A recent study by consultancy firm PricewaterhouseCoopers (PwC) indicates a 16 percent fall in Romania's tourist industry in the last four years. The country's hospitality and leisure industry revenue fell to EUR 1.5 billion in 2011, with fewer foreign tourists accounting for the majority of the decline. Foreign tourists spent EUR 750 million holidaying in Romania in 2008, while last year the figure had dropped to EUR 600 million, or a 20 percent fall in revenues.

PwC's study indicates that a similar pattern can be seen elsewhere, but highlights Romania, Poland and Slovakia as the worst affected in the region by the post crisis slow down in tourism. The number of Romanians holidaying abroad also fell sharply, while the figures for locals spending on local tourism were steadier. “Recession has reduced the disposable income and consumers were forced to reduce their spending on leisure and vacations. By far, the worst affected by these changes in consumer behavior were vacations abroad, Romanian tourists reducing their spending by over 30 percent, from EUR 460 million in 2008 to EUR 310 million in 2011,” said Andrei Creţu, Manager, Advisory, PwC Romania.

Despite the macroeconomic factors the tourism sector is still desperately under-performing, Romanian tourism's school report would probably read – 'F', already underachieving and getting worse. The report shows that tourism accounts for only 1.4 percent of GDP in Romania, which contrasts starkly with Bulgaria – 3.6 percent of GDP and Hungary – 4 percent of GDP.

“Although Romania’s touristic sector has real potential for growth, inadequate transport and hospitality infrastructure hinder its development. Also, the sector lacks a sizable pool of skilled human resources in the field (chefs, waiters, maids etc.), mostly due to the fact that many Romanians with such qualifications choose to work abroad, while the professional high schools do not provide the resources needed, in sufficient quantity, nor proper training level”, said Andrei Creţu. Occupancy rates in Romania's hotels are among the lowest in Europe, just 26 percent. Hotels in the capital Bucharest have a much higher occupancy rate ( 62 percent ) but even this figure has fallen with increased competition and lower demand.

So what does PwC recommend? According to Andrei Creţu, Romanian tourism needs to “clean up its act,” whatever that means. Creţu also echoes other commentators by recommending trading on tourism underdevelopment as a plus and encouraging eco/adventure tourism.

Liam Lever, liam@romania-insider.com