Round Table Mare Balticum Tourism-Cooperation in the Baltic Sea Region: Experiences and Perspectives

Round Table Mare Balticum Tourism-Cooperation in the Baltic Sea Region: Experiences and Perspectives in the context of the German CBSS-Presidency 2011/2012 Results of Tourism Round Table Compiled by Gerd Hesselmann Chairman HESSELMANN & ASSOCIATES Goethestr. 2-3 / Aufgang B D-10623 Berlin Tel.: +49 (0)30 31164555 Fax: +49 (0)30 31164557 Mobil: +49 (0)172 3227457 e-mail: g_hesselmann@hesselmann-associates.com www.hesselmann-associates.com 3+1 Tourism Round Table Page 1 of 18

List of Participants Tobias Woitendorf - Deputy Managing Director of the Tourism Association Mecklenburg West Pomerania/German Tourism Association Wolf Born - State Chancellery Mecklenburg-West Pomerania/Task Force EU-Strategy in the BSR, Priority Area Coordinator Tourism Prof. Dr. Wilhelm Steingrube - Chair of Economic and Social History, Ernst-Moritz University of Greifswald Dr. Werner-Dieter Klucke - Federal Foreign Office, for Klaus von Lepel - Federal Foreign Office, Task Force German Presidency of the Council of the Baltic Sea States 2011/2012 Armands Slokenbergs - Director of the Latvian Tourism Development Agency Asnate Ziemele - President of the Latvian Country Tourism Association Lauku Celotjas Kylli Karing - Vice-President of Estonian travel & tourism association (etfl), Managing Director at Via Hansa Tours LTD Evely Baum - Tourist Board, Enterprise Estonia Dr. Raimonda Balniene - Director of the State Tourism Department,Lithuania Gerd Hesselmann - Chairman of Round Tourism Table HESSELMANN & ASSOCIATES; TOURISM CONSULTING & SERVICES 3+1 Tourism Round Table Page 2 of 18

Table of Content Preface... 5 1. Approach of the Tourism Round Table... 6 1.1 Baltic Sea Region, identifying participating Countries... 7 1.2 Types of Tourism... 8 1.3 Identifying Destinations and Source Markets... 9 1.4 Role of Market Intelligence... 9 1.5 Marketing Mix Components... 10 1.6 Product Policy... 12 1.6.1 Cultural Heritage... 12 1.6.2 Nature, Countryside Tourism... 13 1.6.3 --Sustainability as a normative Concept... 14 1.7 Communication Policy... 15 1.7.1 Baltic Sea Region Tourism Web Portal... 16 1.7.2 Baltic Sea Tourism Forum 2012... 16 2. Results of Round Table... 17 2.1 Framework Conditions... 17 2.2 Product Policies... 17 2.3 Communication Policy... 17 2.4 Institutional Environment needed... 18 3. Recommended Steps... 18 Final Remark... 18 3+1 Tourism Round Table Page 3 of 18

Charts 1 Economic Impact of Tourism 2 Success Factors of a sustainable Tourism Development 3 Baltic Sea Region 4 Reasons to Travel 5 Marketing Mix Components 6 Allocation of Topics on the Agenda Abbreviations BSR CBSS EUSBR M-V ECC CTI Baltic Sea Region Council of the Baltic Sea States EU Baltic Sea Region Mecklenburg-West Pomerania European Culture Capital Culture Tourism Institute Attachments A 1 A 2 A 3 A 4 A 5 A 6 The EU Baltic Sea Strategy: A Framework of Cooperation W. Born Introduction Round Table, G. Hesselmann Cultural and Heritage Tourism, A. Slokenberg Tourism on the Countryside, Mrs. Balniene Sustainable Tourism, Prof. Steingrube ETFL Common Marketing Activities, Mrs. Karing 3+1 Tourism Round Table Page 4 of 18

Preface The German Federal Foreign Office, Task Force German Presidency of the Council of the Baltic Sea States 2011/2012 has defined the following key-questions of the Round-Table- Discussion: Do we need closer cooperation in the field of tourism in the Baltic Sea Area? If yes, in which areas and how can it be managed? The input at the Round Table is expected to be a great stimulus for the work of the Task Force as CBSS-presidency as well as for the further development of the EU- Baltic Sea Strategy in the field of tourism. Around the overarching question how and in which areas tourism cooperation in the Baltic Sea region can be strengthened, the following six topics were defined. (1) Using Cultural and Natural Heritage for Tourism Introductory statement by Mr. Slokenberg / Latvia (2) Tourism on the Countryside Introductory statement by Ms. Balniene / Lithuania (A 3) (3) Sustainable Tourism Introductory statement by Prof. Steingrube / Germany (A 4) (4) Efforts for common tourism-marketing concepts in the Baltic Sea Region Introductory statement by Mrs. Karing, Estonia (A 5) (5) Maritime Tourism and Linking Tourism Stakeholders in the Baltic Sea Region in context of the Baltic Sea Tourism Forum 2012 Introductory statement by Mr. Woitendorf, Germany (6) European Capital of Culture Riga 2014 Introductory statement by Mr. Slokenberg /Latvia As an introduction to the priority area tourism Wolf Born, State Chancellery Mecklenburg- West Pomerania/ EUSBSR, Priority Area Coordinator Tourism covered first The EU Baltic Sea Strategy: A Framework of Cooperation in his presentation (see A 1). The Chairman of the Tourism Round Table, Gerd Hesselmann, showed in his introduction the theoretical framework for the upcoming Introductory statements and the following discussions (see A 2). The outcome of the Tourism Round Table should be some identified areas of cooperation and proposals of how these areas should be tackled in order to strengthen tourism in the Baltic Sea Region. 3+1 Tourism Round Table Page 5 of 18

1. Approach of the Tourism Round Table All participants agreed that tourism is an important business sector which can supply major contributions to national economies (See Chart 1). Furthermore one has to be aware that a flourishing tourism sector requires a peaceful environment and that it is the atmosphere and the tourism experiences in a destination which make visitors feel well. It is worth to invest in the Chart 1: Economic Impact of Tourism further development of the tourism sector because it pays if the rules applied on the sector are watched. Some of these rules were subject of the tourism round table. They can be derived from chart 2 which shows some success factors of a sustainable interregional tourism development. Basically, public as well as private sector tourism institutions are needed which are jointly able to develop and to apply effective marketing tools. This counts on the national, regional and local levels as well as on the interregional level, such as the Baltic Sea Region. This means institutions have jointly to be assigned which take responsibility to coordinate and guide activities in order to be able to take advantage of the potentials offered through an interregional cooperation 3+1 Tourism Round Table Page 6 of 18

Chart 2: Success Factors of a sustainable Tourism Development. Based on their knowledge and professional experience, the participants had to take some decisions in order to be able to identify areas of cooperation and to discuss possibilities of handling them. The presentations and the discussions during the Round Table Session focused on the following subjects. 1.1 Baltic Sea Region, identifying participating Countries The ultimate goal would be to achieve a close cooperation of all Baltic Sea Countries on the field of Tourism, which could lead through an integrated approach on the tourism sector to a Baltic Sea Brand which would be because of its Unique tourism offer (product policy) and its communication / promotion strength a strong competitor to other world regions. The huge emerging markets, the dynamic development on the competitive tourism sector, driven by internet based applications to address and service source markets, changing consumer trends, the economic and political environment etc. create challenges which a single country can hardly meet. To tackle the emerging overseas markets is not feasible for a single Baltic State. To establish a competitive position on these markets requires an interregional approach The Baltic Sea Region includes matured tourism destinations, such as the Scandinavian Countries and still less developed and known destinations, such as the Baltic countries. According to the experiences of the participants, there seems to be no chance at least for the time being to get the Scandinavian Countries involved in joint Baltic Sea Region product developments and promotion activities. 3+1 Tourism Round Table Page 7 of 18

Chart: 3: Baltic Sea Region The participants at the Tourism Round Table therefore recommended focusing in a first phase on the 3+1 countries represented at the table. This group should however be open for other Baltic Sea Countries The participating countries as well as new members should meet the following criteria. (1) Commitment to the jointly defined activities not only on a short term but for a longer term period. (2) Participation at meetings and other joint activities. (3) Contribution of human resources (expertise/knowledge), financial resources for joint activities, establishing a common platforms and to ensure continuity in supporting the interregional tourism development process. 1.2 Types of Tourism There are many reasons for travelling which are summarized in Chart 3. Each segment has its own rules and procedures. The round table participants have decided to focus on leisure travel which has many sub segments some of which were subject of the discussion (see 1.6 Product Policy). Chart 3 shows as well types of tourism / travelling depending on source markets. We have to differentiate between 3+1 Tourism Round Table Page 8 of 18

Domestic tourism: residence travelling within their own country Incoming / inbound tourism: foreigners come to visit the countries Outgoing / outbound tourism: residents of the country travel abroad The round table has put the focus on inbound tourism to the Baltic Sea Region which is expected to get stronger through interregional cooperation and to benefit all participating countries. This has also an immediate impact on domestic travel. Chart 4: Reasons to travel 1.3 Identifying Destinations and Source Markets All participating countries understand themself as destinations. They all have a high share of domestic travelers which means they are at the same time their major source market. While maintaining the number of domestic travelers they all undertake efforts to achieve tourism growth through increasing numbers of foreign visitors (inbound travel). Beside the European countries above all Germany as source markets the Baltic countries think on focusing on emerging markets such as Brazil, India and China as overseas source markets and Russia, the so called BRIC States. 1.4 Role of Market Intelligence Chart 5 shows that marketing means to put potential travelers on source markets in the focus of the development and application of marketing tools. Consumer trends and expectations are one focus. The other is the status of the tourism potential in the region as well as the status of the single marketing tools. The knowledge about both enables the evaluation of how trends and expectations on one side and the available tourism offer and other marketing tools match together and hoe marketing tools have to be further developed. 3+1 Tourism Round Table Page 9 of 18

Another subject of marketing intelligence are consumer trends regarding the procurement of tourism information and of the booking of travel arrangements. The question is how can destinations take advantage of the dynamically internet application? The discussion of the Round Table on this field is summarized under 1.7 Communication Policy. Prof. Steingrube gave an example of how within the AGORA 2.0 project tourism highlights of the Baltic Sea Region can be identified and evaluated. The result will be the 6 Baltic Sea Region Wonder, the top 6 highlights which could be pearls of the necklace, we are going to talk about under 1.6, Product Policy Through the applied bottom up approach the project created a tourism highlight awareness on all levels of a destination by supplying talking points for internal communication through all media. Furthermore, the outcome of this research and evaluation process will be an attractive content for external communication in direction source markets. 1.5 Marketing Mix Components All four marketing mix components depend on each other. A Tourism strategy for a single country or for the whole region has to cover all four components. The public as well as the private sector have to cooperate in developing the single strategies leading to a comprehensive marketing strategy. Chart 5: Marketing Mix Components 3+1 Tourism Round Table Page 10 of 18

During the Round Table, Price and Distribution Policies were not on the agenda though we are working on a very price sensitive market and though without distribution (possibilities to book the tourism offer) there are no urgently needed revenues. The participants have focused on product and communication policies. The allocation of the topics on the agenda to these two components can be seen in Chart 6. Riga, the EU Culture Capital 2014 (ECC) is an excellent product development opportunity for the whole region and at the same time an attractive talking point for internal and external communication to create awareness of the Baltic Sea Region in source markets as well as in the region. It is therefore listed under both marketing mix components. Sustainability (Prof. Steingrube / Germany) Product Policy Price Policy Cultural & Natural Heritage (Mr. Slokenberg, Latvia) Countryside/Rural Tourism (Mrs. Balniene, Lithuania) Maritime Tourism / Baltic Sea Tourism Forum (Mr. Woitendorf, Germany) Riga European Capitol of Culture (Mr Slokenberg, Latvia) Communication Policy Distribution Policy Common Tourism Marketing Concepts in the Baltic (Mrs. Karing, Estonia) Baltic Sea Tourism Forum ((Mr. Woitendorf, Germany) Riga European Capital of Culture (Mr. Slokenberg, Latvia) Chart 6: Allocation of Topics on the Agenda 3+1 Tourism Round Table Page 11 of 18

1.6 Product Policy The presentations and discussions during the Round Table lead to the following market segmentation: - Cultural, heritage, historical tourism covering also among other remains of the communist period. - Nature and tourism on the countryside - tourism - Active tourism, such as biking trails along the Baltic Sea Coast - Event tourism, such as Riga the ECC 2014 - Creating further events based on traditions, using unique cultural and historical sites. The evaluation of existing concepts, such as the Baltic Sea Region a necklace of pearls (from Simon Anholt) and The cooperation with existing networks and initiatives will supply ideas for a careful further development of sensitive tourism treasures in the BSR. 1.6.1 Cultural Heritage Participants were of the opinion that if we jointly succeed to design cultural maps of each pearl, we will make a big step in the task of creating an identity of the Baltic Sea Region. There will be many unique facets and many shared aspects (for further details see A 3 from A. Slokenberg). This presentation refers to the Culture Tourism Institute (CTI), a none-governmental organization which has been engaged in the implementation of the European Union s strategy for the Baltic Sea Region adapted in 2009. This strategy emphasizes tourism and culture as a prioritized area. It is for sure a valuable source for relevant content, when further cultural product development activities are undertaken. The European Cultural Capitals, such as Stavanger Vilnius Tallinn Turku Riga Umea are many fold a great asset for the further development of the cultural heritage assets of the BSR. Any further initiative/cooperation to further develop cultural/heritage tourism in the BSR can go back to the enormous conceptual work. Such concepts are special because They simultaneously concentrate on the unique identity of a place as well as its European context Their success is dependent on the ability of their marketing strategy to target cultural tourists to visit in a concentrated time and space One idea to use the momentum of the ECC wave in the BSR is the opportunity to build a network of such cities and also bridge them as part of each year s activity as ex. ECC and coming ECC to make investments more sustainable (see A3). 3+1 Tourism Round Table Page 12 of 18

Finally RT participants agreed that to meet consumer trends it is necessary to identify themes of a tourism offer covering all four countries. One example is the Hanseatic Route in the Baltic Sea Area. 1.6.2 Nature, Countryside Tourism If culture in most instances concentrated in urban environment, then nature is much more widely placed. Each Baltic Sea Region country has different nature tourism products, but there is the united element of sea and water. Can a true and useful common nature concept be easily formulated? e.g. northern green, unspoiled, sustainable? Questions raised by A. Slokenberg in A 3. Dr. R. Balniene got the full attention of the Round Table for her presentation of tourism on the countryside. This type of tourism is unique, authentic, close and in nature and last but not least the diversity of activities, such as kayaking, boating, horse riding, biking and hiking generates a big asset of the BSR tourism offer. Looking at the following arguments we have to state that tourism on the countryside meets some consumer trends referring to the tourism sector. Changes of consumer behaviour: core services, price sensitive Individual packaging with high quality guarantee versus All-Inclusive Virtual Trust Social Media substitute mouth-to-ear Internet shifts the power from travel trade to the client Mobile Internet + GPS Experience Economy: tell a story 3+1 Tourism Round Table Page 13 of 18

But we also have to realize that tourism on the countryside attracts mainly the domestic market (> 85-90%) but it has a high growth potential for international demand. The question is, how can the assets of tourism on the countryside in the BSR be developed, promoted and made bookable. How is the competitive position on this field of the BSR compared to other also attractive regions for this type of tourism? Which role does the distance between source markets and destinations play for the decision to book tourism on the countryside? 1.6.3 --Sustainability as a normative Concept After the presentation of Prof. Steingrube and the discussion around the term sustainability, there was no doubt that sustainable tourism has nothing to do with eco-tourism and that there is no fitting type of tourism at all (see A5). We all understood that sustainability has to be understood as a normative concept which enables us to evaluate the different impacts of tourism which have to be kept in balance. These are the economic, the social as well as the ecological aspects of tourism. The message was to make tourism more sustainable independent from the type of tourism and the marketing tools applied.. In our discussions and presentations, sustainable was partially also used in the sense to achieve a longer term (banced) impact on the economic, social and ecology environment. Beside the recommended term sustainability in tourism there is no reason to avoid sustainable tourism if it describes a long term tourism offer which keeps the economic, social and ecological aspects in balance. 3+1 Tourism Round Table Page 14 of 18

1.7 Communication Policy Three introductory statements and the following discussions had the marketing component communication policy in their focus. In her introductory statement K. Karing described tourism cooperation projects, among other with BSR tourism identity profile, common tourism marketing concepts within the BSR, e.g. European Cultural Capital 2011: Tallinn and Turku, common tourism marketing concepts for jointly targeting overseas markets (see A 6). She paved the ground for the following discussion. Communication needs stories and news to get spread and the attention of readers, viewers, and listeners. The product policy discussion revealed great sources for stories and news, such as the hanseatic heritage, the European Cultural Capitals Turku & Tallinn in 2011, Riga in 2014 and others before in the Baltic Sea Region or the pearls of the discussed necklace. We have also seen that it needs internal communication to the participating countries and within in order to get the commitment, participation and contributions of the local population and institutions as well as of the representatives further bottom up. They are all part of the tourism offer and at the same time beneficiaries of tourism. The benefits however become only true if external communication (PR/promotion) is effective and reaches defined source markets and respective target groups. We agreed that both aspects of communication of the marketing tool component communication have to be taken in consideration. The question then was what are suitable communication tools to apply for internal and external communication. Beside the many possibilities we focused in our discussion on internet based communication such as a Baltic Sea Web Portal raised by K. Karing (A6) and on or the Baltic Sea Forum, raised by Mr. Woitendorf. In connection with the common web platform, the discussion about a brand for the Baltic Sea Region came up. Should a brand focus on the diversity of the tourism offer of the whole region or focus on one or two unique highlights. As all participating countries ran through yearlong discussions to get to the current logos and claims, one could get an idea of how long it will take to get to a Baltic Sea Region Brand, above all when important tourism destinations which are not participating - at least at the beginning change their mind. Nonetheless, the participants had the feeling that the brand issue will be on the agenda as soon as a solution for the further cooperation will be established. 3+1 Tourism Round Table Page 15 of 18

1.7.1 Baltic Sea Region Tourism Web Portal All agreed that a common web platform would be an ideal tool for internal as well as external communication, for business to business as well as business to consumer communication. However, there is beside the brand issue the question who runs such a common web platform, who coordinates the activities etc. Questions which can easily be solved as long as there is continuity in the national policies. This reveals already one prerequisite for the establishment of a long term (sustainable) cooperation. This requires long term binding contracts which ensure the commitment, the necessary competence and capacities for participations and contributions to the cooperation process. As a model, the chairman of the Round Table proposed to have a look at the web portal www.balkan-schaetze.com which was a result of an open regional fund project managed by giz on the Balkan. 1.7.2 Baltic Sea Tourism Forum 2012 The basic question is, does the Baltic Sea Region Tourism Cooperation need a tourism forum where to meet annually or bi- annually to all aspects of the tourism cooperation and joint marketing strategies live with colleagues from all countries?. As the experience up to now is not yet as encouraging as hoped this could be an interpretation of Mr. Woitendorf introductory statement there seems to be no doubt, that nonetheless of all internets based communication possibilities, persons in responsibility and in charge of such an important project need the exposure in the public and the direct feedback from their partners from all over the region. It became obvious that the, without any doubt, important Baltic Sea Tourism Forum requires some further developments and some creativity to become that attractive, that high ranking representatives of the participating countries show up, praise the tourism sector as one of the leading business sectors in the region, which ensures sustainability and benefits the whole society in the Baltic Sea Area, etc.. One critical aspect is the timing. The question is who should participate from the tourism sector in the destinations as well as from selected source markets and how does their time schedule look like in the last months of the year. 3+1 Tourism Round Table Page 16 of 18

2. Results of Round Table 2.1 Framework Conditions (1) 3+1 countries cooperation platform, open for other Baltic Sea Region Countries (see 1.1/page) (2) Focus on leisure tourism with its segments meeting best the BSR tourism potential (see 1.2/chart 4) (3) Focus on inbound tourism (see 1.2/chart 4) (4) Focus on emerging markets (5) Evaluation tourism potential in identified segments, such as culture/nature/ countryside/maritime and in connection with the Riga ECC in 2012. Taking existing research, studies, knowledge, expertise, networks and initiatives into account (see 1.4) (6) Focus for the time being on product policy and communication policy (see 1.5/chart 5 and 6) 2.2 Product Policies (1) Assessment, evaluation and further development of cultural heritage and historic sites. (2) Assessment, evaluation and further development of nature and countryside tourism highlights. (3) Assessment, evaluation and further development of maritime tourism in the BSR (4) Definition and development of tourism packages around the Riga ECC 2014 based on the given tourism assets of the participating countries and common themes such as the Hanseatic route. (5) Further develop and apply existing concepts such as The Baltic Sea Region : a necklace of pearls from (Simon Anholt) and other (see 1.4). 2.3 Communication Policy (1) Creation of awareness that internal as well as external communication tools impact each other. (2) Creation of awareness for a needed still closer cooperation on BSR level through internal communication. (2) Stories and news have to be supplied for communication (3) Sooner or later the BSR cooperation will need a common brand (see 1.7) (4) As short-term communication tools for internal and external communication, for the public and private tourism institutions, for addressing business partners as well as consumers will be a common web platform for the participating countries.. (5) The Baltic Sea Tourism forum should be positioned as the leading tourism event of the region for fact-finding workshops, networking, and business contacts. 3+1 Tourism Round Table Page 17 of 18

(6) Europe Culture Capital, Riga in 2014 is understood as an opportunity to direct the attention of the European as well as overseas markets on the Baltic Sea Region as a tourism destination. 2.4 Institutional Environment needed (1) To systematically further develop the existing cooperation between the participating countries at the RT requires respective institutions on the interregional level as well as the support of the single countries. (2) The interregional institutions have to be able to develop in cooperation with single countries marketing strategies and to implement them. (3) To ensure continuity of the work of the platform institutions clear contracts and terms have to be defined and put in place. 3. Recommended Steps T ensure continuity and to enlarge and strengthen the basis by supporting existing ongoing cooperation within the BSR as well as, the respective institutions and initiatives. Carrying out an assessment of the current status of cooperation and the competence and capacity of involved institutions. Starting to develop and design the cooperation roof in joint efforts. After approval including budget requirements start building the roof and fill it with life to the benefit of the whole group Final Remark It was a challenge and a pleasure for me to take over on shortest notice the chairmanship of the Tourism Roundtable in the frame of the 3+1 Event in Binz on August 24, 2011. As time compensation I took a little longer to compile this report after I got shortly before and during the Round Table into the highly interesting overall theme and the topics on the agenda. For persons who have to follow up the event and who are not that familiar with the tourism sector I have put the content of the Tourism Round Table in a broader theoretical tourism sector frame. I hope that helps to see this Tourism Round Table as a fruitful step to a still closer cooperation of the BSR countries. I want to thank all participants at the Tourism Round Table for their contributions and the open discussion. It was a pleasure for to be part of the tourism RT team. Gerd Hesselmann, Berlin, August 30, 2011 3+1 Tourism Round Table Page 18 of 18