Alina Gwoÿdziewicz

Alina Gwoździewicz “Tourism Cluster in Cracow - application of Michael Porter’s theory of clusters and focus on cluster promotion”1

MICHAEL PORTER’S CLUSTER THEORY

Clusters - “geographic concentrations of interconnected companies and institutions in a particular field”2. Basing on a competitive advantage of a given region, companies and institutions are based in a specific place, to exploit the natural inclinations by making use of available resources, building necessary relationships, developing knowledge. Fierce competition among the firms in the area constitutes a motivation to increase the quality of production, services, know-how, which in effect leads to highest possible standards. But competing entities can also cooperate with each other on different levels (marketing, logistics, technology, etc.), which strengthens the region and the sector with positive synergies within the cluster. As a result the cluster becomes competitive nationally and globally by ensuring constant struggle for quality. This coherence of the cluster and internal cooperation is important, especially as regards service industry clusters and tourism cluster in particular. Quality of visitor’s experience, and his willingness to come back again, depends not only on the appeal of the primary attraction but also on the quality and efficiency of all the complementary businesses such as hotels, restaurants, shopping outlets, transportation etc. Their constant cooperation is essential.

To analyse the clusters Porter developed, what he called a “diamond model” or “Competitiveness Diamond” – 4 sources of the competitive advantage of the location, connected with each other. Figure 1 shows these components and the interconnections between them.

1 This article is a short version of a masters thesis « Tourism Cluster in Cracow », written by the author under the guidance of Professor Jerzy Mikułowski Pomorski in the Department of European Studies 2 Porter Michael E., “Clusters and Competition”, Harvard Business School Press, 1998, Boston

Figure 1. Porter’s “Competitiveness Diamond”

Firm strategy, context and rivalry

Input factors, Demand conditions conditions

Related and

supporting industries

Source: Porter M., “On Competition”, Harvard Business School Press; 1998

The components of the “Diamond” with some examples of the attributes which require evaluation in order to achieve an effective and competitively appropriate view of the environment are shown below. “Clusters operate and succeed or fail in the context of a competitive environment. With respect to tourism, central competitiveness issue is how competitive the destination is as a whole rather than each individual component. In turn, the competitiveness of destinations has to be focused on achieving sustainability over time, maintaining a focus on all the components of competitiveness during medium and long term, and reinforcing the sustainable character of competitive advantages of the destination - even though these can and will change over time”3.

Attributes of the Competitiveness Diamond

1. Input Factors, Conditions. The conditions of the economic infrastructure affecting tourism companies.

3 “The Cluster Consortium - Strategy in Action” 1999

Referring to the availability and conditions of basic factors. Including tourist attraction resources both natural and cultural, the planning of sustainable use of these resources, the territorial regulation, the availability of infrastructure and basic services, access to modern technology of lending and commercialisation of services, availability and quality of human resources, access to capital resources, etc. 2. Firm strategy, structure and rivalry. Operating conditions of the companies of the sector. This attribute looks at how the network of companies adapts to market requirements, the levels of rivalry, existing barriers of entrance and exit, legal, labour and fiscal structure, activities of local authorities, competitive strategies jointly accepted, the way of organization, the performance of management of the location, etc. 3. Demand Conditions. Trends and market conditions facing the industry. Referring to the characteristics of the demand captured by the destination: volume and seasonal conditions, socio-economic and demographic characteristics, markets of origin, tourist motivation and behaviour, level of satisfaction demanded, previous knowledge of destination, image of destination among tourists, etc. Includes also the grade of adjustment between the image of destination in tourist demand and the competitive position taken, which can be the object of investigations of a qualitative order. 4. The Cluster: Related and supporting industries. The conditions of the connected and supporting sectors. Referring to the linkages between firms and industries within the cluster, the degree of collaboration and the strength of networking organisations and associations.4

Another tool used by Porter in visualisation of a structure of a cluster is a “Cluster Map”. This analytical tool outlines the entities participating in the cluster and the linkages between them. Not only does the “Cluster Map” outline visually the organizations and entities involved in the cluster, it can be used to identify how complete or incomplete the cluster is in terms of direct and indirect suppliers and critical economic infrastructure.

4 “The Cluster Consortium - Strategy in Action” 1999

TOURISM IN CRACOW

In the year 2000 there were approximately 4.35 million people visiting Cracow, 41,4% of this number are considered as tourists. 60% of them is coming in the summer5. The number of tourists coming to Cracow was constantly rising in last years, but has dramatically fallen in the year 2001 (3,6 million visitors)6.

The relation of number of tourists and the number of one day visitors is estimated to be 1:5 in Poland as a whole and 1:1,2 in Cracow (data for the year 2000). These figures show us, that the amount of tourists coming to Cracow for longer is almost the same (only slightly lower) as the amount of people coming for just one day. Compared to data for the whole country, we can see a great difference. It is significant, that tourists come to Cracow for longer trips, they spend more than one day in the city. It is a great opportunity for the cluster to seize and a good basis to begin some campaigns aimed at maximizing spending per stay and at encouraging the people, who already are in the town, to stay longer than they were planning. In the year 2000 and 2001 most tourists spent 3 days in Cracow. However average statistical number of days spent in the city was 6. This discrepancies result from rising number of people coming to Cracow in educational and business purposes for a month or two, which overstates the statistical average7.

The research of the Jagiellonian University for the Municipality of Cracow proves that 34% of tourists taking part in the survey were first-time visitors. That puts a great responsibility on authorities responsible for the image of the city - to make these people come again - and is a chance for the cluster to make them join the already large number of loyal clients (48% of visitors came to Cracow three or more times).

5 Lijewski T., Mikułowski B., Wyrzykowski J., „Geografia Turystyczna Polski”, Polskie Wydawnictwo Ekonomiczne, Warszawa 2002 6 Complete data in full version of the thesis 7 « Przyjazdowy ruch turystyczny w Krakowie 1.1.2001 - 31.10.2002 », Jagiellonian University for the Municipality of Cracow, Kraków 2002

Cracow is quite easy to reach, there is a lot of means of transport available for tourists, who want to visit the city. It seems interesting, that a train is the most common way to reach Cracow (32% of visitors). This might result from very low prices of this services in Poland (compared with other countries as well as with another means of transport within Poland) and a dense railway network of frequent connections. The same number: 26% of visitors comes to Cracow by car or by plane.

Most of the tourists come to Cracow with friends and family (43%), who are as well their main source of information about the city (60,6% before the trip, 60% during the stay8). According to the research done by the Cracow branch of the Institute of Tourism, an average cost of a stay in Cracow (all the costs included, trip included) in the year 2000 (Polish and foreign tourists) is estimated to be 3000 zlotys (around 750 USD). Average spending in the city itself (hotels, restaurants, visiting, cultural events, etc.) equalled approximately 200 USD, which is still much higher than the average expenditure per stay for whole country (136 USD).

According to the results of research of the Jagiellonian University - 73,3% of tourists, who visited Cracow in the year 2001/2002, spent less than 1000 zlotys (250USD) per day, 60% - less than 200 zlotys (50 USD), which is connected with the type of accommodation commonly used by the visitors - their friends and family.

As most attractive, tourists perceived the following places: Old Town - 65%, Wawel - 56%, Cracow by night - 43%. Attractions searched for by the tourists, but not easily accessible were: the underground Cracow, the mysteries of monasteries, viewing flights with a balloon or a plane, a night in the salt mine in Wieliczka9. The questioned tourists were asked to assess individual elements of the overall tourism product. The results show that the state of public toilets and general sanitary state of the city are major concerns of visitors of Cracow and constitute a challenge for the city authorities. The atmosphere of the city and Polish hospitality won the

8 Ibidem 9„ Przyjazdowy ruch turystyczny..” , op. cit.

most points among the components of the overall Cracow tourism product10. The only thing to do is to encourage these positive phenomena to grow and prevent the authorities from enacting too strict the rules, which could result in spoiling the ambiance.

Regardless all the inconveniencies and high prices, 93% of foreign tourists and 85% of Polish visitors would recommend Cracow to their friends. It is worth noticing that foreign visitors are more convinced (only 6% does not know if they would). It is an optimistic sign and a good publicity for Cracow in the world. It is one of the best public relations instruments: a satisfied client.

GEOGRAPHIC LOCATION OF THE CLUSTER

Cracow is the capital of one of the southern voivodeships in Poland - Malopolskie. The region covers 15.144 km2, which constitutes 5% of the country’s area. Cracow itself was founded by the Vistula river, at the Wawel hill. The city has now about 740 000 of inhabitants, whole region of Malopolska – 3 200 000. The borders of the cluster seem to be located at about 40 km around the city, so as to include such towns as: Wieliczka, Bochnia, Myślenice, Kalwaria Zebrzydowska, Ojców. Each of them plays a significant role in the life of the cluster (they are reach in monuments, which attract tourists and most supporting industries for the cluster are located in this area).

10 Complete data in full version of the thesis

Figure 2. Geographic location of the cluster

Source: Self study PORTER’S DIAMOND ANALYSIS INPUT FACTORS, CONDITIONS History: The archaeological research carried out at the Wawel hill dates the first settlements as 50 000 years old. Since approximately the year 700 B.C. this place has been continuously inhabited by various tribes, to turn into a flourishing City of Cracow in X century and to become a capital of Poland in the XI century. At the beginning of the 1600s the kings’ base was moved to Warsaw, but Cracow informally remained a capital till the year 1795 – the year of the first Partition of Poland. After this tragic event it was turned into a “Free City of Cracow”, to become a part of the Austro- Hungarian monarchy not much later, but it still kept a far-reaching autonomy. That

is, why this city was considered for almost one and a half century (till 1918 – the year in which Poland of regained its independence) a capital of Polish values, culture and traditions. That is, where all the artists and patriots searched their shelter from Austrian, German and Russian persecutors. Even during the times of the communist regime Cracow never turned into a centre of the ideology. This is a city of tolerance, freedom and liberalism. Here the self-government and democratic traditions are the strongest in whole country.

Geography: Malopolska is geographically a very diversified region. Beginning with the highest and the only alpine type mountains in Poland – Tatry – in its southern extremity, through lower mountains: Pieniny with beautiful valley of Dunajec and Beskidy, to the valley of Vistula river, which constitutes a natural barrier between the mountains and the lower areas. Slightly north from Cracow, the Jurassic limestone rocks of upland Krakowsko-Częstochowska begins. There is 24 nature reserves and the Ojcowski National Park in the proximity of Cracow and in the whole region there is 100 nature reserves and 6 National Parks.

Although the main interest of the author of this paper lies in Cracow itself, it is worth noticing, that the strong tourism cluster in the city profits a lot from the geographical diversity and natural resources of the whole province. In the city itself, we can find a unique meadow of 48 hectares, called Błonia and Planty - a park in a shape of a circle, surrounding the old town. Transportation infrastructure: There is a lot of ways to get to Cracow, the city lies at the crossroads of the main rail and road ways. The highway A4 (east-west) is crossing with the international road E 77 (south-north), which is a good basis for easy access by bus or private car. There are everyday international railway connections from Cracow to Berlin, Vienna, Budapest, Praha, Kijev. The Balice airport ensures the connection with the most important cities in the world (Paris, London, Zurich, Frankfurt, Vienna, New York, Chicago, Tel Aviv, Copenhagen).

The transportation inside city however, is more complicated, as regards private cars. It is much easier to leave the car at some guided parking and use the public means of transport, who ensure good and much faster connections between different parts of the city, with: 442 trams (23 lines), 519 buses (118 lines), 4000 taxis.

Generally speaking the public transport network is considered to be quite efficient but vulnerable to the traffic jams. With planned investments (“fast tram”) it will certainly become faster and more comfortable. The system of daily, weekly and monthly tickets is very well organized, although they are available only in several selling-points, which makes things difficult every beginning of the month. However the tickets can be bought any day of the month and, what is even more convenient, they are valid from the date chosen by the buyer (it can be any day of the month or the week). So in this field Cracow is winning with cities such as Paris, but it’s still loosing because of the lack of the subway network.

Human factors: 740 thousand people live in Cracow (of which around 5500 are employed in hotels and restaurants), 8 million live in range of 100 kilometres. Unemployment is relatively low (14% in Malopolska, 8% in Cracow, compared to 19% in Poland as a whole). 130 000 of Cracow citizens are employed in private sector, 37 000 in public.

Cultural, administrational and business institutions: There are numerous institutions supporting business, based in Cracow, such as chambers of commerce, industry, tourism and agriculture and other Polish and international organisations. As regards cultural and administrational institutions: 12 consulates and various institutes and centres of culture assure international cooperation and network of contacts.

Institutions mentioned above constitute a core for the international cooperation of the cluster. They are linked to the cluster in several ways: they ensure connection of the cluster itself and local businessmen with the international community, they are

attracting some visitors themselves (businessmen from the region, etc.), by their daily activities and by the events they are often organising aiming at popularisation of their country of origin or their daily affairs, they are also providing some help for the foreigners visiting Cracow (especially the diplomatic institutions), which might make these people more eager to stay there, because they feel safe (compare the sub-chapter Demand conditions).

Sport infrastructure: Sport infrastructure might be a goal for the visitors by itself and by the events connected with its activity, it can also improve the quality of life of a district and be a cause of a prolongation of the visit. For example: some sport events, like football matches, can attract the fans of a team and cause them to visit the cluster. Actually, Cracow is a home for one of the best Polish football teams: Wisła Kraków. This club is the current Champion of Poland and is successfully competing internationally. The stadium belonging to this club is being modernized, it is planned that it should have a capacity of 28000 people, the works are financed by the sponsor (Tele-fonika) and the city (although lately the plans have been changed to only 16000 of capacity and the city of Cracow decided to withdraw from the investment, as the arena wouldn’t be big enough for organization of international matches). In Cracow there is more and more mass sport events being organized. Local sportsmen known internationally, such as the Olympic and World Champion in walking - Robert Korzeniowski, are a magnet for many people to come, visit the city and, what is more, to do some sports together. Robert Korzeniowski gave the idea of an event called “Walk to the market square” (“Na Rynek marsz”) and he is organizing it every year. Another sport event like this is the Cracovia Marathon. The city of Cracow is currently investing in the construction of a mountain kayaking arena (which is planned to be an international arena) and in another football club (which has a long historical tradition of being municipal) - Cracovia. Moreover sport success stories are building a positive image of the city.

Culture and local climate: Cracow is the second centre of culture and arts, after Warsaw. It has: 48 museums, 19 cinemas, 16 theatres and music theatres, and 6000 monuments11. Most of the monuments are located in the centre of the city. Majority is incorporated in the walking tours (such as “The Kings’ Road”, leading around the “Old Town”), some are open for visiting (mainly as parts of the museums, e.g. the house of Witkacy, Polish poet).

Cultural institutions, such as theatres, are attracting tourists by their daily activities: plays, others, such as centres of culture, are providing help for local artists, they take care of cultural education of the youth. Together they strengthen the image of Cracow as a centre of Polish and European culture, the image which is magical and attracts the tourists.

“Genius loci”: the architecture of “Old Town” in Cracow was classified by UNESCO as one of the 12 most valuable in the world and added to the list of “ the World Heritage”.

There are also other monuments in the region, outside Cracow, but connected with the city culturally and geographically. They constitute a part of Cracow’s history and cultural heritage. - Salt mine in Wieliczka, on the list of World Heritage. - The concentration Camps of Oświęcim and Brzezinka - Wadowice: the town where the Pope was born. - Piwniczna, Szczawnica, Rabka – health care establishments.

The health care establishments and spas are connected with local microclimate, which makes people come there in order to cure the diseases and take some rest in a peaceful environment, enjoying natural methods of healing. Piwniczna and Szczawnica are famous for their high quality mineral waters, Cracow has one health

11 More details in full version of the thesis.

care establishment based on such waters itself. The salt mine in Wieliczka is famous for the microclimate of its sanatorium based 200 meters below the city, in old mine. It became the reason for many people to travel to Wieliczka12.

In the research carried out by the independent Institute of Research of the Market Economy (Instytut Badań nad Gospodarką Rynkową), Cracow was classified in the group A, together with Warsaw, Wrocław and Poznań and among them won the first place as regards “perspectives and possibilities of the tourism sector” and “social climate”. FIRM STRATEGY CONTEXT AND RIVALRY

LOCAL BUSINESS CONTEXT There are: 17 hypermarkets, 33 public marketplaces and 2460 companies in the sector of gastronomy located in Cracow13. The sector of gastronomy is entirely privatised (in the times of the communist system restaurants and food establishments were mainly a state property or a “common property”, it changed dramatically after the year 1990). The highest concentration of restaurants and cafes is estimated to be in the central district of the city (Śródmieście) – 240. There is also the highest number of “milk bars” localized in the centre (14). These bars constitute the local specifics of the Cracow gastronomy – they offer very cheap food of quite a good quality and are most visited by the students.

Although the competition is severe, the number of food and beverage establishments has been growing constantly14, following the rising trend in the number of tourists coming to Cracow till the year 1999. The data concerning number of food establishments in the following years is not yet available, so it is difficult to predict, how the situation is going to develop in the context of a sharp fall in the number of visitors in the year 2001. The international giants, such as McDonalds, Pizza Hut and Kentucky Fried Chicken are nevertheless investing heavily in Cracow (10 million USD together), however the position of local investors and owners remains strong.

12 Wieliczka is assumed to be a first truly turistic goal of travels in Poland. It is estimated that turism in the salt mine begane in the XVth century. Turists were coming attracted by the beauty of underground chapels and the microclimate. 13 More details in full version of the thesis.

According to the date from the year 200, there are 86 hospitality establishments in Cracow, 46 of them being hotels15. In last 5 years however, there is a great interest in the hotel industry visible. On average, there are 7-8 hotel openings every year (during the years 2001-2002 14 new hotels were built in Cracow). As regards high standard hotels, foreign companies invest alone, but some of them are interested in cooperation with Polish investors. They are usually investing in new establishments, mainly in the centre of the city (Ibis, Novotel, Sheraton, Holiday Inn, Radisson). There are also many entirely Polish enterprises in the business, also investing in the renovation of already existing establishments. Location of hotels and restaurants in ancient buildings is a local specialty (hotel “Copernicus”, restaurant “Pod Aniołami”). Restaurants and pubs in the “Old Town” are very often located in old, beautiful cellars, some of them built in the Middle Ages.

There is 220 tourist agencies in Cracow alone (350 in whole region), which proves a great interest of local community in travelling as well. These companies deal in all the aspects of tourism (from local to international) – transport, food, lodging. There are international travel agencies established in the city, as well as the airlines and bus-lines themselves, to offer their services directly to the customer.

Cracow is ranked in the third place among all the Polish cities as regards “attractiveness of investment”. In the year 2000 total value of realised investments reached 2,7 billion USD16. Standard and Poor rating of the long-term debt issued by the City of Cracow: BBB+. These two facts are very significant and show that Cracow is a City of great credibility and high investment potential. Explanation of so high a ranking place of the city was following: dynamic local market, very well educated workforce, cheaper than in Warsaw, scientific infrastructure, touristic opportunities, high marketing activity of local authorities (dynamic cooperation with partner cities all around the world, investment incentives system), high credibility and low corruption of the City Council and local institutions.

14 Details in full version of the thesis 15 More details in full version of the thesis 16 Details in full version of the thesis

LOCAL GOVERNMENT: STRATEGY FOR THE REGION As the cluster consists of both the city of Cracow and a great part of the rest of the Malopolskie voivodeship, I decided to analyse the strategies of the local governments of both administrative authorities. The strategy of the whole region as well as the one of the city, is very well designed in cooperation with European Union and with local communities. They are both very detailed, it makes the city and the region credible and trustworthy partners for business and ensures rapid development of both of them in a specified direction.

Strategy of development of Cracow is defined in the document itself, as a “a group of integrated development aims, based on awareness of all the conditions and ways to realise those goals, a particular conception of conscious and systematic control over the development of the city.” All the strategic documents are aimed at accomplishing the mission of the city, which is the following: “Strengthening the metropolitan functions of Cracow, as a European centre of culture, arts, science, tourism, services and modern industry and basing on this virtues – creating the conditions of sustainable upgrading of the quality of life of the inhabitants.”

There is also an idea, that Cracow should become “the destination, ton just a place on the way to somewhere else”.

The strategy of the city is designed in such a manner, that it sets specific activities aimed at reaching strategic goals through active fulfilling 11 main functions of a metropolis: political, cultural, administrative, spiritual, scientific, tourism, educational, economical, financial, communicative, informative.

To better fulfil the mission and the strategy of the city and to be able to share the experience and to lobby effectively in favour of the city, local government of Cracow decided to join several Polish and international organizations and to cooperate with many cities on a bilateral level:

Polish organizations 1/ The Association of Polish Cities (realisation of many projects with PHARE and USAID, representation in the Council of Europe in the Commission of Regions and Selfgovernments) 2/ The Union of Polish Metropolis (influence on the laws voted by the parliament) 3/ Association of the Jurassic Communities 4/ Association of the Healthy Polish Cities

International cooperation 1/ Twin cities agreements with 5 cities: Kijev, Norymberg, Kurytyba, Leuven, La Serena 2/ Partner cities agreements with 17 cities all over the world 3/ Bilateral contacts with other 15 cities The scope of cooperation within these contacts is very wide, the local governments aim at exchanging experiences and deepening the cooperation in the fields of: education, culture, promotion, environment protection, European integration, sports and recreation.

International organizations 1/ Eurocities (very important and influential organization, having close contacts with the European Commission, presence of Cracow enables the city to have an influence on the shape of the documents) 2/ League of the Historic Cities (Cracow hosted the VI World Conference of the Historic Cities in 1998) 3/ Organization of the World Heritage Cities (ideal promotion of the city, help in renovation of the monuments) 4/ Association of the European Cities of Culture 2000 - a very prestigious membership, which gave the city an opportunity of worldwide promotion. There are a lot of committees, associations, presentations and other programmes, which were a part of the "Festival Kraków 2000", but did not cease to exist after it had finished. They constitute now a part of the city's promotional means.

As regards the Malopolskie voivodeship, the definition of strategy was following: “it is a document which gives the basic outlines for further financial and investment plans, so that they follow the common pattern and serve reaching the goals which are most important for the region, this document puts together thinking about internal activities with care for external support and participation of social partners”. It was designed to fulfil the mission of the region: “Malopolska - the region of opportunities for versatile personal and business development, strong with the dynamism of its inhabitants, gaining from its reach past and retaining its identity in the era of European integration”.

LOCAL GOVERNMENT: ACTIVITIES FOR INDIVIDUAL TOURISTS In the City Council of Cracow, there is a special Commission of Promotion, Cooperation and Information. It takes care of all the aspects of promotion of the city and international cooperation. There is a new product, promoted and designed by the local government of the City, aimed at facilitation of the life of tourists visiting Kraków (students an adults): Cracow Touristic Card. It has two versions - for 2 and for 3 days (costs approximately: 11 and 16 USD), it serves as a ticket for all the means of public transport inside the city and a ticket for 26 museums, without any additional charges. It also offers a lot of discounts and rebates for taxis, restaurants, shops, galleries, etc. The Card is accompanied by a very useful and complete guide.

LOCAL GOVERNMENT: ACTIVITIES FOR THE CLUSTER In the strategy of the city, the local government set the following priorities for the business: 1. Increase of the economic potential and the variety of city’s economy. 2. Development of small and medium enterprises and creating modern law basis for the big companies. 3. Development of specialized services for businessmen and local citizens. 4. Activation of local real-estate market and supporting modern building industry. 5. Increasing of the quality of communal services, local transport infrastructure and public transport.

To realise that objectives certain measures have been taken: There are 7 areas prepared for rapid investments, where local authorities are offering low taxation, no local fares and other incentives for investors. A Special Economic Zone, connected with a Research, Development and Innovation Centre, have been established in Cracow, to attract international investors and to encourage a complete and coherent development of the cluster. In the ranking prepared by an independent Institute of Research of the Market Economy (Instytut Badań nad Gospodarką Rynkową) of the regions most friendly for investors, where the local authorities, institutions and governments act actively to support local business, the Cracow region was placed third, after voivodeships Mazowieckie and Zachodniopomorskie. The city is an active member of the national Support Programme for Small and Medium Enterprises. The authorities of Cracow try to facilitate new investments by imposing as little restrictions as possible. One of their ideas, which makes their policy different that those of other cities, is the concept of giving an owner of the land a free hand in deciding, what to build there. Thus an American concern Tishman-Speyer Properties, who specialises in modernisation of neglected areas around railway stations (Chicago, New York), will completely rebuild the station in Cracow, as well as some areas along the Vistula river. New shopping-, business- and entertainment-centres are going to be built, together with hotels and apartments. Local government assumes, that those two places will soon become a new centre of the city. In the meanwhile they will certainly constitute the biggest construction-site in Poland (750 billion USD are going to be invested). For the same reason, the city of Cracow is attracting more and more good architects. “The towns in the city” are being built, islands of modern architecture surrounded by old buildings. New buildings of Multikino and Aquapark together with a shopping centre Geant are a great example. New wing of the building of Jagiellonian University Library is also a state of art of modern architecture. All this acts in favour of the city, its image of being “investment friendly”, which attracts further investments, improves quality of life in Cracow, lowers

unemployment, attracts business tourists and insures general positive atmosphere around the cluster.

DEMAND CONDITIONS

There is a big mobility of the inhabitants of the cluster, within the cluster and outside its borders (but still within the voivodeship, or to the neighbouring – Slaskie). There is a lot of people commuting every day from Wieliczka, Skawina, Niepołomice and other towns nearby Cracow to work or to study. People travel for professional reasons, but also in recreational causes (the mountains in the south of the Malopolskie and Slaskie voivodeships are luring the tourists for weekends, to ski in winter and to hike in summer). Tourist agencies, local transportation companies and ticket-selling agents profit from this mobility. Businessmen from the region constitute a big part of overnight arrivals. This is caused by the presence of many administrative institutions in Cracow, but also by many fairs and other business events being organised there. Among them a lot of exhibitions connected with tourism and tourism-related industries.

The openness, history and cultural and historical affluence of Cracow resulted in establishment of many international institutions and diplomatic posts in the city (12 consulates). That is why the city became very multinational, hosting diplomats and people of culture from all over the world. In return, foreigners are once again attracted to Cracow, because they feel safer there, knowing that in case of any problems they are close to their consulates. International companies invest a lot in the city, lured by Special Economic Zones, but also feeling more secure, close to diplomatic offices ready to help in case of misunderstandings. Foreign businessmen, working for the international companies established in Cracow, and the diplomats, constitute a majority of inhabitants of the luxurious districts of the city (eg. Wola Justowska). They are the main consumers of house-keeping and baby-sitting services. Their children constitute the majority in the schools with foreign languages of instruction.

Cracow is an important centre of business in the scale of the region, as well as that of the whole country. Many companies and institutions have their headquarters in Cracow thus the city becomes an important destination for many businessmen. On the other hand, the proximity of this entire infrastructure encourages new establishments. In this way, the tourism sector in Cracow is profiting from both sides: supply and demand. Almost one third of the French, contacting in Polish National Tourism Office in Paris, ask about Cracow and declare a desire to visit this city17.

RELATED AND SUPPORTING INDUSTRIES

To show the structure of the cluster, the “Cluster map” based on scheme developed from Porter’s model for the French Riviera Tourism Cluster by Philippe Davidson18 was used. For obvious reasons the diagram has been modified and adapted to specificity of Cracow cluster, it has also been made it more detailed.

In this model 6 core areas of the cluster have been highlighted: 1. Hospitality 2. Specialized Tourism Services 3. Arts and entertainment 4. Transportation and Communication Infrastructure 5. Urban Renewal and Development Projects 6. Administrations: Municipal, Regional, National, European While first five of them seem to be obvious as central areas of almost any tourism cluster, the sixth - administration is not so evident. In fact local authorities regulate local law directly influencing all the actors in the cluster and determine future ways of development, local institutions attract a lot of “business tourists”, local government is responsible for promotion of the city and the cluster. All these activities have an essential role for functioning and development of the cluster.

17 B. Walas, “Tourism information of the Office National Polonais de Tourisme in Paris – third quarter of the year 2002”, internal document of Polish National Touristic Office in Paris, September 2002 18 “Tourism Clusters – The Case of the French Riviera”, presentation given by P. Davidson, F. Goltz, W. Hubert, F. Monteils, N. Sivam, N. Trakulyuthachai, Nice, May 2002

All the core areas, second and third level areas of the cluster, as well as the connections between them, are shown on the graph (figure 3).19

19 Examples of some highly specialized hotel and restaurant equipment provided by local manufacturers, of locally based artists, handicrafts and manufacturers, supplying souvenirs, local food specialties, jewellery and states of arts for Cracow market and of tourism-connected services are included in full version of the thesis

Figure 3 . “Cluster map” of the Cracow tourism Cluster

Source:Davidson P.,”Tourism Cluster in French Riviera” - modified by Alina Gwoździewicz

The cluster is very well developed and interconnected. All the core activities are supported by a wide base of local institutions, suppliers of equipment, products and services based in Cracow or in the area of the cluster (figure 1). To complete the cluster mapping, I include the examples of local manufacturers of equipment and other products, as well as providers of services, connected with Cracow tourism cluster.

ROLE OF LOCAL COMMUNITIES IN THE CLUSTER In this chapter the role of inhabitants of the cluster and of the local communities is going to be discussed. Porter’s “diamond” seems to be mainly an economic model and it does not really show all the multiple functions that local communities have in the cluster. “The economic life is deeply ingrained in social life and it cannot be considered with omission of such matters, as customs, moral values and habits of a given society. Shortly: economics cannot be separated from culture”20. Following this thought, a scheme shown in figure 4 is an attempt at fitting the communities into the “diamond” model. Details are described underneath the graph.

Figure 4. Role of local communities in Porter’s “diamond”

Firm strategy, context and rivalry

support

Input factors, care Local form Demand

conditions communities conditions

create

Related and supporting industries Source: self study based on the model of M. Porter

20 Fukuyama F., “Zaufanie. Kapitał Społeczny a droga do Dobrobytu” (“Trust. The Social Virtues and the Creation of Prosperity”), Wydawnictwo Naukowe PWN, Warszawa-Wrocław 1997

Forming role for Demand conditions Local businessmen, inhabitants of the cluster, are very mobile and constitute a big part of overnight arrivals to Cracow. There exists a different side of demand creation by local inhabitants as well: almost 20% of tourists visiting Cracow indicate “visiting friends and relations” as a main reason for coming to Cracow and more than 60% of them shows friends and relations as a source of information about the city21. In another words they create the demand simply by living in Cracow and inviting friends and family.

Supporting role for Firm strategy, context and rivalry A successful strategy of a region has to be designed and put into life in cooperation with local communities. If the inhabitants of the region participate in the process from the very beginning, there is much more chances of successful realisation and development of the projects with local support. The name of the method used in this context is “collaborative planning”22. Put into practice in the case of working out the strategy for the region of Malopolska, collaborative planning took a shape of a project called “Małopolska Lista Szans” - “The List of Opportunities for Malopolska”. It was a questionnaire for the inhabitants of the region, which contained a list of 160 projects divided into 10 groups. The 160 projects were previously indicated by the inhabitants of all the communes of the voivodeship. The questionnaire was answered by a group of 700 representative inhabitants of the region. The aim was to prioritise 50 most wanted projects and to incorporate them as “priorities” in the strategy of the voivodeship. The following list enumerates 5 projects chosen by the highest number of voters: • supporting the sector of small and medium companies, • creating the zones (industry parks) • building the Music Centre in Cracow, • building the highway Cracow - Tarnów, • building the northern bypass of Cracow.

21 „Przyjazdowy ruch turystyczny ..”, op. cit. 22 Details in full version of the thesis.

Most of the projects chosen by the surveyed, are directly or indirectly connected with tourism (entertainment, transportation, etc. - all that is linked to tourism). It shows the place of tourism industry in everyday life of the region.

What is worth noticing, is that Malopolska was the only region in Poland to involve the local communities in the process of strategy forming. Caring role for Input factors and conditions through a Creating role for Related and supporting industries The society of Cracow is a very special group of people, they are aware of the beauty, history and meaning of the city as a centre of culture and a monument by itself (which are qualified as input factors to the cluster) and feel very attached to its tradition and values. That is a reason, why there is a lot of social movements and organisations aiming at preservation, restoration and popularisation of the beauty and monuments of the city (they can be perceived as institutions constituting supporting environment for the cluster - compare figure 3). Some of them are enumerated below and the goals and methods of reaching them are briefly described, to show their wide scope of activities23. 1. Cracow Heritage Society (Towarzystwo Miłośników Historii i Zabytków Krakowa) - was founded on January 1st, 1897, and has been developing and expanding its activities ever since, in accordance with its charter: • promoting research on Cracow and promulgating knowledge about our city; • conserving monuments and preventing their destruction; • organizing social and cultural events with a Cracow theme; • publishing research achievements from the history of the city.

2. Social Committee for Renovation of Cracow Monuments (Społeczny Komitet Odnowy Zabytków Krakowa) was founded with an act in 1978, after Cracow was inscribed in the UNESCO World Heritage list, in order to prevent further destruction of historic buildings of Cracow. The Committee is formally and financially supported by the President of Poland, who yearly donates great sums of money (for the year 2003 it is 30 millions zloty - 7,5 million euros), which makes it a reliable and powerful

23 Fuller descriptions of these organisations are included in fuller version of the thesis.

organisation. The money of the Committee also comes from private donations. The Committee members are being appointed by the President, they come from different groups, mainly historians, conservators, writers and other artists, politicians, social activists and economists, people reliable and usually famous. Their work in the Committee is a community service, they sacrifice their precious time and knowledge to enable the organisation to fulfil its tasks. The conservatory vision of Cracow aims at stressing the symbolic values of the city, its esthetical virtues and strengthening its functions of a centre of culture, science and tourism in a scale of the country, Europe and the world. The Committee takes care to preserve the city of Cracow as a “living” city, not a heritage park, by always aiming at such a development of historical objects as to ensure realisation of contemporary functions. The Committee is also playing an advisory role to the authorities. Consistent and coherent long term activities of the Committee have already brought visible results and gained worldwide respect.

3. There are also separate organisations of fans of particular districts or areas of the city. They aim at protection of architecture, beauty and atmosphere of these places by attracting the interest of capital owners ready to invest in renovation of monuments and buildings without interference with tradition and image of the district. They also prevent the aggressive activities of developers and other investors by lobbying city authorities and protesting against some plans they perceive as not harmonised with the image of the area. Examples of such organisations: • Society of Kazimierz Lovers (Towarzystwo Miłośników Kazimierza) • Society for Protection of Zwierzyniec (Towarzystwo Ochrony Zwierzyńca) • Committee of Salwator Lovers (Komitet Miłośników Salwatora) • Society of the Park of dr Henryk Jordan (Towarzystwo Parku im. dr Henryka Jordana)

4. Some particular monuments have their lovers as well, there exists for example a Cracow branch of the Society of Friends of Fortifications (Towarzystwo Przyjaciół Fortyfikacji, oddział Kraków), which acts in favour of these monuments. The members try to gain some means for renovation of their beloved buildings and they

organise tours for everybody interested, to show and share the beauty of their favourite places with the others.

5. There also exist some societies for organisation of particular cultural events. One of these events is the famous Festival of Jewish Culture, organised yearly by the Society Festival of Jewish Culture (Stowarzyszenie Festiwal Kultury Żydowskiej).

6. Not only local communities act in favour of the cluster and development of tourism in Cracow. Friends of Krakow Society in New York City is a good example. It has begun its activities in early 2001. It seeks to create a forum for cooperation for residents of New York Metropolitan Area for whom Krakow remains a special place. 24. As we can see, local communities in Cracow (and communities of people loving Cracow) are very active and participate in the life of the cluster in various ways. MARKETING AND PROMOTION IN THE CLUSTER

CURRENT SITUATION

“One day somebody - I have mercy and I won’t mention his name - said that Cracow is promoting itself by itself. This is an awful lie and after years of that “self promotion” we are at the moment in a situation, where nobody thinks about Cracow as about anything but the Market Square, Wawel castle, Kings’ Road and Sukiennice. (..) I have been living in this city since my birth and it has always had the same looks.”25 This quotation from an article from one of Cracow’s newspapers shows a view of quite a disastrous state of marketing and promotion of the city. In my view things indeed don’t look very optimistic - authorities spend a lot of money on promotion, but it is mainly on membership in international organizations, some regular cultural events and publishing of leaflets and brochures. This promotion is not creative in any way, it doesn’t show any new attractions or regions or districts of

24 information from the website www.krakowiacy.org 25 Mancewicz S., „Relikt, banał, lenistwo” („Relict, cliche, lazyness”), article in „Gazeta Wyborcza”, “Cracow supplement”, 9 January 2003

the city to “discover”. More about the drawbacks of current situation in next subchapter, let’s focus on marketing activities of Cracow in the year 2000. The city of Cracow was promoting itself and the area around using the following means26: 1.Organisation of promotional events: - Holiday of the City of Cracow (Jun 6) - sports and cultural events in the Market Square - Day of Solidarity of World Heritage Cities - events in Barbakan - initiation of an informal Club of Former Capital Cities - expositions (photography, posters), Christmas fairs 2. Co-organization of promotional events: - International Meetings of Military Orchestras - celebrations of numerous anniversaries and national holidays - 3 sport events - 3 concerts - a conference “The European Union - a chance or a threat for Poland?” 3. Realization and purchase of promotional materials used during the events mentioned above and during Expo 2000 in Hannover 4. Inscriptions in some publications 5. Publication of leaflets and brochures for tourism purposes and with economical data (“The Real Estate Market”, “Map of Tourism Attractions”, “Communication leaflet”, “Cracow in Numbers”, “Cracow - European City of Culture” - folder, “Wawel” and “Portraits of Polish Cities” - CD-ROMs) 6. Setting a walking-biking route through historical monuments of the ”Fortress of Cracow”, conservation of other routs and putting an information sign about partner cities of Cracow. 7. Patronage over a warship.

All these promotional activities and coordination of membership of the city in international organizations and of international cooperation in general, described in subchapter 4.1.2, is being arranged and taken care of by following units of the City

26 “Rozwój gospodarczy 2000” (“Economic Development 2000”), report of the City Council, 2000

Office: Office of Promotion and Cooperation, Department of Culture, Information Office. Agency for Development of Region of Cracow is a unit, which promotes the region by supporting economic development and encouraging “business tourism” among businessmen and investors. In fact this is the only body, which promotes the cluster as such, taking care of both - the supply side (attracting investors to the region) and the demand side (“business tourism”). The city has also its own website www.krakow.pl , which is quite complete and gives a wide view on both Cracow and its authorities and their activities. The authorities organise also yearly presentations of the city in Polish embassies in some major European capitals (last year in Paris and Stockholm).

Hereby I described the means of promotion used by local government to promote the city - so called promotion-mix. All of these are aimed at tourists in general, some of them only at foreigners. As for a city, which aims at being perceived as a “Cultural Capital of Europe” I am afraid all these promotion is definitely not enough. No wonder, if the Director of Promotion of Cracow says in one of his interviews for the press: “Cracow is a city of such a reputation, that it doesn’t have to be advertised in the billboards. Our monuments can defend themselves”27. Of course, there was an all-year long festival “Kraków 2000” - a big event, full of concerts, expositions and other happenings. The “Office Kraków 2000” is still working and organising some cultural events. But I still think there are two other problems, as regards marketing of Cracow. One of them is lack of fresh ideas for the image of the city, second is lack of complete information about what is really happening there.

In my view the offer of Cracow stays the same all the time, every year the same concerts and festivals are being organized, but there is only a few new events, in all the brochures and leaflets the same places and symbols are being used. It might be result of current situation, where the promotion is taken care of by some clerks in the City Office. “ ..clerks - with all the respect - mentally have nothing to do with fantasy and arts and that is what promotion and advertising really are. Creating

27 Mancewicz S., „Relikt,..”, op. cit.

situations, where real artists and people with imagination can do something useful is a real role of the City.”28 The image of Cracow stays the same, while other cities in the world keep changing their style, their offer, to attract new tourists and to propose something fresh and original to those who are loyal, so that they don’t get bored with the place either. For example the authorities of Paris decided to change the logo of the city, although the old one (colourful Eiffel Tower) was very attractive and not so old, but it was still the Eiffel Tower, a cliché, so it had to be changed. There are many unusual events organised to attract tourists, but also to make the inhabitants interested in the life of the city. “La Nuit Blanche” for example, was a project of all-night long parties, museums open long hours (free entrance) and all the monuments illuminated and open for visitors (no fees as well) all the night, some happenings, concerts and performances in 20 places all around the city. Another initiative of Parisian authorities, aiming at making the city more attractive in summer, is closing the boulevards along Seine for the cars, for whole summer holidays and turning them into sunny beaches with real sand and palms. There were of course reactions to the projects, but tourists and local shop- and restaurant-owners were generally very satisfied and positively surprised. Inhabitants of the districts along the banks of Seine were also pleased, because of lower noise and exhaust fumes level.

As regards the second problem, there is in fact a lot of people, who organise some very interesting events in Cracow and nobody knows about it, only a group of friends or freaks. There is no place, where information about these happenings is gathered and diffused to a wider range of public. Tourists, who come to Cracow have no source to gain complete and reliable information and it influences the image of the city in a very negative way. There is a few monthly magazines in Cracow, among them: “Miesiąc w Krakowie” (“A Month in Cracow”) and “Strona.Kraków” (“Cracow.site”)- mainly cultural information, “City Magazine” and “Aktivist” - free magazines, for young people, information about concerts, musical and cultural events. They are both quite detailed, but there is definitely lack of a complete weekly program of everything that is happening in the city, including amateur sports, conferences, promotions, private initiatives and anything else.

28 Mancewicz S., „Relikt,..”, op. cit.

Finally, it is also money, that counts. In the year 2001 1,2 million zlotys (300 thousand euro) was spend by the authorities of Cracow on promotion of the city. It does not seem to be much, nevertheless in the year 2002, after a dramatic drop in the number of tourists visiting Cracow, this amount was even smaller and came to 798 thousand zlotys. 200 thousand euros for promotion of a “Cultural Capital of Europe” is definitely not enough, especially in the context of not only countrywide, but also worldwide crisis in tourism.

During the period of October and November 2002, Jagiellonian University carried out a survey (ordered by the Municipality of Cracow), aimed at local companies and institutions dealing with tourism, with a purpose of evaluation of the activities of the Municipality in the field of encouragement of incoming tourism. Results of the survey are shown in the chart below.

Figure 5. Evaluation of the activities of Municipality encouraging tourism (2001/2002)

very good 0% good not satisfactory 7% 33%

satisfactory 60%

Source: « Przyjazdowy ruch turystyczny w Krakowie 1.1.2001 - 31.10.2002 », Jagiellonian University for the Municipality of Cracow, Kraków 2002

This pie chart shows a pretty bad image of Municipality efforts for tourism encouragement. The surveyed were asked, what could help in this situation. Most answers suggested: • better coordination and planning of promotion of the city,

• higher spending on promotion and information, • promotion aimed at specific groups of clients, • creation of proper image of the city in and outside the country, • improving accessibility of the city and transportation infrastructure, • more information points (especially in English) • more public toilets, • changing the opening hours of museums, • handing the responsibility for information and promotion over to the professionals.

IDEAS FOR FUTURE

Basing on my discussions with people who have a lot to do with promotion and Cracow, with the others who have no idea about it, but have an idea about what they would like to learn and experience in the city; on articles from daily and weekly press and my own ideas, I will now describe some possible ways to promote Cracow. There are some general conceptions among them and some detailed marketing instruments, they could be combined or used separately. I put them in an accidental order. 1. The authorities of Cracow stated in the strategy of the city, that it should be a “final destination, not a place on the way”. Why don’t we show it the other way round? “Cracow as a gate to the world”. A gate for young people who come to study to Cracow and after some years of gaining knowledge here, they go on exchanges and scholarships and conquer Hiroshima, Crete, Nice, Monterrey and many, many other places (these students are a part of the city and the way they are perceived can contribute to the image of Cracow). A gate for tourists to discover the beauty of southern and eastern Poland (wild nature, traces of ancient tribes) and further - Central and Eastern Europe. Cracow is a window on other cultures: the Festival of Jewish Culture, which takes place in Kazimierz district is a perfect example. 2. Cracow is perceived as a “high society” city, where from time to time you can meet some actors in restaurants and poets, who live here, in the streets. Nobody shows thousands of young people, who study here and create a nice and lively atmosphere in the streets, 24 hours a day. They make this city alive, this should be used. It’s so nice to walk down the street and see young, happy faces (who additionally speak foreign languages..). The authorities should also try to locate

some departments of universities in the districts, where social life is gone despite the existence of some beautiful monuments and interesting places.

3. Maybe promotion of the city should be entrusted to somebody with interesting, even controversial personality, vivid imagination, tones of crazy ideas. Somebody like that could make the city more alive, intriguing for the tourists. He or she would create a lot of noise and commotion around the image of Cracow for example by organising happenings (“wrapping” famous buildings in materials, planting a forest in the Market square, graffiti on public buildings, climbing the tower of Town Hall, etc.) 4. There is a lot of beautiful old country cottages in the villages all around Cracow and even in the city, close to the centre. The spirit and lifestyle of countryside is still present in parts of some districts. This is a very interesting part of culture and tradition of Cracow, unknown for people from the outside. I think it would be a good idea to show it in marketing of the city, especially foreigners should be interested. It could be connected with some ecological projects, bike tours or horse routes for nature lovers, following the traces of “country spirit” (including whole infrastructure of bike rentals or stables for the horses, camping sites, etc.). 5. Giving a presidency over each season of the year to a different district: “Summer in Zwierzyniec”, “Winter with Kazimierz” or “Podgórze in the Spring”. It is an idea that would, in my opinion, help activating some forgotten districts and their inhabitants. City officials would participate in some part of costs and organise a better access with public means of transport to a given district for necessary period of time. The rest would be organised by the district authorities in cooperation with inhabitants, local organisations, institutions. The aim would be to show, what they have the best -monuments, nature or people, organisations, sport teams, clubs, music groups, etc. I think, that organisation of events like that would create a spirit of positive rivalry between the districts and would be a good way of engaging local communities in some common activity. Many different groups (disabled people, foreigners, elders) would have a good opportunity to integrate with each other. Each presidential season of the year should include, among other events, at least one two- days or three-days non-stop. For example a concert in Benedict’s fort in Pogorze,

connected with all-night-long opening and illumination of main monuments and institutions of the district, other events and happenings organised there. 6. Paris has its “Pariscope”, Cracow can have its “Krakowiaczek”. A weekly magazine giving information about virtually everything that is happening in the city, including culture, sports, amateur competition and private movie séances. I think that Cracow needs a compendium like this and this is not only my opinion. A fixed calendar of major events could be useful as well.

7. Theme routes would be a good idea for people interested in particular historical epochs. Following traces of the romantic epoch or of ”Young Poland” would be much easier this way. There could be also a route of “Social Realism”, route of beautiful, old cemeteries, graves of famous people, etc. There could also be a special bus line along each route. There already exists a company called Wymarzony Kraków (its internet address is the following: www.wymarzony.krakow.pl ), which offers theme trips all around Cracow: Social realism route (e.g. standing in a queue for “kiełbasa zwyczajna” - “common saussage”), Austro-Hungarian climate (e.g. fighting with sabres, wearing uniforms from the epoch, sleeping on a hay couch), Jazz in Cracow, Mysterious Cracow, etc. All of them are original ways to spend some great time in the city, away from traditional touristic routes, museums and boredom, doing unusual things, with people who live here and can tell many interesting stories and show magic places. This is a great way to show Cracow and promote it as a tourism destination, because it is full of mystery and fun. Authorities can use it as well, maybe even cooperate with companies like Wymarzony Kraków. It would be a win- win game. 8. Cracow “turns its back” on the Vistula river, there are some ideas how to change it.. “We could try to create a new Cracow quality, new climate in a different place. A kind of “free zone” for example, between two bridges: Dębnicki and Grunwaldzki. Free from any interventions of city authorities. Let inhabitants of Cracow do what they want to do there. Let the restaurants have their open-air branches, let the people build the scenes, where the youth could sing and dance, let the men of trade sell their “oscypek” and “ciupaga”. Let this place live and become “trendy” and keep the authorities away with their fees, rents and taxes for a year. Maybe after a year

this would be a place where people come to experience something unusual and strange.”29 9. Cracow has always been advertised as a “magic place because of its monuments, history, special atmosphere. Some people believe that a magic stone - source of energy (called czakram) one of 7 stones - 7 energetic centres on the Earth - spread all around the world by god Shiva is located on the Wawel hill. People used to come from all over the world to this place to “refill their batteries” with supernatural energy of this stone. Unfortunately, authorities of the Wawel museum (supported by the Bishop of Cracow) stated that: “There is no magic power in the Wawel castle and the belief in czakram does not conform with the catholic religion and does not correspond with solemnity of this place of highest cultural and historical values”. Touching the wall in the place, where the stone was supposed to lie has been strictly forbidden and Wawel ceased to be an “Occult Centre”. “We shouldn’t kill the legends, belief in czakram doesn’t do any harm to anyone - mentions Elżbieta Lisowska PhD in Religion Sciences from Jagiellonian University. - I don’t understand this absurd decision. A “Magic Place”, whatever one might think about it, could make Cracow a goal for thousands of pilgrims. These people would spend a lot of money here - comments an architect Marek Dunikowski, member of Public Committee of Renovation of Cracow Monuments”30. 10. Cracow has around 2500 restaurants and pubs, most of them in original locations, arranged in interesting styles, each one has its own particular atmosphere and menu. One could try to promote the city by showing is as a place where people love good food and have a lot of it. I am sure that this idea would work with some nations, like French for example. 11. Showing the city as a great place to live is also a good policy. Young and independent people come to settle in the region, usually in some faraway places but close to their eccentric friends, who already have a house there, after the next friends come to this hip neighbourhoods and slowly, but surely the city infrastructure reaches them and “the city comes to them” although they were settling almost outside its borders31.

29 Mancewicz S., „Relikt,..”, op. cit. 30 Knap J., ”Energia negatywna” („Negative energy”) in „Wprost” , 17 June 2001 31 Florida R., “The Rise of creative Class”, Basic Books, 2002

12. The Social Committee of Renovation of Cracow Monuments spends millions of zlotys, every year, to renovate the buildings, their interiors and surroundings, all over Cracow. They could be connected with each other with tourist routs, showing the history of the city, long forgotten and neglected, nowadays discovered again.

My general conclusion is following: the image of Cracow should be “younger” and more people-related. Promotion should be focused on local climate, which is created not only by places and things, but mainly by people. In my view there is one more gain from realisation of some “crazy” ideas and projects and giving the city a new, intriguing face: once people get interested in this new image, when two or three projects succeed and gain high publicity, fewer conventional marketing methods are going to be necessary. Some billboards and advertisements in internet should be enough. Apart from some “fresh image” ideas, which might be hard to realise, there is also improvement in traditional marketing methods necessary. In current marketing activities of local government lack of segmentation of the cluster clientele is visible above all. Offer is the same for Polish and foreign tourists, usually regardless their age. Marketing should be more precisely targeted. CONCLUSIONS

IS IT A CLUSTER????

The number of people visiting the city and the region, the interconnections of the tourism industry with the others in the region, and synergy effects resulting from cooperation of the increasing number of establishments, institutions and local authorities, show that we are really talking about a cluster.

WHY HERE? There is number of reasons, why Cracow became a heart of a tourism cluster. In my opinion the competitive advantage of the city is based on following key factors of success:

1. Historical heritage and cultural affluence. The fact of being a capital of Poland for a long time influenced the history of the city and provided it with the resources to boost its development throughout the ages. The kings, who resided in the city, were investing heavily in the architecture, culture, arts. All this enriched Cracow, made it a treasury at the European scale, it attracted more and more artists and was becoming more and more famous with every year. Now the city is a legend, famous for its heritage, artistic atmosphere, luring tourists from all over the world. And it has one more strength - people, who live here, love this place, its values, history and culture and they are a treasure themselves. Tourists appreciate Cracow even more and experience it more fully, being able to discover the city with its great inhabitants.

2. Natural variety. The beauty of the landscape accompanies the culture and the history. Many National Parks, forests, nature-protecting establishments in the region and green spaces in the city offer peace and calmness unusual for other cities of the same size as Cracow.

3. Many ways to get there. There are many famous cities, which are not much visited and are being forgotten with the flow of time, because nobody knows how to get there. Fortunately, this is not the case of Cracow. Airport, highway and railways ensure good connections with whole country and with major directions in Europe. This is one of the factors, that helps the city to execute its metropolitan functions and it facilitates the creation and existence of the cluster.

PROBLEMS AND CHALLENGES I think that there are three main concerns, as regards the current situation of the cluster, which might disturb its further development.

1. Transportation infrastructure within the cluster. It is relatively easy to reach the city, but Cracow itself is literally jammed in the rush hours. This problem has been faced by the local authorities and there are already major investments in realisation, planned to be finished in the next years (Tischmann-Speyer Transport Centre "The New City", Multi-level parking in the centre of Cracow, the lines of "fast tramway").

2. Investment policy of local authorities does not favour tourism-related projects. There is a need for a conference complex and professional sport indoor and outdoor grounds, where international business meetings, sport and music events would take place, which would ensure rise of number of tourists in Cracow. Authorities do promote construction of new hotels, but these are mainly high-standard establishments. The tourism base is used at the moment only in 55%. There is a need of medium-standard hotels in the city and of more balanced tourist flow during the year (60% of tourist come in summer). 3. Promotion of the cluster. Cracow is famous and well known for its artistic atmosphere, treasures, monuments, natural variety, etc. Local authorities think that it is enough to keep the loyal clients coming here and attract the new ones. There is a lot of people however, who think otherwise. First of all, the authorities should employ professionals and artists to take care of promotion of the city as a destination. Second of all, they should not limit them in any way, only encourage to think in some directions (for example in direction of promoting Cracow with all its districts, to develop tourism activity there). Thirdly, the promotional activities should be aimed at gaining sustainability of tourism flows over time32.

Overall, despite some problems, the situation of Cracow seems to be quite good, basing on strong foundations, but in a need of radical changes, especially as regards promotion of the cluster. The strategy of development of the city (as well as the one of the region of Malopolska) seems to be coherent and complete and has big chances of succeeding, as it has strong support in the local communities. Local authorities recognized most of the problems of the region and want to resolve them in cooperation with national and European authorities.

32 Other problems and solutions connected with the issue of promotion of the cluster were described in full version of the thesis.