Project "Tourism and futurism", Varshets- Sokobanja, No CB007.2.12.068.

MARKETING STRATEGY OF COMMON TOURIST DESTINATION SOKOBANJA - VARSHETS

The project is co-funded by the EU through the Interreg-IPA CBC -Serbia Programme.

DISCLAIMER

We have no obligation to update our findings and conclusions for changes in market conditions, which may occur subsequent to our fieldwork. Any such changes in market conditions will affect the validity of our estimates. Since changes in market conditions are likely to occur, it is expressly understood that we have no obligation to revise the report or the analysis of prospective conditions subsequent to the submission of our findings. Our study and report are based on assumptions and estimates that are subject to uncertainty and variation. All information provided by others has been accepted without audit or verification and is assumed to be correct. In addition, we have made assumptions as to the future behavior of consumers and the general economy, which are uncertain.

STATEMENT OF LIMITING CONDITIONS

This report is confidential to the party to whom it is addressed for the specific purpose to which it refers. No responsibility is accepted to any third party and neither the whole of the report nor any part or reference thereto may be published in any document, statement or circular or in any communication with third parties without our prior written approval of the form and context in which it will appear. The information contained in the report has been prepared in good faith and with due care by Horwath HTL. We have been provided with information by various third parties whom we have relied upon. Whilst due care has been undertaken in the application of the information, its accuracy cannot be verified by Horwath HTL. Should it be revealed any of this information is inaccurate or misleading so its use would affect our assessment, then Horwath HTL reserves the right to amend its opinion without liability.

© COPYRIGHT

2020 by HORWATH HTL All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without either the prior written permission of Horwath HTL or a license permitting restricted copying. This publication may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without prior consent of Horwath HTL.

TABLE OF CONTENT

1.1. ASSIGNEMENT ...... 7 1.2. PROCEDURES ...... 7

2. GENERAL DEVELOPMENT CONTEXT ______11 2.1. REPUBLIC OF BULGARIA ...... 11 2.1.1. General info ...... 11 2.1.2. Demographic trends ...... 12 2.1.3. Education ...... 12 2.1.4. Snapshot of tourism performance ...... 13 2.1.4.1. Tourism Economics ...... 13 2.1.4.2. Demand ...... 14 2.1.4.3. Supply ...... 14 2.1.4.4. Varshets – “The Green Soul of Bulgaria“ ...... 16 2.2. REPUBLIC OF SERBIA ...... 20 2.2.1. General info ...... 20 2.2.2. Demographic trends ...... 21 2.2.3. Educational Structure of the population ...... 21 2.2.4. Snapshot of tourism performance ...... 22 2.2.4.1. Tourism Economics ...... 22 2.2.4.2. Demand ...... 23 2.2.4.3. Supply ...... 24 2.2.4.4. Sokobanja - “Sokobanja, Sokograd, one comes old but leaves young” ..... 25

3. SITUATION ANALYSIS ______33 3.1. GLOBAL TOURISM MEGATRENDS ...... 33 3.2. DIGITAL PRESENCE ANALYSIS ...... 36 3.2.1.1. Digital presence analysis – Varshets ...... 36 3.2.1.2. Digital presence analysis – Sokobanja ...... 39

4. SWOT AND BENCHMARK ANALYSIS ______44 4.1. SWOT ANALYSIS VARSHETS ...... 45 4.2. SWOT ANALYSIS SOKOBANJA ...... 46 4.3. BENCHMARK ANALYSIS ...... 47 4.4. CONCLUSONS OF SWOT AND BENCHMARK ANALYSIS ...... 52 4.4.1. Varshets ...... 52 4.4.2. Sokobanja ...... 52 4.4.3. Conclusions of benchmark analysis ...... 53

5. MARKETING, PROMOTION STRATEGY AND ACTION PLAN______57 5.1. ESTABLISHMENT OF A MARKETING COOPERATION PLATFORM – BALKAN WELLNESS CLUSTER (BWC) ...... 57

5.2. DEFINITION OF MARKETING OBJECTIVES AND STRATEGIC FRAMEWORK ...... 59 5.3. ELMENTS FOR POSITIONING OF VARSHETS - SOKOBANJA AS TOURISTIC DESTINATIONS...... 60 5.4. STRATEGIC GOALS OF TOURISM MARKETING ...... 61 5.5. KEY GEOGRAPHICAL MARKETS ...... 62 5.6. TOURIST TARGET SEGMENTS ...... 63 5.6.1. DINKS - Double incomes, No kids ...... 64 5.6.2. EMPTY NESTERS ...... 65 5.6.3. FAMILIES WITH YOUNGER KIDS ...... 65 5.6.4. FAMILIES WITH GROWNUP KIDS ...... 66 5.6.5. GOLDEN OLDIES ...... 66 5.6.6. BACKPACKERS ...... 67 5.6.7. MICE (Meetings, Incentive, Conventions, Exhibitions) ...... 67 5.7. PRIORITY PRODUCTS ...... 68 5.7.1. Health & Wellness ...... 69 5.7.2. Short breaks ...... 70 5.7.3. Events & culture ...... 71 5.7.4. Touring ...... 72 5.8. STRATEGIC MARKETING AND PROMOTION INITIATIVES ...... 73 5.9. STRATEGIC MARKETING OBJECTIVES AND MEASURES ...... 76 5.9.1. Increase the number of guests visiting the destination...... 76 5.9.2. Increase attractiveness of (both) tourist destinations ...... 81 5.9.3. Improve the overall experience of guests ...... 86

CHAPTER 1 ASSIGNEMENT AND PROCEDURES Marketing strategy of common tourist destination Sokobanja - Varshets

MARKETING STRATEGY OF COMMON TOURIST DESTINATION SOKOBANJA - VARSHETS

1. ASSIGNEMENT AND PROCEDURES

1.1. ASSIGNEMENT

The purpose of this assignment is to create a unified Strategic Marketing Plan for cross-border joint products, Sokobanja in Serbia and Varshets in Bulgaria, with task to create and promote joint, unified, regional tourism products for the regional market. Preconditions set for creating a marketing strategy is the research that was conducted by two experts, one economy expert and one tourism expert, which explicitly included: 1. Analysis of the existing tourist products in the cross-border area; 2. PEST (general framework / context analysis), benchmark analysis of existing cross- border tourism offer in the two destinations and SWOT analysis; 3. Market analysis (existing supply and demand); 4. Analysis and evaluation of existing promotional methods. Based on the previous, the assignment is to define goals of the joint marketing strategy propose key tourist products for the cross-border area, identify prospective markets and market segments and define key activities / intiatives to support successful promotion of two destiations and their tourism potential.

1.2. PROCEDURES

The task has been carried out with following procedures and activities carried out: . Gathering the data and the analysis of the existing tourist offer and products in the cross-border area (Sokobanja and Varshets); . Strategic workshops and meetings of the working group for strategy development; . General context (PEST) analysis, benchmark analyses of the existing tourism offer in cross border region; . SWOT analysis of the current marketing system; . Development of a tourism marketing strategic framework for the cross – border area with Sokobanja and Varshets as initiating destinations; . Identification of vision and strategic marketing objectives; . Development of an action plan to support implementation of the identified strategic marketing objectives – with a strong focus on digital environment and new e- markeitng initiatives; . Development of a management model / initiative to support implementation of the marketing strategy.

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Since the task has been carried out in a difficult environment caused by Covid-19 pandemic, some of the task were caried out simultaneously, in coordination with the members of the working group. However, Horwath HTL organized and carried out 4 workshops with the members of the working group, where elements of the marketing strategy were discussed, explained and confirmed. Marketing strategy was delivered on September 24th, 2020.

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CHAPTER 2 GENERAL DEVELOPMENT CONTEXT Marketing strategy of common tourist destination Sokobanja - Varshets

MARKETING STRATEGY OF COMMON TOURIST DESTINATION SOKOBANJA - VARSHETS

2. GENERAL DEVELOPMENT CONTEXT

2.1. REPUBLIC OF BULGARIA

2.1.1. General info Bulgaria, officially the Republic of Bulgaria, is a country in Southeast Europe. Romania borders it to the north, Serbia and North Macedonia to the west, Greece and Turkey to the south, and the Black Sea to the east. The capital and largest city is ; other major cities are , Varna and . With 110,994 square kilometers (42,855 sq mi), The country joined NATO in 2004 and the EU in 2007. Bulgaria is Europe's sixteenth-largest country.

REPUBLIC OF BULGARIA

Official name: Republic of Bulgaria Location: South East Europe Climate: Complex climate types Official language: Bulgarian Main religion: Orthodox Currency: Bulgarian lev (BGN) Capital city: Sofia Area: 110,994 km2 Population: 7.10 mil. Bulgaria occupies a portion of the eastern Balkan peninsula, bordering Bulgaria is a unitary state. Since the five countries—Greece and Turkey to 1880s, the number of territorial the south, North Macedonia and to management units has varied from the west, and Romania to the north. seven to 26. Between 1987 and 1999 The land borders have a total length the administrative structure consisted of 1,808 kilometres and the coastline of nine provinces. has a length of 354 kilometres (220 mi). A new administrative structure was Bulgaria belongs to the GMT+2 time adopted in parallel with the zone. Bulgaria has a varied and decentralization of the economic changeable climate, which results system. It includes 27 provinces and a from being positioned at the meeting metropolitan capital province (Sofia- point Grad). ofMediterranean, Oceanic and Contin

Zvanično ime:

The Bulgars, a Central Asian Turkic tribe, merged with the local Slavic inhabitants in the late 7th century to form the first Bulgarian state. In succeeding centuries, Bulgaria struggled with

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the Byzantine Empire to assert its place in the Balkans. Still, by the end of the 14th century, the country was overrun by the Ottoman Turks. Northern Bulgaria attained autonomy in 1878 and all of Bulgaria became independent from the Ottoman Empire in 1908. It fell within the Soviet sphere of influence and became a People's Republic in 1946. Communist domination ended in 1990. Bulgaria held its first multiparty election since World War II. It began the contentious process of moving toward political democracy and a market economy while combating inflation, unemployment, corruption, and crime. Bulgaria has an open economy that historically has demonstrated strong growth, but its per- capita income remains the lowest among EU members and its reliance on energy imports and foreign demand for its exports makes its growth sensitive to external market conditions.

2.1.2. Demographic trends The demographic tendencies in the municipality follow those at the national level, as the deepening demographic crisis and aging of the population are also typical for the municipality of Varshets. For the period 2014-2017, following the general decreasing trend, typical for the district of Montana, as well as for the whole country, the number of the population in the municipality of Varshets is constantly decreasing. The population as of 31.12.2017 is 7271 people according to NSI data. The population of the municipality is about 0, 001% of that of the country, and 0.05% of that of Montana. The trend of urbanization is preserved, as of 31.12.2017 5668 people or 79% of the population of Varshets municipality live in the town of Varshets, and 1 603 people or 21% live in the villages. The population density in the municipality is 30.3 people / sq. Km. (31.12.2017) The indicator is lower than the average for Montana district (36.4 people / sq. Km) and that for Bulgaria (63.9 people / sq. Km). The survey of the population in the municipality of Varshets, distributed by age groups (as of 31.12.2019), shows that the number of the working age population and over working age significantly exceeds the number of the nonworking age population, which indicates a process of population aging. in the municipality. This, on the one hand, limits the opportunities for natural reproduction of the population, and on the other - limits the labor force. The trend is the same for Montana district, Northwestern region and for the country as a whole.

2.1.3. Education There are 3 schools on the territory of Varshets municipality: Vasil Levski National School, Varshets; Sofia University "Ivan Vazov", Varshets; Vocational High School of Economics and Tourism (PGIT), Varshets.

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2.1.4. Snapshot of tourism performance

2.1.4.1. Tourism Economics

Tourism contribution to country's GDP

Total contribution Year Share in GDP (%) (USD bn)

2013 6.4 11.5 2014 6.6 11.6 2015 5.4 10.8 2016 6.0 11.2 2017 6.7 11.5 2018 7.6 11.7 Source: https://knoema.com/atlas/Bulgaria/topics/Tourism/Travel-and-Tourism-Total-Contribution-to-GDP/ . Tourism in Bulgaria is a significant contribution to the country's economy. In 2013-2018 the average contribution to the economy (in nominal prices) was 6.45 billion USD with a sharp incline between 2017 and 2018, and with an average share of 11.4%. The total contribution grew by 3.5% (CAGR).

Tourist expenditures . Total tourist expenditures in Bulgaria were estimated at 4,845 million USD in 2019, out of which 89% were travel expenditures and the rest is passenger transport. It can be observed that tourist expenditures increased in the marked period 2015-2018, with a small decline in 2019. CAGR (compound annual growth rate) at the observed period is 7.8%.

Source: UN World Tourism Organization (2020), Compendium of Tourism Statistics dataset

. The share of personal spending is dominant in the entire period. This category's values also rise between 2015-2018 with a slight fall in 2019 (CAGR 7.8%), while the share of

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the business and professional spending is much smaller (26%). Still, it increases faster (CAGR 8.8%) during the same period.

Source: World Tourism Organization (2020), Compendium of Tourism Statistics dataset . In the future, the main challenge for Bulgarian tourism will be competing in the international tourist market because it is overcrowded. Other countries offer specific tourism products with which they want to attract as many market segments as possible.

2.1.4.2. Demand . Tourist demand in Bulgaria follows the global trend in 2015-2019, and the increase in the number of guests is gradual.

Source: Eurostat, 2020.

2.1.4.3. Supply . The number of tourist establishments in Bulgaria has been continuously increasing in the last five years at a rate of 3.43%.

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Source: Eurostat, 2020. Establishments include: hotels, holiday and other short-stay accommodation, camping grounds, recreational vehicle parks, and trailer parks

Source: Eurostat, 2020.

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The Green Soul of Bulgaria

2.1.4.4. Varshets – “The Green Soul of Bulgaria“ BASIC INFO . Varshets is a national resort located in the western region of Bulgaria. The town of Varshets is known for the healing properties found in its mineral springs. Spa centers offer treatments that heal illnesses related to the vascular system, endocrine system, gastrointestinal system, and nervous system. Not only do its mineral springs distinguish the town from others, but it is the second-largest natural park on the Balkan Peninsula. Its beautiful green and dense landscape aids in supporting the area with clean air. . Varshets caters to individuals/families' needs looking to immerse themselves in nature while also providing a myriad of different recreational activities. These include nature paths, swimming, running, cycling, volleyball, motorsports, and football fields. . Focus on Spa & Wellness and individual touring.

HOSPITALITY in Varshets . Varshets accommodation is mostly in hotels and a resort. . Varshets has 6 hotels with 572 beds and 1 resort with 1,070 beds. . There is a potential of 120 additional beds where touristic activities are carried out. . The majority of the hotels are positioned in the 4-star and 3-star segments; 4-star accommodation accounts for 45% of total hotel supply. . Total overnights in 2019 were 66,000.

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HOSPITALITY – MICE in Varshets

. MICE facilities are well established:

o Spa Hotel ATA-180, 1 conference room, 1 meeting room; o Spa Hotel Medicus-100 max capacity, 1 conference room, 1 meeting room; o SPA Hotel Sunny Garden- 60 max, 1 conference room; o Hotel Tintiava- 50 max, 1 conference room; o Hotel Minkovibani, 120 max, 1 conference room; o Hotel Chinarite, 120 max, 1 conference room; o "Hristo Botev - 1900 town of Varshets" Community Center 390 max with a showroom in/around the hall.

ATTRACTIONS in Varshets . Various attractions are available to guests. . Touristic sites within Varshets consist of a museum, art gallery, and summer cinema. . The Municipal Museum collection houses archaeological, antique, and balneological artifacts. There were 150 visitors in 2018. . The summer cinema is a seasonal attraction that has a capacity of 250 people.

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. Touristic sites within Varshets consist of a museum, art gallery, and summer cinema. . The Municipal Museum collection houses archaeological, antique, and balneological artifacts. There were 150 visitors in 2018. . The summer cinema is a seasonal attraction that has a capacity of 250 people. ACTIVITIES – FACILITIES in Varshets . The destination abounds in sports facilities.

o Bicycle lane (2,227m long and 2m wide) – capacity 350 visitors in 2019; o Park Sports Center that includes a football pitch, volleyball, and outdoor basketball courts, 600 visitors in 2019;

o Multifunctional sports hall, designed for volleyball, basketball, handball, tennis – 1,200 visitors in 2019;

o Rope park; o Artificial ice rink; o One public swimming pool in the Village of Spanchevtsi (2 acres) with 50 seats on the grandstand and rescue safety service.

EVENTS IN VARSHETS – Timeline . City Varshets organizes various events thought the year which attract guests. . Most events are concentrated in summertime – June, July and August.

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2.2. REPUBLIC OF SERBIA

2.2.1. General info The Republic of Serbia is a democratic state of all of its citizens. Its history and achievements make it an integral part of modern civilization and the international community. Serbia is referred to as the crossroads of Europe. It is divided into two provinces, 29 administrative districts, with 194 municipalities, 6,169 settlements, 207 city settlements, and 5,962 other settlements. Belgrade and Nis enjoy the status of a special district in Serbia.

REPUBLIC OF SERBIA

Official name: Republic of Serbia

Existing c orridors Half constucted corridors Location: South East Europe Highways Highways in construction Planned highways Climate: Continental Official language: Serbian Main religion: Orthodox Currency: Dinar (RSD) Capital city: Belgrade Area: 88.361 km2 Population: 7.49 mil. (exc. Kosovo)

Republic of Serbia is located in the Serbia rivers belong to this basins of central part of the Balkan Peninsula. It the Black, Adriatic and Aegean Seas. is considered the crossroads of There are three navigable rivers: Europe, situated at the intersection of Danube, Sava and Tisa. The longest Pan-European Corridors 7 and 10. river is Danube, which flows for 588 kim through Serbia. Serbia belongs to the Central European Time zone (1 + GMT). Serbia borders Bulgaria to the east, Romania to the north-east, Hungary to Climate is moderate continental, with the north, Croatia and Bosnia and a gradual transition between the four Herzegovina to the west, Montenegro seasons of the year. to the south-west and Albania and Macedonia to the south. Zvanično ime:

Serbs came to the Balkans during the great migration in the 6th and 7th centuries AD. The earliest records of Serbs in Balkans, we can find in Byzantine Emperor Konstantinos VII “Porphyrogenitus” in the 10th century. After fighting his brothers, Stefan Nemanja, the Nemanjic dynasty founder, came on the throne in 1170. Medieval Serbia enjoyed a high

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political, economic and cultural reputation in Medieval Europe. The Turkish rule period came after defeating the Serbian army in two crucial battles, Marica (1371) and Kosovo Plane (1389). The independent Principality of Serbia was formed and granted international recognition in 1878. During the 20th century, the First and Second World Wars were at its territory. In the period after 1944. Serbia was a part of SFRJ, as a communist country. Today, the Republic of Serbia is, like most countries in Western and Central Europe, a parliamentary democracy. Serbia became a stand-alone sovereign republic in the summer of 2006 after Montenegro voted in a referendum for independence from the Union of Serbia and Montenegro. Membership in the European Union is Serbia's strategic goal and has been at the forefront of all governments since democratic changes.

2.2.2. Demographic trends In the municipality of Sokobanja, in the period of 1953-2002, a decrease in the number of inhabitants was recorded in 24 settlements, and only in the settlement of Sokobanja an increase was recorded, as a consequence of migratory movements of the population. According to the 2002 census, there were 18,521 inhabitants in Sokobanja, in 2011 16,021 inhabitants, and according to the latest projections of the Statistical Office of the Republic of Serbia, Sokobanja has 13,967 inhabitants (2019). The presented data indicate a negative trend in the number of inhabitants in Sokobanja for the period of 2015-2019. Factors influencing depopulation are population migrations and negative natural increase, which in Sokobanja is -17.0. In the municipality of Sokobanja, the average age of the population is 47 years, with a larger number of women than men.

2.2.3. Educational Structure of the population The largest number of inhabitants of Sokobanja has a secondary education (38.6%), but a large number have incomplete primary education (26.4%) or primary education (22.7%). There is a small population with university and college education. In 2018, 1,318 inhabitants of Sokobanja were not employed. The highest percentage of the total unemployed population belongs to the category "Qualified and with secondary education" (58%), followed by the category "Unqualified or with lower education" (27%), and the lowest number is of highly qualified (15%). Three schools in the Zaječar district offer education in the field of trade, tourism and catering, namely: "Branislav Nušić" high school in Sokobanja, "Nikola Tesla" high school in Boljevac and the School of Economics and Trade in Zaječar. All of the above schools have the profiles of trader, tourist and catering technician and cook.

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2.2.4. Snapshot of tourism performance

2.2.4.1. Tourism Economics

Tourism contribution (total) to country's GDP Total contribution Year Share in GDP (%) (USD bn)

2013 2.5 5.6 2014 2.6 5.9 2015 2.4 6.4 2016 2.5 6.6 2017 2.9 6.9 2018 3.3 6.9 Source: https://knoema.com/atlas/Bulgaria/topics/Tourism/Travel-and-Tourism-Total-Contribution-to-GDP/ . In Serbia, tourism is officially recognized as a primary area for economic and social development, with a growth of 5.7% (CAGR) in the period 2013-2018.

Tourist expenditures . Total tourism expenditures in Serbia reached 1,461 million in 2016. The travel expenditures make the most expenditure (79%), while passenger transport contributes 21%.

Source: World Tourism Organization (2020), Compendium of Tourism Statistics dataset . In the observed period 2015-2019, tourists' total spending continuously grows at a rate of 8.7% (CAGR). During the same period, the expenditure structure remains the same, apx. 20% of travel and 80% of passenger transport.

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Source: World Tourism Organization (2020), Compendium of Tourism Statistics dataset . The share of personal spending is dominant in 2019 (98.7%), while the share of the business and professional spending is minor (1.3%).

2.2.4.2. Demand

Source: Statistical Office of Republic of Serbia . The number of foreign tourists is growing significantly, by the rate of 13.1% (CAGR), from 1.13 million in 2015 to 1.84 million in 2019. In the same year, foreign arrival in Serbia accounts for 50.0% of total arrivals. In the period 2015-2019, domestic arrivals grew by 9.2% . The most important source markets for Serbia in terms of share in total arrivals are Bosnia and Herzegovina (7.8%), Bulgaria (6.8%), Turkey (6.5%), Montenegro (6%), and Croatia (5.9%).

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. Dynamic restructuring of destinations in Serbia toward a modern, experience-oriented product will drive the demand even further.

Source: Statistical Office of Republic of Serbia . The average length of stay in Serbia is 2.7 nights.

2.2.4.3. Supply . Supply structure has been dynamically restructuring in the past 15 years, following measures foreseen with the first Strategy for Tourism Development from 2006 – 2015.

. The obsolete, not competitive facilities had partially been renovated, while new facilities emerged, mainly with smaller capacities, which explain the slight increase in the number of available rooms. . Accommodation capacity structure in Serbia indicates that the largest share of capacity (according to the number of rooms) is located in the clusters of Western and Eastern Serbia (two thirds). However, when it comes to accommodation quality level structure,

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Belgrade is characterized by the most significant share of higher quality accommodation capacity, including international hotel brands.

“Sokobanja, Sokograd, one comes old but leaves young”

2.2.4.4. Sokobanja - “Sokobanja, Sokograd, one comes old but leaves young” BASIC INFO: Sokobanja . Sokobanja is a well-organized and communicated tourist attraction located in the southeast region of Serbia. Dubbed “The Green Heart of Serbia” is well known for its thermal mineral springs, clean air, and recreational activities. Its abundant natural resources are the driving engine of its appeal. . Sokobanja is the oldest spa center in Serbia and is well known for its prevention and treatment of diseases, particularly lung diseases. . The offer is tailored to many interests - relax, adventure, authentic Serbian specialties, learn about history in the untouched natural surroundings. It is the perfect place to improve physical and mental health. There is an emphasis on individual touring and spa & wellness.

TRANSPORTATION in Sokobanja . Sokobanja has various transportation modalities and offers 34 daily bus departures from the station during the season. . Transport capacity includes:

o 27 taxi vehicles; o 25 seasonal bus lines and 10 year-round bus lines; o 1 public bus enterprise and o 1 private transportation company with 3 vehicles (2 vans and 1 bus) with 20 departures per day towards tourist attractions;

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o Parking areas: 10 for cars and 2 for buses. . As reported by TO Sokobanja, guests mostly come by car and via airport “Nikola Tesla” Belgrade in airplane transport.

HOSPITALITY – ACCOMMODATION in Sokobanja . Investment in accommodation capacity is necessary due to the lack of high-quality hotel accommodation. . Private accommodation predominates in Sokobanja, with a small number of hotels. . According to information obtained from the TO, Sokobanja has registered 6 hotels, 2,142 private rooms with 1,248 beds; 771 private accommodations with 7,805 beds; 8 rural tourist households with 55 beds (overnight stays); 2,465 registered agricultural households (without overnight stays) and 2 Special hospitals with 800 beds. . Accommodation capacity in the last three years grew at a rate of 12% (CAGR). . The hotel accommodation quality is not satisfactory – almost half of the beds are at the lowest quality hotels. . Hotel congress capacity is also modest (4* hotels have 2 halls (230 part.), while 3* hotels have 1 hall (250 part.).

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HOSPITALITY - FOOD AND BEVERAGE FACILITIES in Sokobanja . Sokobanja offers numerous restaurants and fast-food facilities that provide local food (roasted meat, barbecue, slow-cooked traditional meals) and has an international offer (sandwiches, pizzas, gyros).

BUSINESS AWARDS in Sokobanja . The quality of facilities is recognized externally and businesses in Sokobanja have received numerous awards, including:

o Restaurant Chicago - Gold medal for quality at the 2009 Novi Sad Fair, o Apartments Nikolic - Gold medal for quality accommodation at 2009, 2010, and 2015 International Tourism Fair in Novi Sad, and

o Nataly Spa - Prestigious award Tourist Flower for the best hospitality facility for accommodation in 2019 by The Tourism Organization of Serbia.

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EVENTS IN SOKOBANJA – Timeline . Numerous events in Sokobanja attract tourists and enrich the tourist offer. . The highest concentration of events is in May, July and August.

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CHAPTER 3 SITUATION ANALYSIS Marketing strategy of common tourist destination Sokobanja - Varshets

MARKETING STRATEGY OF COMMON TOURIST DESTINATION SOKOBANJA - VARSHETS

3. SITUATION ANALYSIS

3.1. GLOBAL TOURISM MEGATRENDS

. Global tourism megatrends are primarily driven by digital technology. . Ten global tourism megatrends are:

o On the demand side: 1. Silver hair tourists, 2. Generation Y & Z, 3. The growing middle class, 4. Emerging destinations, 5. Political issues and terrorism,

o On the supply side: 6. Technological (r)evolution, 7. Digital channels, 8. Loyalty v.X.0., 9. Health & healthy lifestyle, 10. Sustainability.

. Destinations need to be adapted quickly, given the relevance of digital trends concerning the primary business.

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OVERVIEW OF KEY TRENDS RELATED TO DIGITAL TECHNOLOGIES

. The digital tourism ecosystem has become significantly more complex.

. Digital experience has become a key term for understanding intense changes in habits and behaviour of tourists.

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. Therefore, digital platforms are necessary tools required for effective promotion and increased customer satisfaction.

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3.2. DIGITAL PRESENCE ANALYSIS

3.2.1.1. Digital presence analysis – Varshets Municipality of Varshets

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City of Varshets

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Portal of Varshets

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3.2.1.2. Digital presence analysis – Sokobanja

Touristic Organization of Sokobanja

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Sokobanja Portal and Touristic Center

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Sokobanja Travel

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CHAPTER 4 SWOT AND BENCHMARK ANALYSIS Marketing strategy for the cross-border area of Sokobanja - Varshets

MARKETING STRATEGY OF COMMON TOURIST DESTINATION SOKOBANJA - VARSHETS

4. SWOT AND BENCHMARK ANALYSIS

. To draft the master plan, the SWOT analysis was performed as a structured planning method for evaluating some aspects of the current situation and future tourist development of Trebinje. It highlights four aspects of the analysed unit:

o Strengths – characteristics that can be relied on to achieve success. The key, most relevant and most intense forces are those that have the potential to translate into long-term sustainable competitive advantages;

o Weaknesses – internal characteristics that are barriers to achieving the success of the selected project, business or direction of development. Weaknesses of lesser importance or intensity can be overcome in the long run, but important and intense ones strongly affect fundamental strategic commitments and rank ambitions;

o Opportunities – external aspects that have a positive impact on the speed of implementation and attractiveness of the venture but generally have a limited impact on the strategic commitments themselves;

o Threats – aspects that can potentially limit or bring additional risks to the venture.

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4.1. SWOT ANALYSIS VARSHETS

STRENGTHS WEAKNESSES . Transportation not well-developed . The perceived image of healing the sick . Natural resources . Undeveloped infrastructure . Diverse offer for people with different . Neglect of using touristic agencies interests . Lacks of virtual (Internet) resources . Clean air and untouched nature about the attraction

OPPORTUNITIES THREATS

. Additional tourist offer . Tourist destinations with amplified . Social media marketing marketing strategies . Overall marketing for complete tourist . Government hindering cooperation offer with the private sector . Increased development of the touristic . Political corruption attraction . Other developed spa & wellness . Marketing to families with young children competitive destinations

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4.2. SWOT ANALYSIS SOKOBANJA

STRENGTHS WEAKNESSES . Well versed touristic offering . Well-developed tourism . Options for everyone (sports and recreation, spa & wellness, rural tourism, active vacation, and healthy living) . The perceived image of a wellness . Rich offer of accommodation center for the elderly and sick . Organized transport to Sokobanja . Most guests are from Serbia and the . The price range is reasonable and budgets Balkan region friendly to all age groups . Insufficient infrastructure . Natural resources . Various events and cultural attractions for visitors . Touristic organization support in financing and carrying out events

OPPORTUNITIES THREATS . The attraction of younger generations (many activities that will spark their interest) . Amplified use of social media platforms . Economic instability/pandemic for the promotion . The governmental structure can hinder . Potentially expand current offerings with cooperation with the private sector a new segment- guided tours . Other innovative touristic destinations experiencing and becoming one with that create tourist products better and nature (Slow Adventure) faster . Increase tourism size . Low-quality offerings . New emerging markets . Political corruption . Additional infrastructure . Younger people begin to invest in health - a new wave of a health-conscious generation

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4.3. BENCHMARK ANALYSIS

Benchmarking is a way of discovering what is best achieved in a particular system (company, tourist destination, etc.) by comparing it with the competition or with examples of good practice in a particular sector. This information can then be used to identify “gaps” in processes to achieve a competitive advantage. In the case of spa destinations such as Sokobanja and Varehets, the following examples of best practice were selected:

. “Baden Baden”, Germany;

. “Karlovy Vary”, Czech Republic.

. „Term Catez“, „Catez on Sava“,. Slovenia;

. "" Bulgaria. The following part of the study presents the basic parameters of these destinations.

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Destination: Baden Baden (Germany)

Type of complex Spa destination for rest and Content type: recovery Location: Baden Baden is located about Accommodation : Offering 42 hotels, of which 160km from the airport in 35* hotels and 13 4* hotels. In addition to these, there are Frankfurt, 300 km from Munich, a large number of other accommodation facilities (holiday 100km from Stuttgart and houses, apartments) 180km from Basel. Located on One of the most popular hotels on this destination is the the slopes of Schwarzwald Breners Park-Hotel & Spa. This 5-star hotel offers mountains, province of Baden- exclusive spa facilities. It is set within the picturesque Württemberg. gardens of Baden-Baden, a 10-minute walk from the Population - 50,000 inhabitants Kurhaus spa center. Cultural . Castle Festival (German: Festspielhaus ) Positioning: . Health and wellness attractions : . Stiftskirche (Gothic style temple) . Museum Faberge . Ludwig Wilhelm statue . New castle (built in 1479.) . Evangelic church in the center of Augustplatz . Hohenbaden Castle Target markets: . Seniors Spa facilities: . Business people . Athletes . Aromatherapy . Friedrichsbad - a spa built in Roman and Irish style and tradition . Salina Sea Salt Grotto - healing salt "sea" . Caracella Spa - 12 thermal springs and baths, spa center (discovered 2000 years ago) Activities: . Pools and swimming Natural . Lichtental alley . Bike rides attractions: . Thermal springs . Mountain climbing . Geroldsau waterfall . Golf . Mercury mountain . Hippodrome . Freiburg . Cultural contents . lakes Sulmsee, Waldsee, Bergsee www.baden-baden.com

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Destination: Karlovy Vary, (Czech Republic)

Type of complex Spa destination for health and Content type: relaxation

Location: The destination is located in the Accommodation: The total capacity is more than 10,000 beds western part of the Czech Republic. The area is 59 km2. There are 9 5* hotels, 60 4* hotels, 58 3* hotels, 21 2* The population is 50,594, hotels, 8 1* hotels, as well as 41 apartments and 32 altitude 370-600m. The nearest boarding houses. The spa has 5 MediSpa hotels. city center is 50km away and the capital is 120km away. The first big city abroad is 320km away (Munich). Positioning : Destination for wellness and spa Cultural . MOSER Glass Museum vacation, known for the quality attractions: . Church of St. Mary Magdalene of (medical spa) treatments, . Diana's lookout treatment tradition and . Orthodox Church of St. Peter and Paul relaxation. . Museum and gallery Target markets: . MediSpa Spa facilities: Mineral waters are mostly used as a medicinal drink and as . Well-being active rest and the most important part of a spa treatment. There are 12 relaxation hot springs. It is also known for its colonnades, museums . Golf and galleries, parks and numerous churches. The hotels . Seniors offer all modern spa facilities. . Business people Activities: Hiking and health trails Natural . The Orga river, which flows between Loket Pools and swimming attractions: Castle and Karlovy Vary County in Doubia Gym and fitness . Park in the center of the city Aleksandar Dvorak Tennis, bowling . River Tepla Bike riding Rollerblading, hockey, skating Paintball Horse racing, horseback riding Events that emphasize the culture and tradition of the destination ttps://www.karlovyvary.cz/en

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Destination: Term Catez, Catez on Sava (Slovenia)

Type of complex: Spa destination for health Contents: relaxation and fun Location: Catez on Sava is 420 km away Accommodation : Terme Catez has 4 hotels / 492 rooms from Beograd, 30 km from Apartmant settlement 400 accomodation objects Zagreb, 104km from Ljubljana Kamp settlement 450 places

Cultural . Custle Mokrice Positioning: Medical treatments, wellness, attractions: . Brežnice custle well- being , family vacations . Monastery Pleterje

Target markets: . Pairs Spa services: The Summer Thermal Riviera stretches over 10,000 m 2 . Bussiness people and includes various water attractions and pools with . Seniors thermal water temperatures from 26 to 36 ° C. Guests . Families with children have at their disposal an Olympic-size swimming pool, a wave pool, a whirlpool pool, a slow 450 m long river, as well as water slides. The youngest guests are most attracted by the pirate island and the children's water park on 900m2. The Winter Thermal Riviera stretches under three domes on 2,300 m 2. It consists of a large irregularly shaped pool, a children's pool, a pirate ship, a wave pool, a wild river and whirlpools. Sauna park (crystal sauna, steam sauna, extreme sauna, Indian sauna, salt sauna, infrared, Finnish aroma sauna, aquaviva sauna); Health and beauty center (fitness studio, solarium, beauty salon, therapy rooms and individual hand techniques massages, manual lymphatic drainage and reflex-zone foot massage, hydrotherapy, kinesitherapy, electrotherapy, thermotherapy)

Activities: . Bathing, massages Natural . Natural park Jovsi . Field trips attractions: . Brizevsko - vineyard area . Mini golf, tennis . Gorjanci - forest-meadow area . Bike ride . Visit to wineries . Amusement water parks

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Destination: Sapareva Banya (Bulgaria)

Type of complex: Spa destination for health Contents: relaxation and recreation Location: Sapareva Banya is a town in Accommodation : Hotels, family hotels, houses and guest rooms. Total bed southwestern Bulgaria. It is capacity – 2000 located on the northern slopes of Rila, 15 km from . The city is famous for its hot mineral and clear mountain water, as well as the geyser in the city center. Sapareva Banya is known as the city with the hottest mineral water in Continental Europe - 103 °. Cultural . Medieval Church of St. Nicholas Positioning: Medical procedures, wellness, attractions: . Resilovo Monastery "Protection of the Mother of family vacations God" . City Gallery . Old Turkish bath Target markets: . Retirees Spa services: . Couples . hydrotherapy with mineral water, mineral shower, . Families with children indoor indoor mineral pool and outdoor outdoor mineral pool, baths with mineral water, baths for underwater massage . mud therapy . treatment with lye . physiotherapy . mechanotherapy and therapeutic exercise Activities: . Bathing, massages Natural . Geyser fountain . Excursions attractions: . The seven Rila lakes . Cycling . Hiking and ecotourism . Religious tourism

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4.4. CONCLUSONS OF SWOT AND BENCHMARK ANALYSIS

4.4.1. Varshets

. The strengths on which it is possible and necessary to base further tourism development predominantly derive from its natural resources, with clean air and untouched nature. it is especially important to emphasize offer diversity which allows guests of different interests to meet their needs.

. Weaknesses are mainly related to the elements of the tourist offer and general competitiveness, i.e. the input factors of some future development - transport and other infrastructure (internet), and insufficient engagement of experts (TAs);

. The analysis also pointed to opportunities of Vršec, as a tourist destination. The potential is seen in the enrichment of tourist services and attraction and promotion through social media, as well as the improvement of complete tourist marketing, with emphasize on families with young children.

. The main threat pointed out by the analysis is the competition of developed spa & wellness destinations, especially those that are already implementing modern marketing strategies. In addition, political corruption and the failure to cooperate with the private sector slow down development and reduce competitive advantage.

4.4.2. Sokobanja

. Among the key strengths, it can be concluded that Sokobanja has a well recognized tourist destination in Serbia, with a well-structured and versed touristic offer. It has a strong commitment to restructuring of its tourist infrastructure, through various municipal initiatives, supported by Tourism Organization of Sokobanja, which creates a strong basis to attract new guests who will spend more and opens space for a modern marketing concept.

. Weaknesses are mainly related to the elements of the tourist offer and general competitiveness, i.e. the input factors of some future development (finances, human resources).

. On the side of opportunities, the orientation and development principles of the EU are clearly emphasized, which especially encourages rural development, culture, support for employment of women and young people, as well as small and medium entrepreneurship, which are also important development commitments of Sokobanja municipality in the development of (not only) tourism. Certain global tourist trends are also positive, primarily tendencies in the development of short vacations, global growth of the health & wellness industry, as well as the aging trend of the traveling population, given that the resource- attractive basis of Sokobanja is favorable for creating products attractive to older market segments (spa tourism, gastronomy, cultural tourism, nature tours,). A special opportunity

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is the branding and new strategy of tourist marketing Sokobanja, which should be even more focused on digital platforms and online presence.

. The main threat to the long-term development of tourism in the Sokobanja area is related to the possible orientation to urban development models that are difficult to combine with the development of value added tourism, such as exclusive orientation to mass tourism, indiscriminate construction of tourist facilities without parking, serving cheap mass food that could reduce representation of indigenous cultures and the like. Other threats are related to further demographic and economic decline, which would further rapidly reduce the preconditions for future development.

. However, one of the key challenges for the joint marketing initiative in the cross- border area remains a lack of a platform for cooperation and coordination of activities, first for stakeholders from Sokobanja and Varshets, and later for other interested destinations and tourism entities in the area. Thus, one of the most important recommendations from this strategy needs to propose a flexible solution for a management model to support implementation of this strategy and the measures foreseen and presented herein.

4.4.3. Conclusions of benchmark analysis

. Holistic integrative concepts, as well as those related to modern lifestyle, which emphasize the search for a balanced lifestyle (including holistic resorts, spas and wellness centers);

. Concepts of active holidays (e.g. sports and adventure tourism), which are increasingly combined with health and spa tourism;

. Sustainable and ecological approach, principles of construction and design, as well as operations adapted to the use of all categories of users - including "eco-spas", "slow" organic food and natural and cosmetics based on the use of minerals;

. Guests who use the services of capacities in health tourism especially appreciate peaceful and beautifully arranged destinations, which have a relaxing and inspiring impact on the mind, body and general state of human well-being – for example, the so-called “dreamscapes”, eco-fit resorts, etc.;

. Tourists whose main motive for travel is health tourism have a need to seek and connect with people who have similar attitudes and needs, or who share similar problems and search for new habits (weight loss, active programs, detox programs etc.);

. Workshops, trainings and educations are becoming a key part of "health" vacations, as people not only want to occasionally experience the effects of staying in this type of facilities, but also want to accept a new way of life as a philosophy of life and apply “tips and recommendations” in everyday life;

. The impact of technology is ubiquitous; technology is often used as a tool for improved and enhanced interaction with wellness clients, offering a variety of services and programs (e.g.

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virtual trainers that even in the spa/health facilities themselves have access to top instructional materials and a large number of trainers, cloud software which allow hotels in operations to eliminate receptions and, instead, welcome guests via tablet and personalized messages, etc.);

. Increased hotel orientation towards the implementation of the health concept, which represents a better integrated concept of healthy lifestyles and health and wellness awareness in all segments of the hotel offer, rather than only within the limited offer provided it spa and wellness facilities within hotel. This represents a fundamental change, which is one of two such changes in the hotels of the future and which will change the conceptual and operational approach in the wellness hotel industry;

. Hotel investors and company management mostly recognize the economic benefits of wellness contents and wellness orientation in the facilities, and guests know how to appreciate that. Global hotel brands are increasingly representing health and wellness concepts within their products and services, i.e. within the experience they offer guests, creating even new brands based on this new paradigm (e.g. EVEN Hotels - Wellness Hotels from IHG, Accor Thalasso, innovative fitness options "built" into the rooms - Omni Hotel's Get Fit Rooms, Westin WORKOUT guest rooms, etc.).

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CHAPTER 5

STATEGIC MARKETING PLAN

Marketing strategy for the cross-border area of

Sokobanja - Varshets

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5. MARKETING, PROMOTION STRATEGY AND ACTION PLAN

5.1. ESTABLISHMENT OF A MARKETING COOPERATION PLATFORM – BALKAN WELLNESS CLUSTER (BWC)

GOALS . To create a platform to improve cooperation among nature and wellness & spa destinations in a wider region of Balkan Mountain (cross-border area between Republic of Serbia and Republic of Bulgaria), with the aim to make meaningful marketing cooperation with all important stakeholders at the cluster level; . Improving the general level of competitiveness of tourism through the identification and articulation of the common interest of cluster members and the use of synergetic effects in the form of joint efforts, improved coordination and planning. DESCRIPTION OF THE MODEL / PLATFORM In order to more efficiently develop and articulate the interests of health and wellness tourism service providers in the subject area, it is advisable to combine forces, knowledge and resources in order to successfully penetrate regional and international markets. The basis of a satisfactory level of competitiveness is based on cooperation between public and private sectors, where the establishment of a cluster should be an efficient and flexible solution, first, as a platform for marketing cooperation – Balkan Wellness Cluster (BWC). Therefore, it is proposed to form a cluster of wellness tourism entities / destinations and other interested parties in the cross-border area between Serbia and Bulgaria, as a platform for marketing cooperation among main stakeholders within the cluster and joint communication with the main decision makers. The cluster aims to increase the general level of competitiveness of economic entities operating in the health and wellness tourism sector, primarily through the identification and use of synergy effects in the form of joint efforts to increase competitiveness, more efficient marketing, improve coordination, joint planning and use of internal and external know-how. BWC brings together leading experts from the fields of wellness and spa tourism, medicine, health industry, and other related activities who, with their experience and knowledge, want to improve existing institutions and businesses in order to improve the quality of services and products and joint promotion on the domestic, regional and international markets. In addition, the Cluster, as a kind of service in cooperation with its strategic partners, ensures more favorable procurement conditions, organizes education through the Resource Center and promotes the interests of its members.

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The cluster coordinates efforts to define new products or improve existing ones, conducts research through its Resource Center, identifies products and markets with greater potential, develops product creation and marketing strategies, creates reports, attracts partners and works to build a stable administrative structure and system environment. The essence is in creating a platform of cooperation that will enable proactive access to products and markets by the factors of supply (all interested tourism entities) in the cluster itself.

BASIC TASKS FOR IMPLEMENTATION The basic steps include a set of elements, which must be observed integrally, and the implementation of which can create synergetic effects: 1. Establishment of a platform for cooperation and incentivization of stakeholders, through the creation of rules and procedures for cluster work 2. Organization of the first working meeting and presentation to the public of the goals of the work 3. Form programs and work plans 4. Constantly maintain the interest of all entities in the cluster 5. Identification of bottlenecks in the system framework and coordinated work on their elimination 6. Identifying key products, value-added products and creating a list of possible experiences 7. Selection of members and their networking and project work 8. Organization of monthly meetings for interactive participation and solving various challenges, with the aim of giving concrete development proposals

CRITICAL SUCCESS FACTORS . Creating a formal basis, rules and obligations for cluster members; . Defining strategic carrier products, to which new products and experiences should be added (proposed within this Marketing Strategy) . Motivation of representatives of the economy and the public sector to participate in joint activities

. Building a mutual trust, taking common positions, planning and lobbying

KEY ENTITIES INVOLVED IN REALIZATION . Tourism organizations and tourism promotion entities from public, private and/or civil sectors;

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. Regional development agencies, or other entities supporting sustainable development operating in the cross-border area (Zaječarski and Montana counties); . Private sector, professionals in tourism sector and other entities, carriers of key tourist offer within member destinations.

5.2. DEFINITION OF MARKETING OBJECTIVES AND STRATEGIC FRAMEWORK

VISION Following the marketing vision of the Balkan Wellness Cluster (BWC) is a concise and inspirational view of the future desired positioning of the destination, the description of what the destination wants to achieve in the next five to ten years. 2025 vision Balkan wellness cluster is an upcoming, wellness European destination, leveraging its natural, historical and gastronomical richness, highlighting the unique mix of healing tradition and authentic appeal with exciting, active and insightful experiences in a pristine natural environment for upocoming generations.

POSITIONING OF THE PROSPECTIVE TOURISM BRAND FOR THE AREA After setting the marketing vision, BWC positioning is defined as an attempt to influence the image of the destination towards regional and international markets. The goal is to achieve a favourable, clear and unique position of BWC in minds of target market segments. By successfully positioning the destination, it becomes possible to differentiate and prefer to the other destinations. The market positioning of the Balkans is defined in the following way: “Rediscover yourself” “Balkan Wellness Cluster is a space of warm-hearted, outgoing and truly hospitable people where everyone feels welcomed and at home. It is a place of extraordinary natural beauty where one can enjoy the healing potentials of destinations based on thermal springs (Sokobanja and Varshets), clean and fresh air, pristine nature, high mountains, blue sky, rivers, lakes and rural environment. The surroundings of the destinations create escapist scenography, challenging their guests to rediscover and get in touch with themselves in a profound and mindful way, using natural riches of the area. This is the place to discover the most diversified local gastronomy of Europe coupled with tasty local wines and strong liquors. Balkan Wellness Cluster is a hidden gem of Europe, an emerging destination that offers privilege of privacy, discovery, peace and safety.”

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5.3. ELMENTS FOR POSITIONING OF VARSHETS - SOKOBANJA AS TOURISTIC DESTINATIONS

The basis for positioning the tourist brand of Varshets and Sokobanja arose from primary research and conversations with stakeholders. In the study, guests and stakeholders were asked to list the differential advantages of Varshets and Sokobanja, i.e., how it is recognized concerning other destinations. The six key differential advantages, in the case of Varshets, were: Crystal clear, fresh air; Peaceful resort in the north of Bulgaria; Mineral baths; Transport accessibility; Various types of attractions for the whole family and Motto of the destination: “Varshets is a city of health!” Perception of stakeholders - Varshets

Source: Results of the workshop, Horwath HTL, 2020.

For the future vision for Varshets, the memebres of the working group see Varshets as a destination with 2 four-star hotels, 1 five-star hotel, 5 holiday villages; with restored and functioning public bathrooms and casino, and implemented projects to improve the overall appeal and offer of Varshets: construction of a lift and a water park, winter sports – vros- country skiing and biathlon, making a shooting range, marathon running, paragliding and expansion of existing cultural calendar. Varshets is a city of health, a true resort for escapists.

In Sokobanja, stakeholders perceive nature, water, air; Stress, managerial illness relief; Hospitality; First accordion; Hiking, cycling and Conquering Rtanj mountaintop as differential advantages.

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Perception of stakeholders - Sokobanja

Source: Results of the workshop, Horwath HTL, 2020. Members of the working group from Sokobanja, set the following vision statement: Sokobanja is a modern tourist destination, popular and attractive to all generations throughout the year, with various attractions and amenities for active vacation, spa & wellness tourism, slow adventure tourism, etc.

5.4. STRATEGIC GOALS OF TOURISM MARKETING

Three strategic objectives have been defined – steering all further tourism development and marketing of two cross-border destinations, with the potential of forming a potential Balkan Wellness Cluster (BWC). Strategic marketing objectives

Source: Horwath HTL, 2020.

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Guided by the vision of tourism marketing in BWC and the identified bases for positioning the tourism brand, four key strategic marketing goals are set which guide the development and implementation of three-set marketing strategies: 1. Increase the number of guests visiting destinations, 2. Increase attractiveness of (both) tourist destinations and 3. Improve overall experience of guests coming to destinations.

5.5. KEY GEOGRAPHICAL MARKETS

вр

VARSHETS Key geographical markets – strong focus of marketing efforts: . Bulgaria (domestic market) . Romania . Serbia . Turkey Markets for further development through adjusted marketing initiatives: . Macedonia . Greece . Germany . England . Isralel Markets to be followed, without significant marketing effort (at the moment): . Finland . Norway . Denmark . Sweden

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SOKOBANJA Key geographical markets – strong focus of marketing efforts: . Serbia (domestic market) . Bulgaria . Countries in the region (Croatia, Bosnia and Herzegovina, Romania, Macedonia, Slovenia) . Greece Markets for further development throgh adjusted marketing initiatives: . Germany . Austria . Russia . France . Sweden Markets to be followed, without significant marketing effort (at the moment): . China . United States . United Arab Emirates

5.6. TOURIST TARGET SEGMENTS

Members of the working group were identified ideal guests for both Sokobanja and Varshets, based on their previous experience and expertise / involvement in tourism business:

SOKOBANJA – IDEAL GUEST A man in its thirties / forties (30-45 years old), with higher spending power, travels with his family, seeks for a quality (hotel) accommodation, uses his own car for traveling, spends around 150 EUR per day. VARSHETS – IDEAL GUEST A lady between 30 and 60 years old, employed, highly educated, has a family, but travels alone for short break / vacation.

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Seven tourist-target segments are identified for two destinations/cluster:

5.6.1. DINKS - Double incomes, No kids DINKS travels a few times in a year to spend quality time together and “charge batteries”.

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5.6.2. EMPTY NESTERS The longevity of life, revitalization and rejuvenation are the main motives that drive Empty Nesters’s travels.

5.6.3. FAMILIES WITH YOUNGER KIDS Families with younger kids travel less frequently, and the main motive is spending quality time together and creating memories.

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5.6.4. FAMILIES WITH GROWNUP KIDS Vacation is a compromise between parents and children's needs - a mix of family atmosphere and entertainment.

5.6.5. GOLDEN OLDIES Mostly travel within organized touring groups or return to the destinations they have visited in the past.

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5.6.6. BACKPACKERS Backpackers strive for adventurous, flexible travels at affordable prices, which will bring new experiences.

5.6.7. MICE (Meetings, Incentive, Conventions, Exhibitions) The primary travel motivation is business, but besides work, they enjoy other resting and entertaining activities.

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Market segments and dispersion of time throughout the year

Source: Horwath HTL, 2020.

5.7. PRIORITY PRODUCTS

To define priority products of the Balkans, which will communicate towards guests, it is crucial to combine their needs and habits and market specifics, attributes, and resources. Based on the previous analysis, TO survey and insight in tourist profile, the following are priority products for the region to focus on in the period by 2022 and beyond. The logics behind selecting priority products was to ensure cross border cooperation and to create such a product that would ensure synergies among countries involved. Every national tourism organization is further encouraged to develop country-specific product portfolio for guests on a national level. Products to be developed on a collaborative approach and among countries are: . Health & Wellness; . Short breaks; . Events & culture; . Touring.

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5.7.1. Health & Wellness Health & wellness is the basis for midterm destination development, as one of the fastest- growing segments.

PRODUCT CHARACTERISTICS

Health tourism is a complex tourist product that includes a large number of specialized facilities and services. The fundamental motivation for a trip is a need to strengthen health and boost the quality of life. Spa/wellness and health are observed in the interrelationship of certain forms of health tourism. The wellness product implies a proactive, integrated approach that should improve guests' quality of life and health at the destination. It deals with disease prevention, giving guests experience and, most often, intangible results. Wellness and spa destinations are built on a concept of overall well- being, with the main task of achieving the health goals, both psychological and emotional, and physical. This is accomplished through specially designed and customized treatments, educations, courses, and training and the promotion of a long-term sustainable healthy lifestyle. In product subtypes' behaviour profile, spa/wellness users have a much greater need for other facilities, especially in terms of culture, events, and enogastronomy.

Required tourism Market potential Key success factors infrastructure . Today, wellness and spa is one of the fastest-growing tourist products globally; . Health – specialized clinics, . According to the most facilities for rehabilitation . Natural and unpolluted recent data from the and (non)invasive medical environment; Global Wellness Institute, treatments; . Quality food and beverage the world wellness . Wellness – wellness hotels, offer; economy consists of ten spaces for mediation and . Specialized sectors, which are valued oriental techniques, support/expertise; at 4.5 billion. USD in 2019, thermal springs, pools, . Quality certificates and with a growth of 7.1% water with healing professionalism; from 2017 to 2019, almost properties; . Management with twice as fast as global . Ensuring unique knowledge of the products. economic growth (3,5%); experiences through . The wellness industry nature. represents 5.3% of the global gross domestic product.

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5.7.2. Short breaks Short breaks motivated by various special interest can be especially valuable product for positioning of both destinations.

PRODUCT CHARACTERISTICS

Short breaks in special interests are closely related to individual special interests (“niches”) of tourists visiting the destination. Guests mostly travel to enjoy some particular interest, whether it is hobbies, physical activity, or interest in a specific topic or destination. Special interest represents a recreational activity occurring in an unusual or wild environment and relates to tourist’s high level of participation in activities, and most commonly happens in the open air. The user expects to experience a certain level of (controlled) risk and/or excitement, while on the other hand, calmness, in which he primarily wants to test abilities in the preferred activity. As a product, it is usually the third vacation in the year, or an additional activity during the main vacation, and lasts between three and five days when it comes to a third vacation, or a day if it is about completing the main vacation. Includes following “soft” activities: camping, hiking, cycling, fishing, hunting, horse riding and bird watching.

Required tourism Market potential Key success factors infrastructure . In the region, average guests who travel for an . A plenitude of resources active holiday are mostly and facilities for outdoor . The kindness of the locals; foreigners, 25-45 years old, activities; . Product packaging in line middle and upper-income . Various accommodation with market needs; classes, and usually stay 2-5 offer; . Offer availability and days; . Information boards and modularity (possibility for . Average travel signalization; tourists to organize their expenditures per trip per . Guided tours and trip on their own fully); person are around 300 excursions; . Transport accessibility; EUR; . Marketing infrastructure – . Destination . The international market is online and offline content image/authenticity; estimated at around 5 targeting different . Advertising in specialized million trips, with segments in accordance magazines/journals. approximately 800,000 to with their interests; 1 million trips only in . Local transport. Europe.

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5.7.3. Events & culture Events & culture are an important part of market positioning for professionally managed destinations.

PRODUCT CHARACTERISTICS

Cultural tourism considers a journey outside of a person’s residence for longer than 24 hours to consume certain cultural content. Events & culture as a product gives travelers an additional and/or exclusive reason to visit a destination. Events can be the decisive factor when deciding on a destination. Events, festivals and cultural attractions provide an excellent possibility for differentiation and affect a higher rate of repeated visits. Events can significantly influence yield management and improve destination image both on domestic and targeted foreign markets - through PR, articles, and reports in specialized journals and on internet portals. By types of events, there are different sub-products: 1) Architecture, museums, galleries, archeological sites, 2) Cultural events (theatre, cinema, festivals, etc.), 3) Music events (concerts, festivals, competitions), 4) Sport events (by type of sports), 5) Special interests (gastronomy, art, etc.)

Required tourism Market potential Key success factors infrastructure

. Quality visitor management . Specially designed system; itineraries; . Internationally attractive . The information available manifestations and events; on the Internet and at the destination; . In Europe, 42% of all . Spaces suitable for events; tourists consume a . Connection of the most . Improving production and particular cultural product significant natural and distribution creativity of during their travel and stay cultural sites; handcrafts and at the destination; autochthonous products; . Use of modern . 40% of all cultural journeys technologies in cultural . A plenitude of are mostly short trips, content interpretation; entertainment, leisure and lasting up to 4 days. sightseeing; . Diverse types of accommodation; . Innovative interpretation of cultural content – . Skilled staff and interpretation and visitor organization; centers. . Destination image.

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5.7.4. Touring Touring can be an important product for the development of Balkan Spas.

PRODUCT CHARACTERISTICS

Touring as a product has two main forms, that is, two main subgroups: 1. Individual touring - Independent touring in a specific area by individual means of transport (by private, rented, or public transport). 2. Group touring - Travellers who want to explore and get to know new areas by socializing with similar interest people. Touring is defined as moving around a certain space to discover and familiarize with various features of that area or follow a specific themed route (culture, nature, gastronomy). Touring is one of the oldest tourism concepts from which tourism eventually developed (big tours in Europe between the 17th and 19th centuries). Touring has to connect segments of offer and pack individual elements into a meaningful and attractive product and connect to global commercialization systems specializing in these products.

Required tourism Market potential Key success factors infrastructure

. Product packaging, . Around 43 million of all according to market needs: trips are touring, i.e., 15- 20% of the European 1. Cultural tours, holiday and leisure market; 2. Nature tours, . . The average travel cost per Quality road infrastructure; 3. City tours, person ranges from 1,100 . River ports; to 1,400 euros; 4. Mixed themes tours, . Intercity connectivity; . Growing demand - the 5. Gastro tours; . Signage and marks; number of arrivals is . Access to essential increasing between 1-3% . DMO; services; per year; . Quality and interpretation . Quality of tourist guides; . Touring can connect all the of cultural content; . Promotion of possible countries in the region and . Quality restaurants - at itineraries; increase synergy tourism competitive countries level. effects. Tours can include . Collaboration with touring top experiences in the agencies; region and rising regional . Value for money; tourism awareness. . Authentic experiences.

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5.8. STRATEGIC MARKETING AND PROMOTION INITIATIVES

To achieve strategic marketing objectives, a list of initiatives to be implemented is given. Each initiative is further implemented through measures that are an integrated group of actions to be performed. There are a total number of 13 initiatives and 27 measures. Linking the strategic objectives with initiatives and measures:

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5.9. STRATEGIC MARKETING OBJECTIVES AND MEASURES

In order to fulfill the vision, the following marketing objectives are set:

5.9.1. Increase the number of guests visiting the destination

“Buy Balkan Spas”

SHORT DESCRIPTION “Buy Balkan Spas" is a working meeting where a limited number of tour operators from target markets are invited to visit destinations with tourist service providers, familiarize and experience destinations. The meeting should have two separate parts: . Tours - where the invited tour operators will participate in the selected sightseeing tour; . Workshop - which will include company presentations and holding commercial meetings using a flexible system of pre-arranged appointments.

KEY ACTIVITIES . Create B2B database that will be updated during the time; . Dedicate a B2B microsite on the main Balkan Spas website; . Ask relevant stakeholders for help (DMCs’, hoteliers, etc.); . Identify TOs’ and TAs’ to invite to the event; . Structure a time-efficient event and convince business partners about destinations’ attractiveness and professional business culture; . Split the workshops and events thematically; . Have a strict timing framework for business encounters; . Follow-up contacts and possible leads and measure result. CONTRIBUTION TO GOAL

“Buy Balkan Spas” event will help close more and better deals, improve destination image at target markets and help relevant stakeholders get to know better destinations in the cluster.

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Cooperative marketing

SHORT DESCRIPTION Cooperative marketing includes cooperation agreements with TOs and other stakeholders on selected target markets to implement joint promotional actions. The main goal is to multiply the available (limited) promotional budget by joining forces with partners who are interested in promoting Balkan Spas to sell more arrangements, such as, for example, the case with tour operators/agents.

KEY ACTIVITIES

. Creation of appealing advertising campaign for both traditional and digital media; . Tour operators’ advertising campaign dedicated to Balkan Spas in mass and digital media, or media specializing in special interests; . Increasing the number of pages devoted to Balkan Spas in the main brochure of tour operators; . Presentation of special interest products offered by the destination in the brochure of tour operators; . Actions carried out by direct e-mail to current tour operators’ clients, to present Balkan Spas special offers.

CONTRIBUTION TO GOAL

Cooperative marketing will enable reaching a significant number of potential guests and raising the awareness about destinations through traditional and digital promotional activities carried out by tour operators.

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FAM trips

SHORT DESCRIPTION FAM trips are educational trips for TAs from target markets and congresses organizers, incentive companies and other tourism agents. FAM trips are usually organized by national, regional, or city TOs in cooperation with local entrepreneurs and tour operators who can contribute financially or provide services (e.g., accommodation, transportation, dining in restaurants, etc.). Each trip should focus on one group (TAs, TOs or congress organizers) due to different interests and needs. In order to facilitate the adequate learning experience, group size should be limited to a maximum of 15 persons per trip.

KEY ACTIVITIES . Decide on the number and list of participants; . Meet different local stakeholders to analyze their interests and possibilities to join the program; . Plan the organization of FAM trips carefully, make them experiences themselves, not site visits; . Align FAM trips content/organization with tourism products and seasons; . Execute the FAM trip . Feedback and measure effects (gained knowledge about Balkan Spas, before and after image, sales development).

CONTRIBUTION TO GOAL

FAM trips should result in a higher willingness of TAs’ and TOs’ to include Balkan Spas in their tourist offer, thus ensuring better visibility towards potential travelers and increasing the number of arrivals.

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Image campaign

SHORT DESCRIPTION Balkan Spas should implement the image campaign through traditional media that communicates and supports selected positioning, emphasizing those attributes that differentiate Balkan Spas from the region. The image campaign's focus is mainly on advertising sites in traditional media on selected target markets such as ads in print and electronic media.

KEY ACTIVITIES

. Hire a creative agency; . Create a campaign brief indicating the campaign purpose and primary goals; . Define the start and end date for the campaign; . Align the main messages with key products, season and brand; . Create promotional materials; . Create content (visuals and videos); . Launch the campaign; . Monitor campaign results; . Adjust the campaign according to monitoring results.

CONTRIBUTION TO GOAL

The image campaign aims to communicate Balkan Spas as a tourist destination to create a general awareness of potential tourists and improve the image of the destination.

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Digital campaign

SHORT DESCRIPTION Digital online campaign will be a call to action and focus on the summer season, communicating main tourism products and considering all brand- related activities. It will combine SEO, AdWords, and social media campaigns. The digital ad campaign's focus will be on presenting Balkan Spas to younger target segments such as DINKs and Families with younger kids who are reachable mainly on digital. KEY ACTIVITIES

. Hire a digital specialist to create and execute a campaign; . Develop social media accounts (Instagram, Twitter and Facebook); . SEO and Google AdWords campaign; . Create a campaign brief indicating the campaign purpose and main goals; . Align the main messages with key products, season and brand; . Create digital content (videos, visuals and copyrights); . Link the content to the website and all social media accounts; . Launch the campaign; . Monitor campaign results.

CONTRIBUTION TO GOAL

The ad campaign will send relevant marketing messages, ensure better visibility, increase traffic on the website/social media accounts, and, with its call to action, increase the number of guests.

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5.9.2. Increase attractiveness of (both) tourist destinations

Destination branding

SHORT DESCRIPTION Destination branding is a process of developing a unique brand identity and personality of a tourism destination that will distinguish it from competitors. Brand creators will assess current destination perception and create a mix of brand elements to identify and differentiate the destination through positive image building. As a result, the destination brand will provide differentiation of destination from the competition, a consistent look that all stakeholders can continuously use, and a way to communicate destination’s uniqueness to tourists.

KEY ACTIVITIES

. Explore current image of destination among locals and guests; . Identify unique features of destination (landmarks, events, natural beauties, gastronomy, etc.) . Develop destination branding platform (set of brand elements that will present destination in the best way and create a desirable image) . Provide detailed guidelines for using brand . Create a brand book (book of standards) . Educate stakeholders on how to implement destination brand . Monitor brand using

CONTRIBUTION TO GOAL

Destination branding is an essential step in creating Balkan Spas, because it will provide a means for raising the awareness about the destination and provide foundations for communication.

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Promotional materials

SHORT DESCRIPTION Promotional material should be physical support for the brand, made in different shapes and sizes, mainly distributed at fairs and exhibitions, on special presentations to potential tourists, TAs and TOs. All promo material needs to be aligned with Brand book guidelines, use the identified symbols and provide added value.

KEY ACTIVITIES

. Define promotional material set; . USB containing TV commercials, brochures, photo and video bank, music, pre-prepared texts for journalists to use, contact information, etc; . Brochures (flyers) should be highly emotional, attractive and innovative designs, shapes and sizes; . Limited poster series, which is updated every year with quality photos; . Unique souvenirs like bottled destination(s) water compasses, portable discs, raincoats, etc. . Local products labeled under Balkan Spas presenting producers of food and wine. . Hire a professional designer to create it; . Distribute promotional material.

CONTRIBUTION TO GOAL

Promo material has a dual role: to remind stakeholders about destination due to create awareness and to have a functional purpose in everyday life.

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Digital toolkit

SHORT DESCRIPTION The digital toolkit represents a set of online customer touchpoints, primarily website and social media accounts, which are used to communicate with travelers and establish the destination's online presence. Social media's primary goal is to create digital relationships with travelers and enable them to establish direct communication with destination, pose any question, and get information about the destination in real-time.

KEY ACTIVITIES

. Hire a web page developer/marketing/creative agency . Give input for the web page content . Launch the web page using the latest trends and best examples . Monitor website traffic . Create accounts on social media (Facebook, Twitter, YouTube, Instagram) . Create content and share it regularly; . Expand digital community; . Community management; . Conduct social listening and set up customer service on a social media platform; . Monitor social media performance and results (likes, comments, shares...).

CONTRIBUTION TO GOAL

The digital toolkit is designed to create digital awareness of the brand and give online support as part of an integrated marketing strategy.

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#BalkanSpas

SHORT DESCRIPTION

#BalkanSpas is a working title of a campaign that brings social network bloggers and authors together to invite them to stay in the destination and promote it under the unique hashtag.

KEY ACTIVITIES

. Define the number of influencers, open/send invitations, revise submitted applications, select and contact top influencers . Create a list of influencers . Define sponsorship needs of the campaign (air tickets, cars…) . Contact and choose the best strategic partners . Define project microsite needs and content . Hire a professional web developer, give input and desired result . Set campaign goals, define the target audience and topics/activities/experiences/events that will be covered . Support and coordinate influencers during their visit/set itinerary . Manage created content and repost it on social media . Follow up the results of planned itinerary/experience

CONTRIBUTION TO GOAL Influencers promote the country and its top tourism products and experiences through authentic and credible ways closely connecting with destinations.

Note: #BalkanSpas is not the creative title nor the suggested hashtag of the campaign. Before the launching, it should be defined to ensure their recognizability and user-friendliness, searchability, etc.

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PR and advertorials

SHORT DESCRIPTION

PR and advertorials communicate messages related and in line with the established Balkan Spas brand and effectively support other sales and marketing activities.

KEY ACTIVITIES

. Define PR content . Look for a competitive, specialized PR agency . Test the PR agency with a travel PR content . Select the best PR agency . Involve PR agency in brand communication activities . Select a topic to be written about (tourism product, experience…) . Hire a professional travel writer/freelance writer/photographer . Give detailed input and desired results . Edit or improve the advertorial before publishing . Publish the editorial . Distribute the editorial to main points of interest

CONTRIBUTION TO GOAL PR and advertorials will support the existing marketing tools and ensure an even better understanding of the destination's tourism offer.

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5.9.3. Improve the overall experience of guests

Value design

SHORT DESCRIPTION

The value design is the product development initiative that defines a complementary set of experiences connected to each of the identified primary tourism products.

KEY ACTIVITIES

. Research, evaluate, and categorize the most attractive places and activities at the destination for travelers during the season; . Create different touring options in terms of theme and duration; . Provide all vital service information at one place both online and on the ground – Visitor center; . Facilitate the communication between TAs and local stakeholders; . Develop precise NTO support functions for every product; . Communicate the offer to TOs’ and TAs’ representatives; . Encourage the TOs’ and TAs’ to actively offer the Balkan Spas; . For individual touring, integrate all options in different touring options and suggest optimal duration, place to visit, sleep, eat,… . Provide information for extending the trip to neighboring destinations (accommodation, places to see, events to visit..; . Integrate all the offer into the new webpage and printed materials; . Promote those experiences via PR, ad campaign and advertorials.

CONTRIBUTION TO GOAL

The value design will contribute to the guest experience as it will ensure all necessary information and create packages of experiences ready to be marketed and sold.

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Media library

SHORT DESCRIPTION

The Media library represents a simple, self-explanatory and attractive overview of tourism products that will be available on priority target markets displayed through photos, videos and innovative VR experiences. Through innovative ways of destination presentation, potential guests will be able to connect and get to know destination even before they have visited it.

KEY ACTIVITIES

. Select primary tourism products and experiences to be displayed in the media library through photos, videos and VR; . Choose the top 5-10 experiences to be translated to VR; . Hire a professional photographer/video making company/VR producer; . Give input for photos, video recording and its desired effects/messages as well as for 360-degrees photos/videos; . Take photos, record videos and 360-degrees photos/videos; . Give feedback and perform alterations if needed; . Upload photos, videos and VR experiences to the media library; . Develop smart links that lead visitors from a web page/social media to VR videos.

CONTRIBUTION TO GOAL

The Media library ensures that travelers are introduced to main tourism products and experiences and helps them visualize the experience and inspire them to visit destinations.

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Printed materials

SHORT DESCRIPTION It is necessary to prepare two types of main printed materials in selected languages – Experience Balkan Spas and separate destinations wimed fatindividuals to plan their trip. Brochure experience Balkan spas presents offers, resources and attractions, while the one for separate destinations presents detailed descriptions of available tours, a calendar of events, road maps and hidden secrets. The materials are distributed through TO’s and TA’s as well as TIC in destinations.

KEY ACTIVITIES

. Create one general brochure – Experience Balkan Spas – to increase awareness; . Create separate brochures for each destination to help individuals plan their trip; . Provide examples of different touring options connected with main motives and interests as well as seasons; . Provide key service information, suggest options based on duration, what to see, what to do, etc.; . Provide a clear and concise description of each tour; . Distribute the brochures through TO’s and TA’s as well as local TIC.

CONTRIBUTION TO GOAL

Printed materials help build brand awareness and recognition and are often used to attract customers and eventually book the trip/excursion/tour.

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This publication has been produced with the assistance of the European Union through the Interreg-IPA CBC Bulgaria-Serbia Programme CCl N0 2017TC16I5CB007.The contents of this publication are the sole responsibility of the Horwath HTL and Tourism Organization of Sokobanja and can in no way be taken to reflect the views of the European Union or the Managing Authority of the Programme.

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