Quality Standards and Measures Required to Improve the State of the Tourism Industry in the East German Federal States Final

Home , Mecklenburg

Quality Standards and Measures Required To Improve the State of the Tourism Industry In the East German Federal States

Final Report

Executive Summary

Research Assignment Z 6 – 10.08.06.1.17

Submitted by:

The Prof. Dr. Albrecht Steinecke, Prof. Dr. Heinz-Dieter Quack & Dipl.-Geogr. Peter Herrmann Study Group

Paderborn/Goslar/Trier

November 2004

Research project commissioned by the German Federal Office of Construction and Regional Planning, Bonn

conducted by:

The Prof. Dr. Albrecht Steinecke, Prof. Dr. Heinz-Dieter Quack & Dipl.-Geogr. Peter Herrmann Study Group

with the collaboration of

Aline Albers, M.A. Dipl.-Geogr. Matthias Beier Dipl.-Geogr. Daniel Demler Dipl.-Geogr. Miriam Dubois Dipl.-Geogr. Nicole Wittersheim

Research Assignment Z 6 – 10.08.06.1.17 ______

Preface

In May 2004, within the scope of the "Aufbau Ost" ("Rebuilding of East Germany“) project coordinated by the German Federal Office of Construction and Regional Planning (BBR), the undersigned were asked to conduct a research project on the "Quality Standards and Meas- ures Required to Improve the State of the Tourism Industry in the East German Federal States (Z6 – 10.08.06.1.17)“. The project focused on the following questions:

1. Which mutual interactions between the factors that determine how tourism develops led to the current situation?

2. Taking particular account of price/performance ratios, which quality standards are relevant to which target groups, both at present and in the future?

3. What measures, or packages of measures, are taking effect in which regions, and for which target groups?

From the very start, the client and contractor were in agreement that a complex project of this nature could only be successfully conducted on the basis of ongoing, trustful feedback between all the project partners. The authors would therefore like to express their particular gratitude to Dr. Maretzke (BBR Bonn) and Mr. Mattern (Federal Ministry of Transport, Build- ing and Housing (BMVBW), Berlin) for their trust and constructive participation in the project's success.

Paderborn/Goslar/Trier, November 2004

Prof. Dr. Albrecht Steinecke

Prof. Dr. Heinz-Dieter Quack

Dipl.-Geogr. Peter Herrmann

______

Arbeitsgemeinschaft Prof. Dr. Albrecht Steinecke; Prof. Dr. Heinz-Dieter Quack & Dipl.-Geogr. Peter Herrmann Geheimrat-Ebert-Straße 8 D-38640 Goslar

Research Assignment Z 6 – 10.08.06.1.17 1 ______

1 Assignment

All over the world, tourism is considered to be a growth market that has great significance for regional development. In some East German regions, tourism has now become one of the most important branches of the economy. Within the framework of this project, an investigation was conducted into the connections between general underlying conditions, the development of tourism thus far, and the standards of quality that are required in the future.

Deficiencies in the supply and marketing of East German destinations have already been identified, which represent possible starting points for measures that could lead to improve- ments in the following areas:

- service quality (hospitality, cleanliness, safety, food),

- infrastructure facilities oriented to specific target groups,

- strengthening of "green" (sustainable) tourism,

- price/performance ratios in hotel and restaurant facilities.

However, in order to design measures for improving standards that are specific to certain target groups and regions, it is essential that a systematic analysis be performed of the connections between the general underlying conditions, the development of tourism thus far, and the standards of quality that are required at present and in the future.

Against this backdrop, the following key questions emerge within the research context:

- Which mutual interactions between the factors that determine how tourism develops (natural/geographical circumstances, trends in demand, measures undertaken by public authorities and/or the business community) led to the current situation?

- Taking particular account of price/performance ratios, which quality standards are relevant for which target groups, both at present and in the future?

- What measures, or packages of measures, are taking effect in which regions, and for which target groups (development thus far, current situation and future potential)?

2 Methodical Approach

In order to analyze this complex relationship of cause and effect, a sample-based approach was chosen, in which four regions are used as case studies. The key criteria for selection were derived from the project assignment itself: specifically, an East-West comparison and a comparison between a successful and a less successful market approach. In order to repro- duce general trends in German tourism (growth on the coast, launch of new regions), two different natural/cultural environments were considered. In order to minimise the influence of additional factors, care was taken in making the selection to ensure that the destinations re- semble each other in as many aspects as possible. The following regions were selected as case studies:

______

Arbeitsgemeinschaft Prof. Dr. Albrecht Steinecke; Prof. Dr. Heinz-Dieter Quack & Dipl.-Geogr. Peter Herrmann Geheimrat-Ebert-Straße 8 D-38640 Goslar Research Assignment Z 6 – 10.08.06.1.17 2 ______

- the Baltic Sea (Schleswig-Holstein) tourist region, as an example of a coastal region in one of the pre-reunification West German federal states, which has noted a medium-term decline in numbers of overnight stays,

- the Mecklenburg Baltic Sea coastal tourist region (Mecklenburg-Western Pomera- nia), as an example of a coastal region in former East Germany, which can look back on a successful growth in demand in the 1990s,

- the Saarland tourist region, as an example of a former industrial region in pre- reunification West Germany, which is successfully exploiting its potential,

- the Niederlausitz (Brandenburg) tourist region, as an example of a former industrial region in the former East Germany, which has so far posted sluggish occupancy rates.

The degree to which the significance of tourism varies from region to region is clearly shown in an initial examination of tourist frequency (overnight stays per inhabitant).

Tourist Frequency for the Regions under Examination (2003)

20 18.1

15 10.0 10

4.0 5 1.9 1.3 Overnight stays per inhabitant 0 Niederlausitz Saarland FRG Balt. Sea SH Balt. Sea Meck.

Source: authors' own calculations based on data from the SAARLAND STATISTI- CAL OFFICE, the Brandenburg State Office for Data Processing and Statistics, the STATISTICAL OFFICE FOR HAMBURG AND SCHLESWIG-HOLSTEIN, and the MECKLENBURG-WESTERN POMERANIA STATISTICAL OFFICE, 2004

Specifically, the analysis was conducted in the following stages:

- Analysis of quantitative trends (supply and demand) in the selected regions based on type of accommodation, occupancy rates, number of overnight stays, visitor arri- vals and origin, and tourist frequency (overnight stays per inhabitant).

- Analysis of the market approach taken by the regional tourist organisations through a systematic evaluation of brochures, catalogues and Internet homepages.

- Evaluation of other sources of information: range of development/promotional activities, DEHOGA classification in the hotel sector, tourism concepts, policy guidelines, etc.

- Expert interviews: using a semi-structured questionnaire, one-on-one interviews were conducted with 20 experts in the regions to discuss a range of topics.

- Expert workshop: at a joint workshop, the interviewed experts elaborated numerous proposals for measures, which, within the scope of the research assignment, would seem to be suited to strengthening the competitive position of the East German tourist regions.

- The extent to which the results of the analysis of the regions considered here are transferable to other tourist regions in the former East German states was investi- gated through a comparison of characteristic features using meaningful indicators. Moving beyond the rankings calculated from this, the regions were subsequently subjected to a cluster analysis, in order to define groups of tourist regions with similar structural features that were as homogenous as possible.

3 Summary of Results

• Development of Tourism in the Regions – Figures, Facts, Data

The statistical data clearly illustrates how the significance of tourism in the regions varies. The last few years have seen some very diverse trends. In Saarland, the negative impact of the healthcare reforms on health spa tourism was largely compensated for by other segments in subsequent years. In small tourist regions such as Niederlausitz, it is possible to see just how strongly development depends on individual businesses and market segments (camping) and how sensitively demand can react to exogenous factors (catastrophic floods). Over the last few years, Niederlausitz has been one of the few East German tourist regions to show a declining trend, though admittedly on a very minor level. Both of these tourist regions are primarily destinations for short trips, though in Saarland business travel and con- ference tourism are also important.

The situation on the Mecklenburg-Western Pomerania Baltic Sea coast is completely different. The reunification of Germany opened up a long-established travel destination to West German holidaymakers, the coast of which is almost four times as long as the coast between Flensburg and the Bay of Lübeck. Supply and demand have both notched up strong rates of growth over the last 10 years, though these figures are now gradually flattening off on a high level. Tourism in this region has meanwhile become one of the key economic factors. The boom on the East German Baltic Sea coast stands in contrast to a trend characterised by moderate upward and downward fluctuations on the Schleswig-Holstein coast. This can be traced back to the health spa crisis (healthcare reforms), but also presumably to a slight shift- ing of market share in favour of the East German Baltic Sea coast. Over the last three years, demand has stabilised. On a qualifying note, it is important to mention that the so-called "grey market" (the parts of the hospitality industry that are not statistically recorded) is highly significant, especially in Schleswig-Holstein; changes in supply and demand can therefore only be demonstrated through special investigations/surveys.

The influence of exogenous factors also makes itself felt in traditional tourist regions such as the Baltic Sea. Although the extremely hot summer of 2003 caused many people (above all those who had left their holiday planning to the last minute) to head for the spa towns, the rainy summer of 2004 did not see the same level of demand from these visitors. The stag- gered German summer holiday arrangements had less of an effect on these two areas than on comparable destinations, such as the North Sea, for example.

______

• Quality Standards and Price/Performance Ratio

With regard to standards of quality in the hotel industry, the traditional, heavily-frequented destinations on the Baltic Sea come off better than Saarland and Niederlausitz. Presumably, an overall higher degree of professionalism on the part of the service providers and the importance of the sector in a fiercely competitive market tend to increase the willingness to participate in quality assurance activities.

Regarding price/performance ratios, the only aspect where serious differences can be ascer- tained is with regard to holiday homes and apartments in the summer holidays. Higher prices for modern accommodation and seasonally-based pressure of demand apparently justify this difference. In contrast, in the Niederlausitz, the price/performance ratio appears to be com- paratively unfavourable.

The Niederlausitz is also the worst performer when it comes to a comparison of gastronomic issues (provision of upmarket, high-quality cuisine), as measured against the number of inhabitants.

The quality of service offered by tourist information offices can be rated as good to satisfac- tory in all regions. There are only a few points for each region where expectations have to be somewhat lowered.

• The Market Approach of the Regions

All the regions can be certified as having a thoroughly professional market approach. Gener- ally accepted standards of quality are adhered to in the communications mix. One point that would tend to be viewed more negatively from a customer's point of view concerns the frag- mented marketing structures on the Mecklenburg-Western Pomerania Baltic Sea coast. In this respect, there are also some clear differences in the quality of individual regions' market approaches. As far as this issue goes, the East German coast fares significantly worse than the Schleswig-Holstein Baltic Sea coast. Nevertheless, the present marketing structures do not (yet) appear to have had an impact on demand.

• Tourism Concepts

All the regions work on the basis of development and marketing concepts that are oriented towards the medium to long term. An evaluation of the quality of the contents and the orien- tation of the implementation of these concepts did not form part of this analysis. Inspection of the concepts did, however, provide an indication as to whether identifiable, long-term trends were reflected in region-specific and target group-specific strategies and measures.

• Trend Analysis

Globalisation, obsolescence, changing values, mobility and mass leisure time are generic trends that permeate many areas of life. Tourism, too, will be seized and altered by these trends on various levels in the medium to long term. Currently, tourism researchers are en- gaged in an intensive debate on what concrete effects this will have on the travel industry. The extent to which forecasts and trend statements apply to a specific tourist region has to be separately examined for each individual case.

Based on the expert interviews that were conducted, and the evaluation of the regional tourism concepts, it can be stated that both East German regions have already covered numer-

Arbeitsgemeinschaft Prof. Dr. Albrecht Steinecke, Prof. Dr. Heinz-Dieter Quack & Dipl.-Geogr. Peter Herrmann Geheimrat-Ebert-Straße 8 D-38640 Goslar Research Assignment Z 6 – 10.08.06.1.17 5 ______ous factors for future success, or have at least taken them into account in their respective guidelines and strategies for the future.

• Results of the Expert Interviews

In the experts' opinion, the Baltic Sea regions considered in this analysis feature similar strengths and weaknesses, as do the Niederlausitz and the Saarland. The key positive points that link the Baltic Sea coasts of Schleswig-Holstein and Mecklenburg-Western Pomerania are: destinations with a wealth of tradition, a high degree of popularity, and an attractive landscape. In contrast, the Saarland and the Niederlausitz are only just embarking on tourist development: the greatest challenges they face in developing themselves as tourist regions are a low degree of popularity as a destination, and the image of industrial regions set in an unremarkable landscape. In terms of the pitch made to target groups, there is a largely equivalent degree of coverage between the regions in the East and the West.

The principal differences between the East and West German tourist regions lie in the variety and quality of the cuisine on offer. In this regard, the West German regions perform better. The leisure infrastructure on the Mecklenburg-Western Pomerania Baltic Sea coast and in the Niederlausitz is viewed as still ripe for development. The infrastructure in the Saarland and on the East German Baltic Sea coast is rated more positively with regard to "modern facilities" than in the other two regions.

The East German tourist regions themselves rate the efficiency of their organizational and marketing structures slightly more positively. When we examine the regions' market approaches, there is, however, a certain degree of inconsistency. For example, in Mecklen- burg-Western Pomerania, we find a large number of organisations, whose spheres of re- sponsibility partially overlap. In contrast to the West German regions, the tourist regions in the former East Germany actually benefit from not having to establish themselves on the basis of encrusted political structures. Yet a critical point that must be called into question is the marketability of small tourist regions such as the Niederlausitz. Even though such regions and their marketing organisations can certainly be defined as having a professional market approach, it nevertheless seems more than questionable whether these regions can really establish themselves in the medium to long term as independent, recognisable brands in the tourist market. Limited funds for marketing should probably drive some regions, particularly smaller ones, towards a more serious consideration of strategic alliances with neighbouring regions.

The problematic situation of the restaurant and hotel industry is similarly pronounced in both the West German and East German tourist regions. A lack of creditworthiness combined with a weak equity position and stricter lending guidelines do not constitute a good basis for a restaurant and hotel industry characterised by small and medium-sized enterprises, which is also subject to severe seasonal fluctuations, to function successfully in the marketplace. In this respect, the experts tend to assume there will be an increasing number of bankruptcies in the industry. Now that redemption-free periods have run their course, many founders of businesses, particularly in East Germany, are confronted with cash flow problems, which in many cases cannot be bridged due to poor equity positions. In contrast, West German businesses are often confronted with the problem of management continuity. Furthermore, increasingly cutthroat competition is aggravating the economic situation of the restaurateurs, caterers and hoteliers in both the East and the West. Increasingly, even the larger, more eco- nomically sound companies are being gripped by this generally observable market trend.

______

Offers of courses by the German Chamber of Commerce and Industry (IHK) and the German Association of Hotels and Restaurants (HoGa) to improve qualifications for restaurant and hotel service providers have met with little response. Cost, time pressure and lack of motiva- tion were all cited as reasons, though the providers of training and qualification services have in fact long been confronted with this problem.

When it comes to tourism development, great importance is attributed to the activities of the public authorities in all regions. One frequently-heard demand, especially from the East German tourist regions, is for a greater commitment to marketing, whilst the regions in the former West German federal states complain of being put at a disadvantage with regard to regional development grants and argue for more vigorous promotion of private enterprise investment and infrastructure.

Sustainability and environmental factors are, of course, nowadays considered to form an integral part of a future-oriented tourism policy in all the areas under consideration; they are therefore reflected in the corresponding tourism concepts. Although some isolated deficiencies were still in evidence for certain areas, there were no indications of any significant differences between environmental standards in the individual regions.

The experts from all four regions consider high-quality services and good infrastructure facilities to be key factors to ensure success in the future. The range of development aid has a prominent role to play, particularly on the Schleswig-Holstein coast, while, in the East Ger- man regions, the hospitality of the local inhabitants tends to be more heavily emphasised.

• Results of the Expert Workshop

The participants in the external workshop agreed both with the course of the investigation and with the results, conclusions and consequences established so far.

They established that only minor differences remain in the basic provision of tourism services and in market approach that are specific to the partition of Germany. These relatively minor differences are particularly in evidence in relation to accommodation infrastructure, hiking trails and cycle routes, and reception arrangements (tourist information). Although it is certainly possible to identify differences in the quality of the market approach (Internet presence and print media) of individual marketing organisations, it is not possible to interpret this as being specific to partition and to generalize it.

Specific East German impediments and deficiencies, which can be explained through regional distinctions and the historical background, as well as through the partition issue, tend to lie in the areas of leisure infrastructure (lack of variety) and the restaurant/catering business (lack of variety and quality).

The essential, pressing problems of the tourism industry can be identified to a largely similar degree in both East and West. The areas that require urgent action are the economic status of the restaurant and hotel industry, the quality of, and disposition towards, service by the tourism service providers, and the awareness of tourism among the inhabitants of the tourist regions.

• Transferability of Results

A key component of the research project was to verify whether the results obtained in the regions under examination could be transferred to other regions. The knowledge gained dur- ing the course of the project initially suggests that what is involved in this case is more an issue of generally applicable results for German tourist regions than of results specific to certain regions. Consequently, the question arose as to how to identify comparable tourist regions.

For this purpose, a model was developed to identify and evaluate the development status of individual tourist regions, based on which it is possible to describe how regions rank up rela- tive to each other, both on an overall basis, and with regard to individual criteria.

Based on several meaningful and weighted indicators, this enabled us to arrange the 38 tourist regions of the former East German states into a ranking list reflecting their positions with regard to market dynamics, market position, quality standards and leisure infrastructure.

In the next step, a cluster analysis was V relaunch used to form groups of regions with dynamic similar characteristic features that were IV stagnation as homogenous as possible. Finally, III consolidation VI downturn this method enabled us to rank individual tourist regions in accordance with II expansion the lifecycle model of typical develop- I market entry t ment phases.

______

Development phases of East German tourist regions

Ostsee

Rügen/ Hiddensee

Schleswig- Vorpommern Holstein

Mecklenburgische Ostseeküste Mecklenburgische Schweiz und Seenplatte

Westmecklenburg

Uckermark Prignitz Ruppiner Land Barnimer Land

Altmark Märkisches Havelland Oderland Berlin Potsdam Polen Niedersachsen Dahme- Oder-Spree- Magdeburg Seen Seengebiet Elbe-Börde-Heide Fläming gebiet

Spreewald Anhalt-Wittenberg Harz und Harzvorland Elbe-Elster- Niederlausitz Land

Nordthüringen Leipzig Halle-Saale- Oberlausitz/ Unstrut Sächsisches Sächsisches Niederschlesien Burgen- Elbland Hessen und Heideland Thüringer Dresden Kernland Ost- Sächsische thüringen Schweiz Chemnitz Saaleland West- sachsen Erzgebirge

Thüringer Wald Vogtland

Tschechische Republik market entry expansion consolidation relaunch Bayern 02550100 km stagnation

downturn Kartographie Aline Albers 2004

• Recommendations for Action

This study has shown how strongly the Mecklenburg-Western Pomerania coast is already affected by tourism, whilst the Niederlausitz is only just embarking on its tourist development. The two regions are representative of other East German tourist regions with similar structural features and development trends. Furthermore, the method of analysis used has enabled additional tourist regions to be assigned to the different phases of the tourist lifecycle of a region. In each phase, specific requirements are made on marketing, organizational structures, and general underlying conditions.

Tourism is a cross-sectional task, in which a multitude of players participate in a collaborative process. Alongside the commercial service providers that furnish the basic tourist services, political institutions and associations are required to create the general underlying conditions that are necessary to enable tourism to develop its economic and spatial-structural dimen- sions. This necessitates a distribution of tasks among the various players, which is harmo- nised and coordinated at all levels. The key tasks are defined by the respective lifecycle phase, in which the individual region is currently situated.

The key tasks of the government and the federal states (with regard to key areas of development aid) mainly lie in the spheres of infrastructure and general conditions. These include the following measures: ¾ development of a target group-oriented supply of overnight accommodation, ¾ development/consolidation of the network of hiking trails and cycle routes, ¾ establishment of large-scale holiday and leisure projects, ¾ implementation of generally applicable quality guidelines anchored in the development policy, ¾ availability of venture capital for the restaurant and hotel industry. Although these measures predominantly take priority in the market entry and economic downturn phases (market development strategy), they are also important in the relaunch phase (differentiation strategy).

On a regional and municipal level, the tasks revolve more heavily around the organizational level and marketing (internal and external marketing). The individual measures require urgent implementation in phases of stagnation, economic downturn and relaunch.

Thanks to their contact to the service providers, the greatest contribution that can be made by associations and chambers is in relation to professionalism and quality assurance. Meas- ures that must be continuously developed and implemented include ensuring the availability of attractive offers to provide training and boost qualifications, as well as organising events to promote tourism awareness. Based on the proposed measures elaborated within the scope of the expert workshop and typical weaknesses in specific development phases, a catalogue of sample measures was developed with indications of priorities and responsibilities.

______

Catalogue of Measures

Highest Priority Sphere Measures (examples) in Phase(s)

Convert destination/regional management into professional organisations III, IV, V, VI

Investigate the privatisation of municipal/regional and national institutions IV, V, VI

Combine regions into competitive, larger-scale spatial units IV, V, VI Improve the quality of tourist information services (certification under the German III, IV, V, VI

Organisation ATIS system of accredited tourist information offices) Form alliances with partners from the business community IV, V, VI

Develop a target group-oriented supply of accommodation II, III, V, VI

Expand the range of available leisure activities (culture, sport, games, etc.) I, II, V, VI

Develop/consolidate network of hiking trails and cycle routes I, V, VI Promote the establishment of large-scale holiday and leisure projects in suitable I, V, VI

Infrastructure locations (investment aid) Investigate possibility of integrating leisure amenities with public transport facilities IV, V, VI

Define and communicate unique selling points I, IV, V, VI

Promote and encourage hotel classifications I, IV, V, VI

Conduct theme-based marketing IV, V, VI

Perform ongoing market inquiries (visitor surveys) III, IV, V, VI Marketing Establish efficient, customer-friendly IRS and CRS II, IV, V, VI

Open up new markets (in other countries) IV, V, VI

Intensify public relations and marketing (local media) I, IV, V, VI

Establish special image brochures for internal marketing I, IV, V, VI Conduct events (workshops, podium discussions, lectures, excursions) on the I, IV, V, VI subject of tourism for different target groups (politicians, citizens, retail trade, etc.) Offer seminars/coaching for service providers I, IV, V, VI

Internal Marketing Ensure the importance of tourism is stressed even from school age (e.g. develop I, IV, V, VI specific teaching units/lessons for different types of schools)

Implement generally applicable quality guidelines I, II, III, IV, V, VI

Anchor quality guidelines (environment, service) within development policy I, IV, V, VI

Run competitions on the topics of product and service quality I, IV, VI

Establish venture capital funds for the restaurant and hotel industry I, IV, V, VI

Promote consulting services for the restaurant and hotel industry (grants) I, IV, VI

General Conditions General Make training and qualification services more attractive to service providers I, IV, VI Promote village renewal and enhancements in the appearance of towns and other IV, V, VI locations

Arbeitsgemeinschaft Prof. Dr. Albrecht Steinecke, Prof. Dr. Heinz-Dieter Quack & Dipl.-Geogr. Peter Herrmann Geheimrat-Ebert-Straße 8 D-38640 Goslar