Банкеръ Weekly



The ongoing repairs of hotels and infrastructure networks in the Sunny Beach seaside resort brought tension between foreign tour-operators and the State. So far intermediaries have paid up hundreds of thousands of euro in damages to holiday-makers who have complained from construction works' noises. Valentin Josifov, representative of the German tour-operator TUI in Bulgaria, even threatened that no advance payments would be provided to hotels which had not opened by the beginning of May. Other intermediaries also insisted on longer vacation season. Indeed, this is a real chance to boost profits, yet Bulgaria cannot be compared with Spain and our climate will hardly allow the six months' vacation period desired by both hotel owners and tour-operators. Nevertheless, the lack of sunshine can be compensated by country tours and TUI has already worked out 11 routes, including Rousse, Triavna, Sofia, Bansko, Plovdiv and other towns. It is said that keeping the hotels busy in May and October is the only chance to improve financial results the next year when the situation at Bulgarian resorts is expected to get worse. After September 11 the number of West-European vacationers has dropped and all Mediterranean countries have reported lower figures. This, according to experts, will force them to cut down on prices next season. Such measures have already been taken in Spain, Tunisia and Egypt which have much better tourist image than Bulgaria. The tour-operators also find it strange that our season officially opens on June 8, while in fact foreigners usually start arriving in the beginning of May.Kaloian Ninov, Deputy Minister of Economy, stood behind Malina Bakalova, Executive Director of Sunny Beach JSCo, with the argument that if repair works had not been started in the spring, there had been real danger the season in August to be seriously affected which would have cost much more considerable losses. So far BGN20MN has been invested in repairs of the sewerage system, of the electric mains and of the roads and BGN3MN more are planned to be invested in 2003. This was announced to the BANKER weekly by Minister Ninov. The money will be repaid to the State after the resort's infrastructure is sold - most probably to the owners of Sunny Beach hotels. The liquidation of the joint stock company was approved a couple of weeks ago and has already been launched after an invitation for a general meeting on July 16 was published in the Official Gazette. The company's BoD will offer apart from 80% of the 2001 profit, also part of the additional reserves (amounting to BGN57.808MN) to be distributed as dividends.The tenders for the sale of about ten sites in the resort seemed very strange, as well. Insiders claim that they have been absolutely fake. The present land's tenants put up the bidding to USD600 per square metre. Yet this money will hardly enter the budget in any form. The buyers will certainly take out their own investments made for a year and several months (the sites were leased by the old management of Sunny Beach in March, 2001). This money is said to amount to USD550 per square metre. There are rumours that this is the price set for a simple concrete slab of 8 sm, cast on the ground. So it turns out that these buyers (some of whom are said to be rather close to Georgi Iliev, Head of VAI Holding), have paid no more than USD50 per square metre. Yet the others have been forced to take out the whole sum of USD600 per sq. m. which has obviously placed them in much more unfavourable situation.

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