Kom verder. Saxion.

Tourism developmentIn Kabardino-Balkaria

Jacques Bazen, lecturer International Economics

Kom verder. Saxion.

Tourism development in Northern Caucasus

Focus area

Kom verder. Saxion.

Tourism Development in Kabardino-Balkaria

Main question for this focus area:

How attractive is this Republicfor foreign tourists?

Kom verder. Saxion.

Tourism Development in Kabardino-Balkaria

Strong points (among others):

- Breathtaking scenery- Hospitality of the people

How do these translate in numbers?

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Research

•With the support of Kabardino – Balkarian State University.

•Goal: How to increase thenumber of foreign visitorsto the Republic.

• Could the Sochi Olympic Games help change the image of the area?

Kom verder. Saxion.

Tourism development in Northern Caucasus

0

20

40

60

80

100

120

140

160

2009 2010 2011 2012 2013

Number of overnight stays by Russian citizens (x1000)

Republic of Dagestan Republic of Ingushetia Kabardino-Balkar Republic

Karachay-Cherkess Republic Republic of North Ossetia Chechen Republic

0

200

400

600

800

1000

1200

2009 2010 2011 2012 2013

Number of overnight stays by Russian citizens (x1000)

Stavropol Territory Other regions in North Caucasian federal district

Total North Caucasian Federal District

Kabardino-Balkaria is underperforming in terms of domestic overnight stays.

Kom verder. Saxion.

Tourism Development in Kabardino-Balkaria

0

0.5

1

1.5

2

2.5

3

3.5

4

2009 2010 2011 2012 2013

Number of overnight stays by foreign citizens (x1000)

Republic of Dagestan Republic of Ingushetia Kabardino-Balkar Republic

Karachay-Cherkess Republic Republic of North Ossetia Chechen Republic

Number of overnight stays byforeigners is very low, a couple of thousand at best.

The tendency is falling: no large influence of Olympic games on number of foreign visitors visible.

Kabardino – Balkaria also hereone of the underperformingregions.

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Tourism Development in Kabardino-BalkariaKey performance indicators

of the hotel sector in

Kabardino-Balkaria

2009 2013

Number of overnight stays

140 500 Russians

3 200 International guests

85 500 Russians

1 700 International guests

Investment in hotels/hotel

facilities in the entire Republic 22 100 000 rubles 200 000 rubles

Employment in the hotel sector

3000 persons 2200 persons

Market share of the Republic

for domestic overnight stays for

the entire Russian Federation

0.56% 0.25%

Income generated by overnight

stays

92 500 000 rubles 227 800 000 rubles

Average price per night Around 650 rubles Around 2600 rubles

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Tourism Development in Kabardino-BalkariaInvestments and price

developments in Kabardino-Balkaria

and Stavropol Territory

2009 2010 2011 2012 2013

Approximate overnight stay price

(in rub)

Kabardino Balkaria

Stavropol Territory

650

980

950

1000

1200

1400

1600

1800

2600

1450

Investments in the hotel sector

(in mln rub)

Kabardino Balkaria

Stavropol Territory

22.1

3.2

5.4

247.0

0.1

333.3

0.3

864.7

0.2

5.3

Kom verder. Saxion.

Tourism Development in Kabardino-Balkaria

Key performance indicators in general point to anunderperforming hotel sector in the Kabardino-Balkarian republic.

There is a growth in income of the hotel sector, but fallingnumbers of visitors and virtuallyno investment: Unsustainablesituation.

Kom verder. Saxion.

Tourism Development in Kabardino-Balkaria

How unsustainable are we talking?

Is the situation in reality similarto what has been reported in the statistics?

According to Vendina, Belozerov, & Gustafson (2007), the informal sector accounts to 60 – 80% of the economic value.

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Development of Entrepreneurial competences

How do Entrepreneurs in the hotel & pension sector deal withthe context of the Republic?

- Many of them have notregistered their business

- They rely heavily on theirpersonal network and have invested very little in business strategies.

- Very few speak English or German

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Development of Entrepreneurial competences

How do Entrepreneurs in the hotel & pension sector deal with the context / trends in the Republic?

- Conceptual model

- Type of internationaltourism selected:(Ecotourism, relativelysmall numbers, but relatively high expensesper tourist).

Government

Family / Local

community

Services

demanded by

foreign tourists

Entrepreneur

Hotel/Pension

Entrepreneurial

competences /

services offered

Local business /

Education

Gap

Figure 4: Conceptual model for entrepreneurial competences in the Kabardino-Balkarian Republic

Stakeholders

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Eco-tourism

What do eco-tourist fromWestern Europe ask for?

According to Khan (2008), eco-tourists from Western countries expect in particular a social and cultural experience, a trustworthy accommodation offer and especially also an environmentally sustainable operation.

Government

Family / Local

community

Services

demanded by

foreign tourists

Entrepreneur

Hotel/Pension

Entrepreneurial

competences /

services offered

Local business /

Education

Gap

Figure 4: Conceptual model for entrepreneurial competences in the Kabardino-Balkarian Republic

Stakeholders

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Stakeholders

- Local relations and family relations are strong in Kabardino-Balkaria. The loyalty of the entrepreneur will be at the local community. - The government has togive the right incentives for developing tourism.- Local businesses andeducation are needed forproviding quality training “applied science”

Government

Family / Local

community

Services

demanded by

foreign tourists

Entrepreneur

Hotel/Pension

Entrepreneurial

competences /

services offered

Local business /

Education

Gap

Figure 4: Conceptual model for entrepreneurial competences in the Kabardino-Balkarian Republic

Stakeholders

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Nalchik

Kom verder. Saxion.

Development of Entrepreneurial competences

Research method: Severalin-depth interviews, bothin formal and informalsector.

Several entrepreneurs report as main complaintthe falling number of customers.

Few entrepreneurs have had formal training in hospitality sphere.

Government

Family / Local

community

Services

demanded by

foreign tourists

Entrepreneur

Hotel/Pension

Entrepreneurial

competences /

services offered

Local business /

Education

Gap

Figure 4: Conceptual model for entrepreneurial competences in the Kabardino-Balkarian Republic

Stakeholders

Kom verder. Saxion.

Development of Entrepreneurial competences

Conclusions of the research:

- Awakening sense of urgency about the environment and pollutionamong entrepreneurs. (Crucial factor for eco-tourism).

- Strong ties to the local community. (Crucial factor for eco-tourism).- No interest among informal entrepreneurs to formalize their

business.- Foreign language competences (English) very low. (Crucial barrier for

tourism development).- All in all: Great opportunities for eco-tourism, provided the language

competences are improved, as well as long-term politicalstability.

Kom verder. Saxion.

Development of Entrepreneurial competences

Conclusions of the research:Great potential for eco-tourists

Kom verder. Saxion.

Development of Entrepreneurial competences

Questions, remarks?