhance – підвищувати;

prestige – авторитет;

community – товариство;

create – створювати;

condition – умова;

market – ринок.

Answer the following questions: