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IN DEPTH: 'Dead Zones' Strangle Life Out of Bulgarian Resorts

Source: Balkan Investigative Reporting Network (www.birn.eu.com)
Published Date: 14 Apr 2006

Tourism industry may pay high price for uncontrolled development of Black Sea coast and skiing areas

By Tatyana Dimitrova in Sofia *

At Bulgaria's Sunny Beach and Golden Sands resorts, on the popular Black Sea coast, the air is filled with the sounds of construction.

Each of these resorts, increasingly popular with foreigners on the lookout for second homes, looks like a boomtown. But the appearance of prosperity is deceptive.

Analysts forecast that many of the shiny new complexes springing up almost weekly will face demolition within a few years, as owners find their hotels and apartment buildings lying empty and losing money.

And Bulgaria, they say, could end up repeating the experience of Spain's overdeveloped Costa del Sol a decade and a half ago.

Bulgaria's tourist industry has undergone a real renaissance in the last decade, bringing more foreign visitors to the country each year, most of whom come from European Union countries.

One spin-off has been a sharp increase in the construction of resorts, which has led to their capacity trebling in the course of ten years.

But not all the rapid development has been viable or well planned.

Lax state control and imperfect legislation have resulted in massive overbuilding on the Black Sea coast, and recently also in mountain ski resorts.

While much effort has gone into the building of hotels, restaurants and other tourist buildings, little care has been taken of the urban infrastructure or the remaining green spaces.

The gloomy precedent of Spain's Costa del Sol is increasingly spoken about as a warning of what can happen to a tourist industry if it is allowed to develop without control.

There, wholesale construction of densely packed high-rises all along the coast in the Sixties and Seventies resulted in the flight of better-off visitors to less "spoiled" resorts, leaving hoteliers in charge of empty buildings- a phenomenon known as "dead zones".

At the same time, the lack of green space in overcrowded Spanish resorts led to calls for buildings in the "dead zones" to be demolished to open up areas again. The result was a government-backed eight-year plan in Spain to recreate green areas in resorts through selective demolition.

Bulgarian experts fear this same wasteful scenario is becoming more and more applicable to their own country.

For now, entrepreneurs, quick to ignore environmental problems and lured by annual real estate prices rises of ten to 15 per cent, have been building at a frantic rate to feed foreign buyers' appetites. But tourist agents forecast that the boom may end in bust.

A NEW COSTA DEL SOL?

Real estate agents say "dead zones" - empty of the tourists who were supposed to occupy them - are already becoming more and more obvious in Bulgarian resorts. They have appeared in several of the most up-market locations, such as Sunny Beach, Golden Sands and Bansko, as a result of supply exceeding demand.

Alex Bebov, co-manager of the Bulgarian-British Fund for Real Estate Investments in Bulgaria , says demolition of some of these hotels is inevitable, although he hopes that they will be replaced by more attractive buildings, including more space and green areas.

Bebov says "dead zones" are especially obvious in areas that lie "far from the sea, near roads, or which are polluted and noisy". He predicts that more and more apartments will remain unoccupied in these areas, as they become more densely built up.

Naturally, those involved in the direct management of these resorts are keen to downplay the extent of the problem.

Blagoy Ragin, chair of the Hotel Owners Association, rejects talk of bad planning, insisting that problems connected with over-dense construction can be solved through some minor touches.

"We are planning a large scale campaign to introduce more greenery to resorts in the spring," he says.

But the facts speak for themselves. Overbuilding has already led to the supply of hotel beds outstripping demand by a worrying margin in parts of the country.

Rumen Draganov, chair of the Tourism Council in Sofia, says 364,000 beds are currently empty in Bulgarian hotels, forcing about 100,000 staff who are supposed to work there to stay at home.

"What Bulgaria is developing is not a tourist but a construction industry," he says.

Donka Sokolova, chair of the Bulgarian Tour Agencies Association, says officially Bulgaria 's functioning hotels are contracted with tour operators to be filled to capacity this summer.

However, she adds that this 100-per-cent occupation rate occurs only during the high season, which is in fact getting shorter. Many German tourists who used to come in April, she says, have cancelled their visits because of the construction work that continues throughout the spring.

A PROBLEM OR A CRISIS?

Tourism experts and environmentalists admit that it is difficult to detect the exact dimensions of the problem of overdevelopment in Bulgaria, owing to a lack of hard statistics.

Ludmil Ikonomov, director of the Ecological Modernisation Institute, an environmental organisation, says it is impossible to predict with scientific accuracy when the life of an overbuilt resort will fail and when owners of hotels will be forced to demolish their buildings.

But one revealing fact is that more than 200 hotels are now on the market in Bulgaria , having been put up for sale immediately after completion. One reason for this may be that owners worry about whether they will ever make a profit from their establishments.

Elena Ivanova, who chairs a council of local businesspeople in Sunny Beach, admits that many investors have been short sighted.

"For years experts were warning of the dangers of excessive building of hotels," she says. "But Bulgarians don't believe in prognosis. They want to test the effects of thoughtless investments!"

Meanwhile, at Sunny Beach, the building goes on. Fifteen hotels are under construction there, all in the densest part of the resort, which is already covered in tall buildings. Ivanova says the municipality has also issued 70 permits for new developments.

The problem is not limited to the coast, either. In Bansko, a popular ski resort, Ivailo Ruhov, the deputy mayor, says the municipality has issued 668 building permits in the last two years alone, 465 of which were for new hotels.

Aside from the fact that construction on such a massive scale will destroy the charm of this once sleepy small town, overdevelopment in Bansko has also already resulted in many empty beds in hotels and apartment buildings.

But Ruhov says the town council has no plans to stop construction as yet.

"We have no legitimate reasons to refuse construction permits to investors who have a perfect file of documents and a desire to invest their money in this municipality," he says.

Rumen Draganov, of the Tourism Council in Sofia, says people who build hotels "don't need to be blamed - they need support". He fears that Bulgaria has already lost many tourists who expect a little greenery when they go on vacation, as well as a degree of tranquillity. This latter is often in short supply, especially as the authorities often do not even tarmac the streets around new buildings.

"To get these visitors back we need infrastructure and regulations," Draganov says.

Dimitar Hadjinikolov, a professor of tourism and a former deputy minister, says Bulgaria has been slow in appreciating the environmental impact of tourism.

"The tourist product is a combination of buildings and environment," he says. "So when the whole territory is full of buildings the quality and the prices are much lower."

If profits slide, he goes on, hotel owners may have no option but to destroy the existing buildings and replace them with different products, as happened in Spain.

"Those who have invested should think in advance because there is no mercy in the market," Hadjinikolov adds. He fears that many of the investors in new resort apartments face either bankruptcy or the prospect of never recouping the cost of their original investments.

CAN THE INDUSTRY SORT ITSELF OUT?

While some of those involved in the business believe the government must develop and apply better controlling mechanisms, others maintain that natural economic trends will sort out the industry's problems.

Certainly parliament seems in no hurry to act. For more than three years, deputies have delayed adopting a law on the Black Sea area, which would impose better environmental and planning standards on developers.

Currently, the draft is again shuttling endlessly between different institutions, Donka Sokolova says.

Savin Kovachev, deputy minister at the ministry for regional development, believes the draft law could solve many of the existing issues. However, he does not believe that parliament will vote for it any time soon.

In the meantime, he says, there are simply "no legal grounds to refuse construction permits". "Investors' plans may be unreasonable, but if they are not against the law it is not in our power to stop them," he explains.

Understandably, Blagoy Ragin, head of the Hotel Owners Association, takes a milder view of the crisis, suggesting that large-scale resort construction is winding down of its own accord, as developers run out of vacant sites.

"A happy ending would involve a large investor buying up a whole resort, demolishing non-efficient hotels and replacing them with brand new ones," Ludmil Ikonomov, of the Ecological Modernisation Institute, says. "But this only a dream for now."

Bebov agrees. "The future belongs not to those who build ugly hotels but to those who invest in interesting decisions - and in buildings with wide green spaces in between."

But Rumen Draganov fears Bulgarian businesses are not yet mature enough for such far-sighted and imaginative solutions.

The negative trends in Bulgaria's tourism industry seem all too likely to continue for a couple more years, pending a dramatic change in the political or economic climate.

In the meantime, the phenomenon of "dead zones" threatens to increase its stranglehold on the country's coastal and mountain resorts.

* Tatyana Dimitrova is a journalist with Darik Radio in Sofia and a Balkan Insight contributor