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Encouraging Tourism Development Through the EU Structural Funds

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Encouraging Tourism Development Through the EU Structural Funds Encouraging Tourism Development Through the EU Structural Funds – the implementation of EU programmes on Bornholm and the tourism sector's use of them Benedicte Bull Research Centre of Bornholm/Bornholms Forskningscenter Stenbrudsvej 55 DK-3730 Nexø, Denmark Tel.: +45 56 44 11 44, Fax: +45 56 49 46 24 E-mail: [email protected] Copyright: © 1998 Bornholms Forskningscenter, and the author. No part of this report may be reproduced, stored in a retrieval system or transmitted in any form of means electronic, mechanical, photocopying, recording or otherwise, without prior written permission by Bornholms Forskningscenter. Brief textquotations are exempted for review, press and academic purposes. ISBN 87-90144-74-0 ISSN 1396-4895 September 1998 Preface European integration has given rise to a set of challenges to European peripheral areas, but also opportunities and benefits for certain sectors, among them, tourism. Bornholm has had success in attracting considerable funds to the local tourism sector from the European Structural Fund. This report takes a closer look at how Bornholm has managed to bring in these funds from the EU, how they are spent in the tourism industry, and to what extent they have alleviated the problems faced by the tourism sector on Bornholm in the 1990s. Evaluating the effect of support programs in the tourism sector is a complicated task. The complexity of the sector and the vulnerability to external determinants are two out of many factors which make it difficult to evaluate programs on pre-defined criteria such as number of jobs created or number of additional tourists attracted. This report takes as the starting point the obstacles to tourism development on Bornholm as they are viewed the tourism industry. Taking the perspective of the local actors, the study further attempts to understand the demands placed on the agencies responsible for implementation of the programs at the local level, and the impact of their performance with respect to the successes and failures of the funds in encouraging tourism development. This report is not a presentation of numbers; it does not attempt to estimate the economic impact of the funds in the tourism sector. The aim is rather to give an account of how the tourism industry experience their encounters with the EU system, and to what extent programme funds affect their struggle to survive in the tourism sector in a peripheral area of Europe. The report has attempted to give a balanced, but honest, picture of the various experiences of different operators. As such, it complements evaluations made on more economic criteria, and should provide a valuable input for policy makers at the local, national and EU level, as well as operators in the tourism industry considering the opportunities found within the EU system. Svend Lundtorp Bornholms Forskningscenter September 1998 Authors Preface On my numerous visits to farms, hotels and public offices connected to the work in this report, I was often met with the question: What is a Norwegian woman doing studying EU programmes in Denmark? I seldom had a good answer to this admittedly relevant question. My interest in the matter grew out of curiosity about how the EU system actually impacts local areas, and how their opportunities are limited or increased as a consequence of European integration. A guiding light of the study has been a belief that every area has to be understood on its own premises. This belief has guided my choice of method (case study) and approach to the subject. And, certainly, working on this report has given me the opportunity to get to know Bornholm in a more intensive manner than many foreigners do even though I only stayed on the island for six months. The interviews brought me to every hole-and-corner of Bornholm, and over numerous coffees I have gradually gained an understanding of the unique qualities of the Bornholm tourism industry. I am grateful to all the informants who during busy days took time off to answer my questions. Wherever I came I was met by positive people who helped me overcome limited knowledge about local conditions and language (Bornholmsk). What this report lacks in terms of understanding of Bornholm is the sole responsibility of the author. In particular, I would like to thank Niels Chresten Andersen in the international department of Bornholms Amt for guidance in the labyrinth of the EU structural funds. I wish to thank Svend Lundtorp for enabling me to undertake this study, and all the colleagues at Bornholms Forskningscenter for making my stay stimulating and enjoyable. I would also like to thank Chris Cooper for useful comments on an earlier version on this report. Last, but not least, I wish to thank Kreg Lindberg for helpful comments and suggestions and kind and patient support during the whole process. Benedicte Bull September 1998 Summary The European Structural Funds provide an opportunity to fund programmes for tourism development in Europe. This report discusses evaluation criteria and argues that evaluation of such programmes should be based on obstacles to tourism development as perceived by the local actors themselves. The Structural Funds programmes on the Danish island of Bornholm are evaluated on these criteria. They are found to have had a positive impact on the tourism product, but urgent problems of lack of co-coperation and innovative capacity remain. Based on the experiences of Bornholm, the second half of the report discusses how local government can implement these programmes to ensure the best possible outcome. It is argued that local bureaucrats simultaneously have to play the roles of breadwinners, developers, mediators and door-openers to ensure continuous attraction of funds and to reduce the costs of making use of the funds for local target groups. In order to succeed, an organizational structure allowing a division of labour between government and business service organizations is required. On Bornholm, an international department and an EU secretariat were established within the county administration in order, among other tasks, to obtain funds from the EU and promote local business development. The EU secretariat is the core implementing agency for the structural funds programmes, but a number of additional organizations participate, notably the Centre for Agricultural Development and Innovation (LUIC) and the Trade and Industry Development Council of Bornholm (the Business Council). Taken together, these institutions constitute an implementing structure that allows all the roles of the implementors to be played. Nevertheless, there are unresolved problems, and the tasks related to door-keeping and breadwinning tend to be given priority at the expense of development functions and the crucial function of being mediators with respect to local industry. LUIC has been most successful as a mediator because it built on long-standing relationships between farmers and farm organizations. In the hotel and campground sector, these relationships did not exist. Consequently, the organizations implementing the funds in this sector had less success in lowering the costs of information gathering and application development for the target groups. Table of contents 1. Introduction ............................................................................................................ 11 2. Tourism on Bornholm - structure and trends ........................................................... 13 2.1. Tourism on Bornholm ................................................................................... 13 2.2. Tourism trends on Bornholm ......................................................................... 14 2.3. Organization and planning of tourism on Bornholm ....................................... 14 3. The structural funds and the tourism sector ............................................................. 17 3.1. EU Regional Policy and the Structural Funds................................................. 17 3.2. Tourism and EU Regional Policy................................................................... 19 4. The distribution of funds from the structural funds programmes on Bornholm in the tourism sector................................................................................................... 23 4.1. Provisions for support of the tourism sector................................................... 23 4.2. Distribution of funds...................................................................................... 24 5. The impact of structural funds on the tourism sector in Bornholm ........................... 27 5.1. Criteria for evaluation of programme performance....................................... 27 5.2. The problems as perceived by the tourism sector on Bornholm ...................... 29 5.3. The funds and the problems of Bornholm’s tourism sector............................. 30 5.4. The projects .................................................................................................. 31 5.5. Evaluation of project performance ................................................................ 33 5.5.1.Improvement of hotel standards..................................................................... 34 5.5.2.Creation of off-season attractions .................................................................. 34 5.5.3.Reduction of over-capacity in the hotel sector................................................ 35 5.5.4.Co-operation in the tourism sector................................................................. 36 5.5.5.Innovation
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