GENERAL PART
The aims of the National Tourism Development Programme are as follows: to assess recent changes in the tourism sector; to elaborate a further tourism development policy and means for its implementation which would encourage development of the Lithuanian tourism sector; to establish priorities for state aids, investment promotion and investment priorities; to enhance the scope of local and foreign tourism; to promote the scope of Lithuanian export; to table means for forming Lithuanian image and popularising tourism.
The programme focuses on the service sector which forms gross tourism product of the country and determines the nature of its application. Local population and foreign visitors use tourism services. Tourism sector covers such activities as travel organisation, accommodation, catering, information, and entertainment, rent as well as any other services related to tourism.
A tourist is a person who, with the aim of educational, professional-businesslike, ethnical, cultural, recreational, religious or special purpose travels within or through the country and stays there at least for one night (no more than for one year) outside his/her permanent place of residence, and the goal of their trip is other than hired labour which is remunerated either in the country being visited or in the country of permanent residence.
Foreign tourism is an effective means of increasing export of domestic services and promoting the use of domestic products and goods and use of tourism resources, as well as preserving thereof. Foreign tourism is one of the most effective means of introducing Lithuania to the world community and creating the image of Lithuania abroad.
Local tourism also contributes to the development of tourism services. Trips by local Lithuanians have many values – they help to get acquainted with the homeland, to create own personality and teach how to cherish natural and cultural values. Local tourism is a means of recreation contributing significantly to the qualitative results of the local labour.
The variety and supply of the tourism services rendered have impact on the circus of the respective users; on the other hand, a user solvency influences the use and demand of various services. In economic terms, the market determines the relationship between the supplier and the user; therefore, a status of a local or foreign user is more a statistical and social concept.
While drafting the present programme, the results of the National Tourism Development Programme for 1993 have been taken into consideration. Quite a number of means established in the said programme have been already implemented. That is why a newly drafted programme emphasises further means for promotion of the tourism product and possibilities of disseminating information about tourism and services both in Lithuania and abroad. For the development of individual types of tourism (rural tourism, cultural tourism) target programmes are being elaborated; hence, National Tourism Development Programme focuses only on major aspects of these types of tourism.
1. MAJOR PRECONDITIONS AND PROBLEMS FOR TOURISM DEVELOPMENT
1.1 General preconditions
1.1.1 In Lithuania there exist favourable conditions for tourism and its development: favourable geographical location, plenitude of tourism resources; interest shared by miscellaneous ethnical groups in Lithuania; currently revived relations; improvement of general and international tourism image of Lithuania; abundant neighbouring tourism markets; interest in Lithuania as a new region for tourism.
1.1.2 Major social-economical preconditions for tourism development are as follows: sustainable macroeconomic situation and economic growth; increased foreign investments; privatisation process, increased scope of foreign trade and international relations of Lithuania; enhanced standard of living and purchasing capacity; use of existing and new manufacturing capacities, employment and creation of new jobs.
1.2 Logistic preconditions
1.2.1 System of transport. Lithuania can be entered by all means of transport. Owing to its geographical location, Lithuania is a transit state between the states of Western Europe and CIS; in addition, it is also a promising North-South transport corridor. The currently applied Transport Development Programme creates a favourable background for integrating Lithuanian transport systems into the European network of transport infrastructure; even more so, it creates favourable conditions for economic activities within the tourism sector and for the development of foreign tourism. Hence, tourism is an important means of return on state investment. Vilnius International Airport has a well-developed infrastructure of customer and aircraft service; however, representatives of international hotel chains and major tourist companies call for expansion of the said airport and for a betterment of the airport-city connection. Lithuania is a state of railway transit and as such is very attractive to CIS citizens. Cars are most popular and widely used means of tourism transport – 50 routes are currently in operation connecting Lithuania and European states. Thus, given a further improvement of local road quality (in particular – local hard road pavement), a growth in a number of car tourists would be ensured. Sea transport is a field least developed for tourism – only 4 passenger routes are operating. Klaipeda seaport has no modern passenger terminal; passenger transport is carried alongside freight transport, there is no connection between the Scandinavian countries, nor cruise or yacht tourism. As a separate problem, transport activities and the reliability of thereof in major cities should be underlined. In particular, transport system of Vilnius city poses a greatest concern since it has not been elaborated for a town which is also a capital of the state and, thus, do not correspond to management or business needs of the local population, nor corresponds to the requirements for states of emergencies. State aids into the transport infrastructure are insufficient and, given the flows of transport and passengers, should account for approximately 1.5% of the total GDP as per European Commission proposals.
1.2.2 Information and communication systems. Any town in Europe and the rest of the world can be accessed directly from any part of Lithuania. In the implementation process of Communications Development Programme, the existing communications network is modernised, thus creating favourable conditions for tourism business.
1.2.3 Accommodation network. In 1997, the tourist accommodation network was made of 166 hotels, 20 motels, 7 tourist bases, 4 campings, 285 (239 of which operate only during certain seasons) recreation dwellings, 32 sanatoriums and private households for tourist accommodation. Over 4 years a number of hotels increased by one and a half time. Recreation dwellings currently renovated are later on transferred into hotels. Unfortunately, due to the lack of resources, part of the recreation dwellings were not used and are starting to deteriorate (in 1995, there were 321 recreation dwellings). In the field of accommodation entities, a shortage of motels and campings is very clearly felt. Another problem faced by accommodation entities network lies in the fact that many such dwellings were designed and constructed in accordance with the Soviet standards disregarding market conditions. Even today stereotypes and limitations applied in certain designs ignore market requirements and impede the development of this business.
1.3. Legal preconditions
The field of tourism is directly regulated by the Law on Tourism of the Republic of Lithuania. In the Law there are defined means of state tourism policy and planning, namely National Tourism Development Programme and regional projects. The state commits itself to do the following for the promotion of tourism: to create favourable conditions in the procedure of issuing visas as well as for proper functioning of border check points and customs offices for the local and foreign travellers; to form tax policy favourable for foreign tourism and for tourism business in general; to establish tourism information system and country’s tourism image, properly regulate the use and protection of tourism resources. Domestic and foreign tourism defined in the Law as state priority is designated as an export service. The established minimum requirements of tourism services will help tourism representatives rationalise their business, lessen negative factors done to the image of tourism business, and improve quality of tourism services. However, tourism services frequently defined within the context of small and medium-sized business are governed by other laws (e.g. those on protected areas) and legal rules which were adopted without having assessed the needs and problems of as well as the impact on tourism and the development thereof. As a result, negative legal aspects unfavourable for tourism business in the field of travel organisation or attracting investments have become apparent. The legal basis should be supplemented by rules on the use and planning of tourism resources.
1.4. Organisation preconditions
Tourism activities are directly related to a number of public and economic fields of activities and are stipulated by interstate relations; therefore, the representation of the interests of tourism sector has an interdepartmental nature. The co-ordination of tourism activities is determined also the allocation and implementation of functions by public administration and local authorities. The Law on Tourism defines the tourism functions designated to regional and municipal bodies. So far the institutional tourism structure has been formed completely in some regions and municipalities. The biggest problem is the extent of competence granted to public institutions for the solution of tourism related interdepartmental issues as well as insufficient co-ordination of activities, including information supply.
1.5. Formation of the country’s image
1.5.1. Significance of tourism. Tourist information services, the use of resources and opportunities not only determines, but also checks the formation of the country’s image on the international scale. Parties participating in the formation of the image are economic formations which create, sell and advertise certain tourism services; public institutions which implement the protection and control of nature and cultural tourism as well as the regulation and planning of the field of tourism, dissemination of information, elimination of negative factors damaging country’s attractiveness for tourists. One third of the respondents from foreign tourism companies underlined the following major problems impeding the formation of the country’s image: shortage of accommodation facilities, particularly in Vilnius; lack of service culture, entertainment, public toilets which are also in a very bad condition, unsatisfactory functioning of customs and border check points, difficulties in getting visas for CIS citizens, insufficient level of information co-ordination.
1.5.2. Negative factors. Factors reducing the tourist attraction of the country are as follows: a poor choice of accommodation facilities, shortage of hotels members of international hotel chains, extremely poor entertainment industry; shortage of premises for hosting international conferences and not readiness of the existing premises; undeveloped exposition and non-preparedness of natural and cultural values for tourism; lack of information on tourism services as well as objects and areas of tourists’ interest; negative or partial information on Lithuania in foreign means of mass media; criminal situation; problems in getting visas and customs formalities at border crossing check points.
1.6. Measures and action priorities
1.6.1. To solve issues related to the construction of Klaipeda passenger seaport (terminal) and yacht jetty in Palanga as well as increase a number of sea passenger routes into Scandinavian countries.
1.6.2. For regions (municipalities) to analyse possibilities and work out the measures necessary for the revival of water routes of the river Nemunas and jetties;
1.6.3. For regions (municipalities) to prepare construction designs for campings, motels and objects of roadside service as well as work out the measures for the implementation thereof;
1.6.4. To revise and make necessary amendments to secondary legislation and other rules on the issues of allocation, rent, use and design co-ordination of land plots in order to speed up the development of leisure service infrastructure and encourage foreign investments for the development of the tourism sector in Lithuania.
1.6.5. Elaborate typical rules governing the formation of Tourism and Recreation development schemes and regulations regarding the installation and use of recreation territories (zones);
1.6.6. Work out legal measures governing resorts and sanatoriums;
1.6.7. Expand administrative competence of public institutions, local municipalities and national parks implementing state tourism policy by involving them into the process of drafting solutions and co-ordinating them with tourism and tourism related issues (taxes, business, use, territorial planning of natural and cultural values (tourism resources) etc.);
1.6.8. Expand functions of public tourism institutions in the formation of country’s image.
2. TOURISM RESOURCES AND SERVICES
2.1. Natural tourism resources
Forests, lakes, rivers, the Baltic Sea, interesting geo-morphological structures and aesthetic landscapes suitable for tourism make around one third of the total area of the country. General attendance of areas intended for tourism is estimated at more than 60 million people per annum. Lithuania has 5 national parks and 30 regional parks (8.5% of the total land area of the country) which enjoy most favourable conditions for tourism. Natural complex of the Lithuanian seaside has best available conditions for tourism in the whole Baltic Sea region. One third of woods is suitable both for recreation and hunting. The network of rivers and lakes can be applied for water tourism. 194 parks, 353 natural monuments and 130 reservoirs under the state protection can also be of educational tourism value. Those natural resources should not be only a subject to natural protection; they should serve as resources used for educational tourism and recreation. Those resources are impeded from being used for tourism by the following factors: not readiness, shortage of recreation and accommodation basis or its non-compliance with the current hygienic requirements, lack of information, not readiness of local public authorities and the status of the so-called ‘dependant’. The use of resources not prepared for visitors is harmful to their protection and lessens their attraction to tourists.
2.2. Cultural tourism resources
The abundance of cultural heritage (over 10 thousand objects enjoying the status of a monument) create preconditions for the development of cultural tourism. However, only 350 objects are currently attractive to foreign tourists, a number of those used is even smaller. Lithuania is an active member of European project Way of Baroque, it also participates in Amber Way and Hanza Way projects. Castles, old towns, manors, cloisters may become separate products for cultural tourism. Other important resources of cultural tourism resources are such as museums, exhibition and art centres, theatres, handicraft and ethnical culture. Areas significant to the Lithuanian independence, old towns and sacred architecture and fine arts, ethnical architecture, local museums and folk art, cultural centres and thematic events – all these are unused opportunities for working out new tourism routes. Major problem is a not readiness of these objects for foreign tourists’ visits, lack of information and popularisation, undeveloped marketing activities, lack of enterprise, little attention to local tourism. Use of cultural heritage for tourism is widely covered under National Tourism Development Programme which distinguishes three uses of the said heritage: expositional, infrastructure and miscellaneous. Limited state financial funds make it impossible to prepare many objects of natural heritage for cultural and tourism purpose. Therefore, a mechanism should be elaborated defining the way in which private financial funds should be used as an alternative means of cultural financing policy and as an alternative to the deterioration of natural heritage. Legal and economic conditions as well as the procedure of rent and privatisation of cultural heritage should be established which should be adjusted to render tourism services. Organisation of museum work should be market oriented; the base and expositions of museums of national importance should be extended. In general, the marketing measures should be applied in the field of culture; activities should be consumer oriented and co-ordinated with tourism companies. Cultural tourism and active development is an alternative to deterioration of heritage, an effective means of building general public awareness and acquaintance with the homeland, an effective means of introducing Lithuania to the world and creating its image.
2.3. Human resources
Quite a number of places of employment in Lithuania are in the field of foreign tourism. A number of employment in tourism sector, i.e. servicing foreign tourists, accounts for no less than 4-5% of the total number of the labour force of Lithuania (73 thousand). Accommodation sector (hotels, in particular) is susceptible to employment. Non-obligingness to customers, however, is a second nature of the employees of the service industry.
2.4. Accommodation services
The quality of a Lithuanian tourism product is mostly determined by accommodation companies and sanatoriums that had 37.7 thousand places available in 1997. Total number of accommodation places covering interdepartmental dwellings and private households accounts for approximately 60 thousand (in 1992 there were 62.4 thousand places). A number of places in hotels has dropped from 10.854 in 1992 to 9.098 in 1997. General level of accommodation services remains to be low, since without investments major hotels have done little to improve the service quality, while a majority of recreation dwellings and sanatoriums have shown little signs of improvement. Despite the fact that only 32% of the total capacity of domestic hotels was used (for small hotels the respective figure stands at 80%) in 1997, major cities suffer from the shortage of hotels offering high quality services and suitable for hosting international events or of large tourism-oriented hotels. In the province, the problem with hotels is both qualitative and quantitative which can not be solved due to a decreased number of travellers. General level of hotel management and marketing remains to be low. Due to decreasing tourist flows from the closed eastern market and no noticeable growth of tourist flows from the West, the quality of other accommodation services is given no incentive for improvement and attracts no many major foreign investments. Individual tourists from western countries underline the shortage of campings which impedes the development of car tourism. Hotels for recreation and recreation dwellings suffer from their seasonal nature, whereas our tax system is not adapted to such a problem.
2.5. Transport services
In Lithuania tourists can use services of air, land and sea transport. Foreign tourists are not satisfied with the local railway network offering low quality services. For inland travelling foreign tourists use car transport only. Quality of transport services directly depends on the fact if the vehicle base is from time to time renovated, if the quality and service culture is improved, if stations are renovated and modernised.
2.6. Catering services
Catering services is one of most rapidly growing tourism services since the majority of users of catering services is made of local population requiring any major investments. The core of highest quality catering companies is focused in major cities and health-resorts. In the light of the decline in needs for public catering and in the course of the privatisation process, a number of catering companies in province has decreased. However, the situation has begun to change over the past few years de to a growing demand for this kind of services. There is still some room for improvement in the field of meals quality and service culture.
2.7. Leisure and entertainment activities
One of the reasons why people travel is to do something special for their free time and take excitement in various sorts of entertainment, which in Lithuania’s case, is quite a big problem. So far, major tourist attractions in Lithuania have been natural and cultural means. Nothing has been made for the establishment of entertainment potential, local initiatives are not encouraged; investment environment is not favourable for entertainment business. Therefore, municipalities should develop investment projects for leisure and entertainment centres as well as come with the means for their implementation. Entertainment centres operating in resorts could help to prolong a tourism season and solve the accommodation problem. The development of certain kinds of entertainment is impeded by non-differentiated limitations under the Law on Protected Areas (e.g. as regards seaside facilities), ban to provide casino services. Little use is made of important musical or theatrical potential of Lithuania, since neither separate creative institutions, nor the Ministry of Culture provide tourism companies and other institutions with the schedules of the forthcoming musical and cultural events.
2.8. Tourism information services
Tourist guides, Tourism Information Centres and other individual entities provide tourism information services. The provision of those services is regulated under the Law on Tourism. There are 16 Tourism Information Centres operating in Lithuania. The services of those centres are used both by foreign tourists and local citizens. The principal function of those centres is to enhance the volumes of foreign tourism coming to the country or its certain regions and to disseminate exhaustive information to coming visitors. In Lithuania Tourism Information Centres are established by local municipalities or local administrative bodies using the experience of western countries. Problems most acutely felt are insufficient awareness about and attention given to this activity on site, lack of experience, shortage of co-ordination, no existing tourism information system or its network.
2.9. Other services
Tourist services include such daily services as trade, financial brokerage, rental, medicinal and hygienic services. Foreign tourists emphasise repeatedly a low quality of those services, whereas the level of hygienic services does not satisfy even local needs.
2.10. Rural tourism
Richness and variety of nature enjoyed by separate regions accompanied by objects of natural heritage and relatively good road network contribute to the development of rural tourism. Rural tourism is getting more and more popular among city-dwellers. In such way rural tourism acts as a supportive business in rural areas able to yield around 30-40% of total income; it is also becoming an important trend of regional development in land plots of low fertility. These issues are covered in detail under National Tourism Development Programme. At present, 150 farm holdings are engaged in the provision of medium and high quality rural tourism services. However, accommodation available in a majority of farm holdings wishing to render rural tourism services does not comply with norms applicable in respect of visitors and calls for additional investment. The majority of rural tourists come from CIS countries. People living in rural areas are not prepared for foreign tourism (except for foreign tourism from CIS countries) and due to the lack of experience of a host (communication and language barriers) and lack of business skills. Provided local consumers gradually differentiate and increase in number, provided quality and scope of services is improved and information is disseminated, rural tourism would be given every opportunity of becoming an important part of rural economy. State policy and investment related measures should help farmers receive support from Rural Support Fund, Forestry and other funds and compensations against limitations to carry out economic activities. The state (municipalities) should also be active participants in dissemination of information and training of providers of rural tourism services. Since rural tourism is an individual type of tourism, entry limitations, crime, lack of information are major drawbacks hindering rural dwellers to involve in those activities. Priority should be given to dissemination of information on rural tourism, renovation of material base and training.
2.11. Measures and action priorities
2.11.1. To work out and approve tourism organisation schemes and development measures for regional and national parks as well as encourage the renovation of accommodation base.
2.11.2. For municipalities and administrative bodies of regional and national parks – to expand active recreation facilities, tourism information activities, fix signs of tourism information centres.
2.11.3. To draft project proposals and implementation measures for manors and other objects of cultural tourism heritage.
2.11.4. To elaborate mechanism for attracting and applying alternative financial resources as part of financial policy of cultural heritage by means of creating conditions for long-term rent of separate objects of heritage or privatisation thus preparing them to render tourism services.
2.11.5. Encourage local and foreign investments into the renovation of heritage objects by revising and applying laws on Charity, Support and Concessions, by applying municipal and state incentive system, by eliminating bureaucratic formalities and by shortening terms for project co-ordination, by differentiating and lessening requirements.
2.11.6. To define general differentiated requirements to prepare for exposition and visiting of objects of cultural heritage.
2.11.7. For municipalities of major cities and resorts – to elaborate drafts of leisure and entertainment centres, recreation and trading zones by creating possibilities for attracting private investments necessary for the implementation thereof by means of a tender announced on a state-wide scale.
2.11.8. To draft and approve development measures of cultural tourism and prepare cultural tourism routes introducing Lithuania.
2.11.9. To draft and approve supportive and information measures for rural tourism.
2.11.10 Solve the issue of expanding museums of national importance.
3. TOURIST FLOWS AND EXPORT OF TOURISM SERVICES
3.1. Foreign tourism
A number of foreign tourists coming to Lithuania had been decreasing till 1995; since 1996 the opposite trend has developed – tourist flows have been increasing each year by 19% in 1996 (excluding tourists who came by train) and by 6% in 1997. The forecast for 1998 is over 15%. A number of foreign tourists (visitors staying for a night in Lithuania) in 1996 accounted for 829 thousand, in 1997 – 1012 thousand (an increase by 22%). In 1997, a number of foreign tourists staying for a night in accommodation companies increased by 13% in comparison with 1996. Major tourist flows in 1996 divided by countries in 1997 distributed as follows: CIS – 51% of the total number of tourists who actually visited Lithuania, 34% - from Latvia and Estonia, 7% - from Poland, 2.1% from Germany. 71% of all travellers came by roads and 23% came by train. Foreign tourists accounted for 27% of all visitors who came to Lithuania (in 1996 this figure stood at 23%). In 1997 Lithuanian resorts and recreation dwellings accommodated 245 thousand people, out of which only 15% were made of foreigners. The majority of those foreigners came from Poland – 41%, from Belarus – 26%, from Russia – 13% and from Germany – 8%. No polls were carried out with local tourists.
3.2. Export of tourism services
The percentage of tourists who came to Lithuania in 1997 can be divided up by the purpose of their visit as follows: 46% came for business activities, 29% - came to visit friends/relatives, 15% came for recreation and the remaining 10% - for any other purpose. There were 58 thousand foreign tourists who used services of travel agencies. Average expenditure per capita stood at 1.200 Litas (in 1996 the respective figure was 1.130 Litas), average expenditure per day – 158 litas (126 litas), average duration of stay – 8 days (9). The above figures signify that Lithuanian tourism is not developed yet and that it is obvious that the more developed tourism is, the more tourists tend to spend. If developed, export of tourism services would increase which in 1997 reached barely 300 USD (covering services sold and goods available per each tourist). Gross tourism product of Lithuania in 1997 stood at over 300 million USD.
3.3. Measures and action priorities
3.3.1. To give priority to measures intended for development of cultural, rural, recreation and business tourism.
3.3.2. To seek the establishment of international organisations and business centres in Lithuania by giving more privileges for competing with other countries, to increase a number and extent of international events and exhibitions to be held in Lithuania.
3.3.3. To facilitate and simplify entry procedures (documents), to harmonise the issuance of visas with EU acquis.
3.3.4. Pursuant to accession to EU, to seek visa-free treatment with more countries.
3.3.5. To improve work at border crossing points, organise bilateral checking procedures of tourists, etc.
3.3.6. With the aim of combating crime rate, to stir up the police work in tourist zones.
3.3.7. More actively and extensively supply information on Lithuania in foreign mass media.
3.3.8. Carry out tourist opinion polls; establish defects existing in tourism sector and implement measures for the elimination thereof.
4. INCOME AND PROSPECTS OF TUORISM
4.1. Income of foreign tourism
According to the data of Lithuanian Bank, in 1997 foreign tourism generated 1.438 milliard Litas of income, this figure including tourist expenditures on goods and services; in addition, Lithuanian carriers received 157 million Litas of income for the carriage of non-residents by international routes. In 1996, accordingly, foreign tourism generated 1262.2 million Litas of income and Lithuanian carriers received 117.5 million Litas from the carriage of non-residents. Average annual growth of foreign tourism income (carriage included) stood at 15.7%. Estimated revenues from foreign tourism in 1997 totalled around 408 million Litas (collected in the form of five various taxes and social security contributions). VAT alone yielded 222 million Litas (nearly 10% of national VAT).
4.2. Forecasts
The forecasted growth of foreign tourism in respect of the total GDP in the period of 1998-2002 is expected to reach an increase of 6 percentage points from 4.2% to 4.8%; such forecasts are based on existing trends in tourist numbers and actual changes in GDP. General income from foreign tourism shall increase from 1.6 milliard Litas in 1998 to 1.89 milliard Litas in 2002; revenues shall reach 500 million Litas. Such estimates can be reached if tourist flows would grow from 1.2 million in 1998 to 1.7 million in 2002. A respective increase in a number of places of employment is to grow from 76 thousand to 90 thousand. Employment in the existing places of employment and creation of new places will be determined by an increase (decrease) in a number of tourists, i.e. opportunities to entry, growth of investments in tourism sector, etc. Seasonal nature of this particular sphere of services will remain unchanged and so will fluctuation in a number of labour engaged in rendering those services.
4.3. Measures and action priorities
4.3.1. To utilise state and municipal target measures to develop Lithuanian tourism product and to raise the competitiveness of the same;
4.3.2. To expand possibilities of tourism export by facilitating entry procedures for foreign visitors, by stirring up general and separate marketing of tourism products and dissemination of information;
4.3.3. To safeguard the implementation and control of state and municipal action measures.
5. INSTITUTIONAL STRUCTURE AND MANAGEMENT OF TOURISM SECTOR
5.1. Structure and levels of management
Institutional structure of tourism sector is comprised of State Tourism Department at the Ministry of Public Administration Reforms and Local Authorities, regional and municipal units; Tourism Board; associations of business people. State tourism sector is managed by State Tourism Department subordinate to the Ministry of Pubic Administration Reforms and Local Authorities as well as to regional and municipal administrative bodies. The Department works on and implements tourism development programmes under the Law on Tourism, co-ordinates tourism related activities of public administrative, regional and municipal bodies, activities of national parks. It also adjusts and submits conclusions on documents regulating territorial planning of tourism and the development of recreation infrastructures, as well as carries any other functions prescribed to it by the Law.
5.2. Regional management
Regional administrative bodies and municipalities carrying out tourism management can encourage development of tourism services through adjustment and planning of mutual interests. Since various tourism services is a small and medium size business, municipalities could adopt that kind of approach in their respect and apply such target measures which would create more or less favourable conditions and, at the same time, would enhance the regional potential and attractiveness. At present many tourism units are in the process of formation in a majority of regions and municipalities.
5.3. Tourism management
The Law on Tourism defines Action areas of Tourism Board. Principal function is to represent interests of tourism business while implementing state tourism policy. Tourism Board together with tourism business associations jointly participate in elaboration of tourism draft laws and marketing measures. Tourism Board will be a new positive element in the development of tourism sector.
5.4. Measures and action priorities
5.4.1. To designate personnel in regional and municipal administrative bodies to solve tourism related issues;
5.4.2. To expand network of tourism information centres;
5.4.3. To organise and safeguard work of Tourism Board.
6. CHANGES IN OWNERSHIP RELATIONS IN TOURISM BUSINESS
6.1. Course of privatisation
During the first period of privatisation (1991-1995) 50 tourism companies were privatised partly or in full, including 35 hotels and 82% of trade and public catering entities planned for privatisation. A number of private hotels in 1997 accounted for 70% of the total number of accommodation companies. A speedier privatisation is needed in respect of state-owned (municipal) hotels. In order to speed up privatisation of accommodation and public catering companies, particularly in old towns, national and regional parks, legal and bureaucratic barriers should be eliminated which slow down the privatisation process as well as jointly decide on the issue of land ownership. Limitations to tourism (leisure) activities prescribed by the Law on Tourism should be revised, differentiated and explicitly defined; the state should establish target compensations for limitations on the ownership rights.
6.2. Measures and action priorities
6.2.1. To finish privatisation which shall focus not only on the price of the privatised object, but also on the increase of volumes of investments and on involvement of accommodation companies into international chains of hotels. Best means to achieve this aim is an international open tender.
6.2.2. In order to solve problems of Lithuanian resorts a resort development strategy should be elaborated. As a means of restructuring resorts, an organisational project needs to be prepared.
7. TOURISM SPECIALIST TRAINING AND IMPROVEMENT OF PROFESSIONAL SKILLS
7.1. Specialist training
Tourism specialist training is directly affected by the growth of tourism service sector. Tourism specialists are trained in Vilnius, Kaunas, Klaipeda, Siauliai, and Utena higher schools. A couple of new schools have been opened which train tourism specialists: Klaipeda tourism school and Silute school of tourism and domestic services. New curricula have been introduced in Panevezys Light Industry School and labour market centres. The training covers the following curricula of the tourism sector: hotel administration, tourism administration, and hotel and tourism administration. A course on hospitality and reception of guests is offered in rural schools of agriculture. However, the issue of primary importance is improvement of skills of tourism specialists and training of tourism enterprise.
7.2. Needs of tourism specialists
No methods have been worked out so far which would analyse and forecast the needs of tourism specialists. Short-term forecasts are provided by Lithuanian Labour Exchange and by training institutions themselves. In order to determine specialists’ needs a co-ordination group should be established comprised of representatives of Ministries of Education and Science, Social Security and Labour, Land and Forestry, Tourism Department and any other tourism related institutions. Specialist training and training curricula should be standardised. All related social parties, including employees, should be involved in the process of drafting the said standards and requirements. To achieve this end, a specialist group is to be formed at the Specialist Training Centre at the Ministry of Education and Science which will define training priorities, organise the standardisation process, constant revision and monitor the execution of the same. High schools should be participating more actively in specialist training by introducing new courses on specialist training and special master studies.
7.3. Measures and action priorities
7.3.1. To elaborate and make special training appliances, methodical recommendations and any other scientific-information material;
7.3.2. To work out training standards and curricula of tourism specialists;
7.3.3. To make a forecast on the demand of tourist specialists up till 2005;
7.3.4. To organise courses on improvement of skills for tourism employees, regional and municipal specialists, and lecturers of teaching institutions;
7.3.5. To organise and finance participation of teaching institutions in Lithuanian tourism exhibitions and organise trips of teaching specialists to tourism exhibitions abroad.
8. REGULATION AND CONTROL OF TOURISM SERVICES
8.1. Consumer protection and requirements for supply of services
Before September 1998, the Company Law regulated supply of tourism services. Pursuant to the established procedure, State Tourism Department issued licenses to entities providing tourism services at that time reaching a number of 360. Regulation of tourism activities largely depends on its international character due to its relation to foreign consumers; it also depends on maintaining high quality services and consumer protection. Thus, having taken into account the experience of foreign countries and having harmonised it with EU directives there have been determined minimum requirements for the supply of tourism services and conditions necessary for consumer protection. In order to implement the law appropriate rules will have to be worked out regulating supply of tourism services and business entities will have to be issued special certificates registered in Register of Tourism Services. Norms and requirements stipulated in the Law on Tourism form a legal basis for preparation of specific tourism standards and classification systems to be used then by business entities for the planning and organising supply of tourism services. Main point of all requirements is to create conditions satisfying consumer needs and ensuring fire-prevention and common safety, hygienic norms and qualified service. These standards will form a legal basis for a consumer to lodge any complaints against suppliers of services, monitor the compliance of those norms and classify services as a means necessary for tourist information. The law stipulates that legal acts when adopted should be assessed by appropriate tourism structures and be implemented.
8.2. Measures and action priorities
8.2.1. To ensure that normative acts on the supply of tourism services be implemented.
8.2.2. To provide statistical data as prescribed by the Tourism Law.
9. INTERNATIONAL ASPECTS OF TOURISM DEVELOPMENT
9.1. Lithuania taking part in international tourism relations
State Tourism Department is a member of BTC (Baltic Sea Tourism Commission) as well as an affiliated member of WTO (World Tourism Organisation). Ever since 1993 WTO has been publishing statistical data on Lithuanian tourism provided by State Tourism Department. Lithuania has entered into international co-operation agreements in the field of tourism with such states as Greece, Turkey, Uzbekistan and Poland and is planning to conclude the same with Russia, Italy, Spain, Portugal and Bulgaria. In the process of EU integration and on the basis of EU directives, Lithuania will have to ensure free supply of goods, competitiveness, qualified services, correct information and consumer protection within EU internal market as well as will have to create possibilities for free movement of people. Owing to the shortage of financing, representation of Lithuania on the worldwide scale is not satisfactory and calls for improvement.
9.2. Measures and action priorities
9.2.1. Major international relations should be maintained with the neighbouring countries as a potential and priority tourism market (CIS, Scandinavian countries, Germany and Poland);
9.2.2. To establish Tourism Information Centres (missions) abroad and to secure dissemination of information;
9.2.3. To accede to WTO and European Tourism Commission.
10. TOURISM MARKETING
10.1. Tourism information and advertising
In Lithuania tourism marketing activities are made of tourism products and trade market research as well as supply of tourism products and advertising at home and abroad. Currently, the latter function is thoroughly implemented. 13 Lithuania-based Tourism Information Centres provide tourism information and 3 Tourism Information Centres are located abroad: Baltic Tourism Information Centre in Helsinki and Hussum (Germany) co-financed by all three Baltic States, Vytis Tours in New York supported by State Tourism Department. However, the efficiency of those three Centres is not very high since they are not true representatives of Lithuanian tourism image abroad. Hence, the state should establish and finance tourism information centres in strategic markets of Lithuanian tourism, namely in Germany, Russia, Poland, Sweden and Finland. Advertising-information tourism publications creating the tourism image of the country are prepared and distributed by State Tourism Department. The majority of those publications have been financed from PHARE funds (around ECU 25 thousand per annum). Those publications are distributed in tourism fairs and through Lithuanian Embassies, information centres, Lithuanian Airlines, public institutions. Demand for this type of publications is only partly satisfied, thus, it is necessary to ensure that an edition reaches 30-40 thousand publications; it would also be expedient to publish thematic tourism publications. When foreign aid will have been exhausted, the state shall continue the work of forming country’s image and allocate funds necessary to this end. Advertising information activities should be maintained in regions and municipalities as a supportive means for foreign and local tourists. This activity is an important ‘investment’ into the development of tourism and an effective aid to business.
10.2. Participation in international tourism fairs
Participation in international tourism fairs is an important part of forming general country’s image and introducing Lithuanian tourism product. State Tourism Department installs stands on Lithuania and organises participation of Lithuanian tourism companies in most famous tourism fairs in London, Berlin, Milan, Goteborg, Moscow, St Petersburg and 5-7 regional tourism fairs. Those activities are supported mainly from PHARE funds. In 1998 after the exhaustion of PHARE funds, the state should continue the work already started from state and private funds and allocate appropriate means for the installation of the said advertising stands in fairs.
10.3. Contacts with foreign mass media
Contacts with foreign mass media and tourism agencies shall become a permanent means of marketing of State Tourism Department and popularisation of Lithuania, which so far has been utilised very scarily. Private formations are not yet capable of organising any distinct Lithuanian advertising campaigns, whereas no means are earmarked to public institutions for the purpose of advertising Lithuanian tourism product. No consideration is given in drafting tourism budget to foreign practice popularising tourism, forming image and disseminating information (e.g. Finland’s annual tourism budget is Litas 80 million, in Ireland – Litas 120 million, in Lithuania – Litas 2 million). This is why Lithuania clearly loses on the international tourism market. In order to raise efficiency of Lithuanian tourism marketing a Cupertino of public, municipal and commercial establishments is necessary, the allocation of funds and reasonable utilisation of the same, and selection of best measures and consideration of target researches of foreign markets.
10.4. Tourism information system
Tourism Service and Resources Register elaborated following the prescriptions of the Tourism Law will serve as an incentive towards a more efficient work with and dissemination of tourism information. This database will make it possible an efficient supply of qualitative information on tourism services and facilities offered in Lithuania both for local and foreign users and will help to assess more accurately the tourism product. In addition, a solution will be sought regarding the exchange of information among municipalities, business representatives and users.
10.5. Measures and action priorities
10.5.1. To carry out researches of foreign tourism markets and establish lists of priority measures;
10.5.2. To assist in establishing tourism information centres abroad;
10.5.3. To provide users and institutions with sufficient advertising information material;
10.5.4. To organise educational trips to Lithuania for representatives of foreign mass media and tourism agencies;
10.5.5. To organise qualitative participation in international tourism fairs;
10.5.6. To draft plans of marketing measures and ensure their financing;
10.5.7. To keep a register of tourism services;
10.5.8. To exert influence over liberalisation of custom formalities for foreign tourists.
10.5.9. To prepare and implement tourism information road signage system;
10.5.10 To harmonise the national tourism statistics preparation with EU Directives and with the recommendations with Wealth Tourism Organization
11. PROMOTION OF TOURISM BUSINESS; INVESTMENT SOURCES
11.1. Investments into the service sector
A majority of investments into tourism sector come from the private sector. State participation is necessary in raising indirect investments into tourism sector, in developing country’s infrastructure and drafting tourism plans, in forming country’s tourism information system, in implementing marketing and training activities. Material investments into hotel and restaurant sector in 1996 stood at Litas 23 million and made only 0.5% of the total material investments into Lithuanian economy. In October 1997 loans extended to hotel and restaurant sector accounted for only 1,1% of the total amount of loans granted to business sector. In total, the said sector has been extended Litas 30.7 million long-term and Litas 10 million short-term loans. At the beginning of 1997, there were 31 entities in the hotel and restaurant sector operating foreign capital; total amount of foreign investments of the said entities amounted to LTL 33.4 million.
11.2. Formation of investment environment
Principal role of public institutions is to form legal framework favourable to tourism development and activities of tourism economic entities. A weighty factor is travel services rendered to foreign tourists by Lithuania-based companies and defined in the Tourism Law as export services. Success of tourism business and volumes of investments largely depend on measures applied by the state in respect of visas, i.e. whether or not the conditions related to supply of tourism services to foreign tourists are favourable. Another decisive factor would be the elimination of limitations and bureaucratic barriers applied in respect of this activity as well as on the success of tourism development issues solved by municipalities and regions.
11.3. Measures and action priorities
11.3.1. Regions and municipalities shall carry out and receive support to the following activities: research and elaboration of regional tourism development programmes (projects); maintenance of regional and municipal tourism information centres and issuance of tourism publications; securing investment conditions favourable to tourism services through elimination and reduction of secondary factors (limitations and formalities in respect of establishment, reasonability and jurisdiction of miscellaneous permits and adjustments, effectiveness of bureaucratic apparatus); active solution, purposefulness and reduction of bureaucratic work.
11.4. Structural and territorial priorities of investments into tourism sector
11.4.1. Renovation of existing hotels and construction of new hotels, formation of camping network, adjustment of manors and other objects of heritage to infrastructure of tourism services;
11.4.2. Establishment of Vilnius, Kaunas, Klaipeda tourism information centres by means of expanding the scope of accommodation services, creating infrastructure necessary for hosting international events, recreation and leisure activities, by developing suburban tourism potential;
11.4.3. Development of seaside region through medium and high quality accommodation infrastructure and recreation/ leisure base invulnerable to any season of the year and increasing attraction;
11.4.4. Development of Aukstaitija recreation park within the territorial framework of the National park and 5 regional parks by means of renovating the existing recreation dwellings, creating camping network, developing rural tourism services, expanding the scope of entertainment services;
11.4.5. Development of south-eastern region through the structural formation of recreation dwellings, campings and rural tourism; developing rehabilitation, hunting and eco-tourism;
11.4.6. Development of active leisure zone in the Middle Nemunas region through small water, hunt, leisure complexes and rural tourism services;
11.4.7. Expansion of Via Baltica car tourism zone with a highly-developed roadside car tourism services;
11.4.8. Develop and provide support to the development of tourism services in low fertility rural areas rich of recreation resources as a supportive means to business and rural employment. To facilitate and simplify the procedure of change in status of the target land, also solve the issue of not raising taxes on land.
11.4.9. Investments directly related to the development of tourism infrastructure shall become a prerogative of tourism economic entities. Such entities have to be supported through small- and medium-sized business programme, rural, forestry and export support funds. State participation in financing tourism marketing measures shall also be deemed as support, certain tax relieves shall be established. Fort the implementation of urgent tourism (entertainment) projects Lithuania can resort to EU funds.
11.4.10. It is necessary to ensure attraction of foreign capital into construction of recreation dwellings (hotels in particular). Foreign investors shall be approached with concrete proposals (exhaustive plans or investment prospects), explicitly defined legal requirements by focusing attention on investments rather than on land or object price. Construction of new international hotel chains will help to solve the problem of service quality and secure the growth of foreign tourism, use of local labour force and material resources; on the other side, owing to marketing activities of such entities the Lithuanian tourism image will be popularised.
