City Marketing and Its Impact Over Urban Economies ATE 2011 Lisabona

8/2/2019 City Marketing and Its Impact Over Urban Economies ATE 2011 Lisabona

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City Marketing and its Impact over Urban Economies

Elena Lidia Alexa1

Marius Alexa2

1. IntroductionIn the past years tourism has become the worlds fastest-growing economic sector, both in

terms of turnover and employment opportunities and so, many medium and small sized cities started

on opting for touristic activities in order to revive the local economy. In these circumstances,

municipalities are no longer just passive administrative entities; they are forced to become proactive

players in order to reinvent and to become more competitive. Due to globalization, the competition for

investors, tourists, highly skilled human resources and inhabitants is no longer just with other cities

located a few kilometers away, but with cities placed on the other part of the globe, offering similar

services and attractions.

In this new context, tourism begun to be an appealing activity with an important potential and,

at the same time, a challenge for urban centers development, as they find themselves forced to

redefine their identity, due to the industry decline, outmigration of jobs, pollution, and under the

impact of the global economic crisis.

The main indicators of the touristic activity in the urban area emphasize that cities have an

important percentage in the overall touristic circulation. However, the future progress of this form of

tourism is conditioned by the assimilation in the urban management process of marketing strategies

meant to allow the development of touristic functions in the main urban localities and of touristic

programmes designed to bring added value to the cultural attractions for large and small cities alike.

Urban marketing comes, in this case, as a natural response to the requirements of the city to

better answer the markets needs and to adjust to the dynamics of the tourist market. One of the most

important question raising in this case concerns marketing accountability, due to the difficulty of

1PhD Student, Alexandru Ioan Cuza University Iai, e-mail: [email protected]

2PhD Student, Alexandru Ioan Cuza University Iai, e-mail:[email protected]
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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measuring the economic impact of tourism, for it implies a sum of direct, indirect and induced effects

over a region, or, in our case, a city.

The present article aims to analyze the different urban marketing strategies used by urban

centers interested in attracting important tourist flows and their economic impact over the city in the

context of the European Capital of Culture Programme. Using a case study, the analysis aims to

estimate the economic impact of the Programme on Sibiu, a Romanian city selected as European

Capital of Culture in 2007 and the citys ability to further capitalize the competitive advantage gained

through that programme.

2. Urban Tourism. General considerationsAccording to the World Tourism Organization (UNWTO), tourism is firmly established as the

number one industry in many countries and the fastest-growing economic sector in terms of foreign

exchange earnings and job creation.

Specialized literature does not provide a widely accepted definition for urban tourism.

However, there are common elements among different authors regarding the concept of tourist,

excursionist and the delimitation of the urban area. Thus, it is widely accepted that urban tourism

refers both to the movement of tourists in cities or urban agglomerations of at least 20.000 people

outside their main residence, under the condition of remaining at least one night at the destination and

to the tourist travel for at least 24 hours in the urban area, provided that the minimum travel distance

is at least 100 km3. World Tourism Organization considers that urban tourism refers to travels inside

cities or areas with a high population density4.

If until recently urban tourism was seen as a result of population mobility, for which the city

was only a brief stopover on the way to the final destination, at present, due to significant tourism

consumer behavioral changes and to extensive changes in the urban management, the city turned into

a cultural center, a relaxing place where people shop, meet with friends and spend their free time

3 G. Cazes, Fr. Potier (1996),Le tourisme urbain, PUF, Paris, p. 10.4 UNWTO, Tourism 2020 Vision, Volume 7, Global Forecasts and Profiles of Market Segments, p. 103.


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pleasantly. Therefore, one can say that urban tourism is not just a form of tourism, but an integral part,

a traditional and distinctive feature of the urban life5.

Urban tourism includes activitiessuch as:

Leisure tourism linked to the particular features of urban areas;

Business tourism linked to the economic and social vitality of towns and cities;

Cultural tourism linked to the cultural heritage and events located in urban areas;

Conference tourism linked to the facilities available in and the image of towns and cities.

A number of new trends are to be found, although to differing degrees, in most European

cities. These trends show why cities need to combine high-quality tourist experience with sustainable

development of the city and integrated urban marketing strategy in order to become more competitive

and to attract more tourists.

Main market trends, on the demand side6:

Urban tourism accounts for 35 % of the international travel of Europeans with an annual

average growth of 4 % over the last 10 years;

According to the ETM (European Travel Monitor), urban tourism has a market share of

18% and is a growing travel preference among consumers; this is a Europe-wide trend

which seems to be more noticeable than for other forms of tourism;

Lengths of stay are short, although there has been a slight increase in recent years;

Europeans are taking several holidays a year and are choosing urban tourism because they

are increasingly familiar with and at home in cities;

Europe increasingly seems to be a network of cities;

Europeans are increasingly dividing up their holidays, offering further opportunities for

brief stays that mix cultural interests, shopping, events and, more simply, travel abroad;

The latter two developments coupled with socio-demographic changes (increased life

expectancy, shorter working week, continued rise in disposable income) are providing a

5 Frank, Howie (2003),Managing tourist destinations, Thomson Learning EMEA, p. 93.6Towards quality urban tourism Integrated quality management (IQM) of urban tourist destinations, EuropeanCommission, Brussels, 2000.


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much broader mix of visitor profiles (different generations, multilingualism, differing

socioeconomic levels, etc.);

Tourists are increasingly looking for flexibility and diversity and for a wide range of

opportunities enabling them to put together a stay of a few days combining sporting and

cultural activities, events, shopping, social activities and in some cases themed activities;

Urban cultural tourism is a mass phenomenon resulting from the growing demand for

cultural activities that are often concentrated in cities (exhibitions, museums, historic

heritage and monuments, etc.);

The proportion of package tours is increasing, making it indispensable to involve travel

operators and agents in initiatives to develop tourism.

Main market trends, on the supply side:

The strategic choice of many towns, cities and regions looking to improve their

economies has been to develop tourist products based on their historic or contemporary

heritage: history, the monumental or industrial heritage, gastronomy, art, culture and

popular traditions, events and attractions are all resources that can be customized to

provide a wide range of tourist attractions;

The wide availability of air transport and the improved quality of railways (high speed

trains), coupled with major price reductions and almost permanent promotional offers, are

among the driving forces behind the growth of urban tourism;

Since towns and cities are less and less centers of industry, tourism is being seen as a key

factor in their socioeconomic recovery and is often one of the priority strategies for their

development and rehabilitation;

Cities are increasingly being seen as products that complement neighboring more

traditional tourist destinations, from which cultural or shopping trips may be offered as an

added extra during a relaxing holiday on the beach, in the mountains or in the country;


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Urban tourism is playing a growing role in local, regional and European development

policies, whether from the point of view of regional development, the environment or

employment;

Urban tourism is undoubtedly becoming an important political issue requiring an ever

greater involvement of the public authorities because of the economic and social issues

involved and the high-level investment (often public) needed for infrastructure, facilities

and training. This is being reflected in practice by attempts to make facilities as multi-

functional as possible and by the appearance, throughout Europe, of:

Conference centers linked to complexes of hotels offering a wide range of standards,

with large rooms that can be adapted to host concerts, sports meetings or even

commercial events (exhibitions, trade fairs),

Vast leisure facilities in towns and cities or on their outskirts (leisure parks and theme

parks, tropical swimming pools, etc.);

In a context that has become extremely competitive, cities are working on strategies to

differentiate their image and gain a foothold in the market; their communication policies

are increasingly sophisticated and set out as far as possible a strong image of which their

residents can be proud;

Local officials are becoming aware that it is important to manage the tourism resulting

from upgraded local assets. They are in particular trying to prevent town and city centers,

where the tourism supply is traditionally concentrated, from becoming single-function

areas that no longer reflect authentic urban life;

Management of this type requires monitoring and follow-up tools and, in many cases, the

assistance of the public authorities in coordinating activities and, in particular, integrating

them into other urban functions; local authorities are also having to find ways of coping

with local public opinion that is intolerant of the disturbances caused by a massive influx

of tourists;


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The approach that urban destinations are taking reflects the need for the overall

rehabilitation of their environment and the need to find a balance, within a framework of

sustainable development, between resource management, economic performance and

social aspirations. The issues of accessibility and mobility can also be addressed in this

way;

In this competitive context, there is obviously a need for constantly improved skills and

ongoing human resource training (visitor orientation, knowledge of languages, new

information and communication technologies, etc.).

In the past years the main indicators of the touristic activity in the urban areas emphasize that

cities have an important percentage in the overall touristic circulation and a recent study conducted by

the European Travel Commission suggested that almost 20% of tourists who visit a European city

mention culture, in the broader sense of the term, as the main reason for their visit. In these

circumstances, urban tourism becomes associated naturally with cultural tourism and cities are

increasingly using cultural events to promote their image, encourage urban development and attract

visitors and investments.

That is why the European Capital of Culture Programme has become appealing for different

cities as their only possibility to visibly transform their cultural infrastructure, to boost the local

economy, to attract tourists and to improve their image. The specialized literature treats mainly the

subject of culture, as a means of promoting the cities and less the aspects regarding the European

Capital of Culture Programme and subsequent impact over the cities which implemented the

programme.

3. Urban marketing. General considerationsThe extensive urbanization led to the endorsement of the urban marketing concept; after 1990

the term begun to be widely used because of the increased competition between cities eager to attract

more tourists, inhabitants, potential investors, all these things leading to a better living standard. The

globalization had a direct impact over the public sector which is now required to reinvent itself and to

apply strategies and methods which were until now, distinctive for the private sector. More


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experienced in this area, the United States and several Western European Countries applied urban

marketing in their regional and local strategies and published their experiences as best practice

models in order that other organizations use it too. Among the urban centers that have an adjusted

urban marketing system are: New York, Paris, Barcelona, Vienna, Berlin, Amsterdam etc.

Thus, in Corsicos opinion, urban marketing is the alignment of the urban politics to the

requirements of the local economic stakeholders and to the hopes and expectations of those operating

outside of it, in order to better promote the local economy 7. Another marketing specialist, Jan van der

Meer, considers that urban marketing can be described as a set of activities directed to enhance the

correlation between the urban functionalities offer and the demand from its inhabitants, local

companies, tourists and other visitors8.

The marketing literature focuses on underlining the importance of city development and

constant promotion of its elements, the increased competitiveness being an indirect effect of the

applied strategies. Urban marketing must be designed as a general principle focused on city

development, thus, on problems regarding housing, jobs, communications, facilities, environment. It

is also characterized by a planning process including all stages of task allocation, current situation,

strengths and weaknesses analysis, definition of its own level of competitiveness and implementing,

monitoring and evaluating the activities. All these must lead to a concurring vision over the city and

tasks for all the stakeholders involved in the process. The development based on local potential,

significant projects, joint activities and the enhanced image as a whole must represent the goal

achieved through the urban marketing process9.

In essence, urban marketing implies: to project the adequate combination of community

characteristics and services, to establish attractive incentives for current and potential buyers, to create

and efficient and accessible products and services delivery system inside the city, to promote the

citys values and the image, so that the potential buyers will be aware of the distinctive advantages of

7 Corsico, F. (1994), Urban Marketing, a Tool for Cities and for Business Enterprises, a Condition for PropertyDevelopment, a Challenge for Urban Planning, Urban Marketing in Europe - International Conference, Ave, G. andCorsico; f. (eds.), Torino Incontra, Torino.8 Meer, van der Jan (1992), The role of urban marketing in the urban management, The European Institute for UrbanComparative Studies, Erasmus University, Rotterdam.9Koster, A. (1994), Urban MarketingA new Approach for Town Planning and a Chance for Reactivation of Sites in Old-Industrial Regions, Urban Marketing in Europe - International Conference, Ave, G. and Corsico; f. (eds.), Torino Incontra,Torino.


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the place. Thus, the perception over the cities and their image in the collective mind has become an

important active component in their economic success or failure of their development.

A key element in urban marketing refers to the difficulty of defining the citys identity and

values in a way that can be widely accepted and easily marketed for all target groups. The challenge is

given by the need to create a common identity from values that are not always intangible and which

represent the interests of different social and economic groups. City branding must determine how

culture, history, economic growth, social development, infrastructure, architecture, landscape and

environment, among other components, can be combined in an identity later to be sold10. In this

process, the decision makers role is crucial, and in order for the urban marketing to succeed, a long

term vision, both from the marketing and management point of view, is needed 11.

Economic development has always been a priority for cities, regions and states, but only in

the last decade they decided to change the perspective, from a rather narrow point of view over

economic progress, to a more widespread strategy aimed to attract new companies and to maintain the

existing ones, to develop international trade and tourism and to bring new external investors 12.

The states, regions and cities have transformed their circumstantial economic campaigns in

complex marketing strategies aiming to create competitive markets, to guide potential buyers and to

distribute communitys resources, thus it will respond to the needs and expectations of the expert

consumers.

3.1. Urban marketing in the European Capital of Culture Programme context. Sibiu CaseThe cultural programme is the central element of nearly all European Capital of Culture, and

represents on average 63% of the operational expenditure of European Capital of Culture Programme.

The European Capital of Culture cultural programmes are unique due to their scale, duration, scope

and the range of stakeholders and partners. No other large-scale cultural events are directly

comparable to the European Capital of Culture, and hosting the event was an unprecedented

10 Zhang, Li, Simon, Zhao (2009), City branding and the Olympic effect: A case study of Beijing, Cities, 26, pp. 245254.11dAngella, Francesca, Go, M., Frank (2009), Tale of two cities collaborative tourism marketing: Towards a theory ofdestination stakeholder assessment,Tourism Management, 30, pp. 429440.12 Kotler, Philip, Haider, H., Donald, Rein, Irving (2001), Place marketing, Bucharest, Editura Teora.


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experience for most cities13. The results published on the official website confirm that under the Sibiu

European Capital of Culture 2007 Programme were presented 337 projects, summing 2062 events

a kaleidoscope of artistic styles and directions for the different tastes: from the theater and painting,

music, film, dance, literature and architecture to contemporary art and gastronomy 14

The budgets spent by the authorizing officers for the entire cultural programme, published at the end

of the event, counting all categories of cultural programmes, including special projects and

manifestations, joint-programmes with Luxembourg, projects proposed by embassies and cultural

centers of the European Union countries and associated projects sustained by the local public

authorities are presented in the table below.

Table 1 - Financing of the cultural programme in Sibiu15

Sources of finance Total (Euro)

Ministry of Culture 4.137.000Sibiu Local Council (through the Radu StancaTheatre and Culture House)

8.200.000

County Council 450.000European Commission 1.400.000Sibiu 2007 Association 7.500

TOTAL 14.071.211

Additionally:Cultural operators contributions Approx. 2.276.500

Support from the 3rd European EcumenicalReunions' budget

388.000

CULTURAL PROGRAMME TOTAL

BUDGET

17.222.000

In addition to the financing of the cultural programme, a significant investment was also made

in cultural and other infrastructure in Sibiu, much of it by the national government.

Table 2- Infrastructure expenditure of Sibiu

Infrastructure Total (Euro)

Tourism infrastructure 117.046.574

Cultural infrastructure renovation 15.426.184

Historical centre renovation 4.062.479

Technical equipment (scenes/stages, lightingsystem, sounds system, projectors, etc)

896.768

TOTAL 137.432.005

13 Palmer/Rae Associates, European Cities and Capitals of Culture, Study Prepared for the European Commission,

Brussels, 2004.14www.sibiu2007.ro, accessed February 9th, 2011.15Sergiu Nistor (2008): Sibiu, Capital Cultural European 2007, Ianuarie 2005 - Decembrie 2007, Raport Sintez
http://www.sibiu2007.ro/http://www.sibiu2007.ro/http://www.sibiu2007.ro/http://www.sibiu2007.ro/


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Communication and promotion is closely related to some of the key objectives established by

the European Capital of Culture Programme, such as the enhancement of city image, attracting

visitors to the city, or expanding the local audience for culture 16.

The 21 European Capitals of Culture spent in total over 105 million Euros on communication

and promotion, in a range from just under 1 million to 14 million Euros, which represented between 7

and 24% of the total operating expenditure of the European Capital of Culture organization. However

these figures should be treated with caution, as most European Capital of Culture benefited from

significant additional promotional expenditure by tourist boards, media and travel sponsors, cultural

institutions and other partners.

The number of staff directly employed on communication and promotion varied from one to

forty, however most European Capital of Culture contracted elements out to public or private

organizations, with tourist boards and municipalities often assuming responsibility for tourism

marketing.

The most frequently used media by European Capital of Culture were print and broadcasting,

while new technologies (internet, SMS) were comprehensively exploited by several recent European

Capitals of Culture. Almost all used special events to promote the year, and a smaller number made

significant efforts using merchandise as a communication tool.

Sibiu was the first European Capital of Culture (ECOC) to be staged in one of the post-2004

EU accession Countries and even if it was a risky bet at first, due to lack of experience in managing

large scale cultural projects, to insufficient funding, or the fact that Romania was just joining the

European Union, in the end it proved to be a success story.

The main aims of the event were17:

Raising the international profile of Sibiu;

Long term cultural development;

Attracting international visitors;

Enhancing feelings of pride and self-confidence;

16

Palmer/Rae Associates,European Cities and Capitals of Culture, Study Prepared for the European Commission,Brussels, 2004.17Sibiu European Capital of Culture 2007 website, accessed January 29, 2011,http://www.sibiu2007.ro/en3/strategia.htm
http://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htm


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Growing and expanding the local audience for culture;

Improving social cohesion and creating an economic downstream;

Improving cultural and non cultural infrastructure;

Developing relationships with other European cities/regions and promoting European

cultural cooperation;

Promoting creativity and innovation.

In addition there were a number of specific aims in the area of communications and

promotion:

Raising the international profile of the city;

Changing the image of the city;

Increasing foreign and domestic tourism;

Broadening audiences for culture;

Improving the availability and dissemination of information about the programme is a

major task, now under the process of construction.

The key objectives for 2007 CCE Programme in terms of communications and promotion are:

Raising the international profile of the city;

Changing the image of the city;

Increasing foreign and domestic tourism;

Broadening audiences for culture;

Improving the availability and dissemination of information about the programme is a

major task, now under the process of construction.

Sibiu 2007 CCE Programme has several communications priorities:

Promoting the profile of the city;

Promoting the brand/image of the Capital of Culture;

Promoting the cultural programme of the Capital of Culture.
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Table 3The target audiences of the communication strategies

Audience 1potential visitors

Citizens from Sibiu and Romania, a national audience estimated at 5-5.5million persons, focusing on the mobile categories, interested in culturalevents and cultural tourism;Citizens from EU and other European countries, from USA, Canada,Israel, accentuating the traditional areas generating tourist flows forRomania. The European targeted audience was estimated around 40-45million people, focusing on the mobile categories, interested in culturalevents and cultural tourism;

Organizations of Romanians from abroad.

Audience 2informationmultipliers

Journalists and opinion-formers from Romania and abroad;Tourism operators;Business communities and lobby groups;European and international organizations (UE, Unesco, EC).

In order to better implement the programmethe representatives of the local stakeholders from

Sibiu decided to create an NGO which would be entrusted with the organization of SibiuEuropean

Capital of Culture Programme: The Association Sibiu/Hermannstadt European Capital of Culture

2007.

The Coordination Office Sibiu European Capital of Culture 2007 represented the

Association's executive board and had the following responsibilities:

General coordination for Sibiu 2007 Programme;

Thorough look into the objectives and artistic concepts of the Cultural Programme;

Selection of the projects in the preliminary stages;

Coordination and consultation with the Luxembourgian partners;

Implementation of the Cultural Programme;

Implementation of the communication and marketing strategy;

Administrative and financial management for the Programme.

The Association has been the main stakeholder during the Sibiu 2007 Programme managing the

marketing strategy alongside with the advertising company and the partners involved in the

programme. When implementing a large scale project like this it is essential to have a clear and

unique message communicated and so, the Association created the Visual Identity Guidelines which

described the elements to be used by the different cultural partners in order to promote the visual
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identity of Sibiu 2007 Programme within the context of its own event and the rules and limitations for

using these elements.

The Sibiu 2007 Programme logo was the following18:

The slogan, City of Culture City of Cultures was meant to underline the main characteristic

of the city which is multiculturalism. The motto: Sibiu - Young since 1191 emphasized the long

cultural heritage of the city and also the modern context of its citizens evolution.

The promotion campaign for Sibiu European Capital of Culture 2007 was carried out with

the support of GAV Scholtz & Friends, the company which won the auction. The program was

promoted both at national and international level using different instruments of promotional mix: TV

and Internet campaign, PR campaign, outdoor campaign, radio spots, and presentation films.

The main communication vehicle used during 2007 event was the Programme website:

www.sibiu2007.rowhich was in Romanian, English and German so both national and international

tourists could find useful information.

Table 4 - Budget for the Communication and Promotion Campaign for Sibiu European Capital ofCulture19

18Visual Identity Guidelines, Coordination Office for Sibiu European Capital of Culture 2007 Program

19 Sergiu Nistor (2008): Sibiu, Capital Cultural European 2007, Ianuarie 2005 - Decembrie 2007, Raport Sintez

Services and products Expenses Euro/Ron

Total campaign 1.596.498 Euro

Total services, out of which: 571.003,29

General communication strategy 61.642Creative concept 94.021,41

Media fee 49.922,88European PR & Marketing Agency Fee 99.013,71Local PR & Marketing Agency Fee 39.522,28Media monitoring 55.247,39Information centre personnel training 33.281,92Overhead agency 93.369,68

Total products, out of which: 5.176.391,16

Spot radio 30"/RC 30" 16.640,96Spot TV 30"/TVC 30" 331.296Spot TV 2 116.695

Presentation clip 2min/ FP 2 min 124.950National and international media coverage: TV, radio 1.289.670,24
http://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/en3/strategia.htmhttp://www.sibiu2007.ro/http://www.sibiu2007.ro/http://www.sibiu2007.ro/


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The outcomes of the campaign were20:

Integrated communication campaign: TV (three spots, outdoor, PR campaign, radio

campaign);

International TV campaign: three international TV channels (EuroNews, Travel Channel,

National Geographic), 1460 spots aired over a period of three months: 50 % to National

Geographic, 30 % to EuroNews and 20 % to Travel Channel;

more than 55 million people targeted in Great Britain, Austria, Belgium , Denmark,

Finland, France, Germany, Ireland, Italy, Holland, Norway, Portugal, Spain, Switzerland,

Bulgaria, Croatia;

National TV campaign: four national TV stations (TVR 1, TVR 2, TVR Cultural, TVR

Internaional), over 1600 spots aired, out of which 457 on TVR 1 a nd TVR 2, with an

estimated target audience of 7 million people;

Two outdoor campaigns (spring and summer-autumn) with over 3900 square meters of

outdoor advertising displayed for 150 days in 48 central locations in Bucharest, Brasov,

Targu Mures, Arad and Sibiu;

Internet campaign with banners and pop-ups on three European websites for a period of 8

to 12 weeks:www.euronews.net,www.travelchannel.com,www.nationalgeographic.com.

2808 articles about Sibiu 2007 in the national press (October 2006 December 2007), an

average of 8 articles per day;

2386 minutes in the news on national TV stations (JanuaryDecember 2007), an average

of 7 minutes aired daily on national news programmes.

457 minutes of news on national radio stations (October 2006- December 2007);

20 Nistor, Sergiu, Sibiu, Capital Cultural EuropeanRaport sintez, Bucureti, Martie 2008

PR & Marketing products - extern 1.222.625,2PR & Marketing products - local 587.425,9Web design (banner, interface, etc.) 43.050,24Street billboards campaign 1.438.492,23

Badges 5.545,4
http://www.euronews.net/http://www.euronews.net/http://www.euronews.net/http://www.travelchannel.com/http://www.travelchannel.com/http://www.travelchannel.com/http://www.nationalgeographic.com/http://www.nationalgeographic.com/http://www.nationalgeographic.com/http://www.nationalgeographic.com/http://www.travelchannel.com/http://www.euronews.net/


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The general attitude of the articles toward the programme: negative 5%, neutral25%,

positive70%.

Besides the contracts financed by The Ministry of Culture and implemented through GAV

Scholz & Friends, Realitatea TV station signed a partnership with Sibiu CCE 2007 Association to

promote the event.

The partnership consisted in:

Daily airing an one minute reports, in the evening news about SibiuEuropean Capital of

Culture, named The number of the day in Sibiu;

The show EU, Romania was dedicated, twice a month to Sibiu European Capital of

Culture;

Another series of materials on SibiuEuropean Capital of Culture were broadcasted once

a week on Sunday in the afternoon news under the name Eurocapitala with an average

duration of 8 minutes;

Another series of materials labeled Sibiu week at the Money Channel were broadcasted

during the daily show Todays agenda on The Money Channel TV Station.

The Development strategy of Sibiu County for 2010-2013 mentions as a priority of the

tourism sector the development and communication of Sibiu Brand. The strategy aims to capitalize

the positive image acquired throughout the European Capital of Culture Programme21.

4. Economic impact of tourism. General considerationsTourism has a variety of economic impacts. Tourists contribute to sales, profits, jobs, tax

revenues, and income in an area. The most direct effects occur within the primary tourism sectors

accommodation, restaurants, transportation, amusements, and retail trade. Through secondary effects,

tourism affects most sectors of the economy. An economic impact analysis of tourism activity

normally focuses on changes in sales, income, and employment in a region resulting from tourism

activity22.

21

Strategia de dezvoltare a judeului Sibiu pentru perioada 2010 2013 i direciile de dezvoltare ale judeului pentruperioada 20142020, Sibiu, 201022 Daniel J. Stynes, Economic Impacts of Tourism


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Figure 1The benefic effects of Tourism

Table 5 - The economic impact of tourism on Romanians Economy. Key Facts 201023:

Gross DomesticProduct (GDP)

The contribution of Travel & Tourism to Gross Domestic Product (GDP) isexpected to rise from 5.1% (RON25.9bn or US$9,005.9mn) in 2010 to 6.4%(RON78.8bn or US$22,825.7mn) by 2020.

GrowthReal GDP growth for the Travel & Tourism Economy is expected to be -5.4% in2010 and to average 7.3% per annum over the coming 10 years

Employment

The contribution of the Travel & Tourism Economy to employment is expectedto rise from 6.1% of total employment, 519,000 jobs or 1 in every 16.3 jobs in2010, to 7.7% of total employment, 670,000 jobs, or 1 in every 13.0 jobs by2020.

Visitor ExportsExport earnings from international visitors are expected to generate 2.4% oftotal exports (RON4.5bn or US$1,570.4mn) in 2010, growing (nominal terms)to RON16.3bn or US$4,729.4mn (2.6% of total) in 2020.

InvestmentTravel & Tourism investment is estimated at RON10.3bn, US$3,577.7mn or7.4% of total investment in 2010. By 2020, this should reach RON38.4bn,US$11,126.2mn or 7.8% of total investment.

23Travel and Tourism Economic Impact, World Travel & Tourism Council, Report on Romania, 2010.

Number of tourists

The increase of the net use of

accommodation capacity

indices

New companies attracted in

the region

Local businesses supply more

goods and services

New jobs directly created New jobs indirectly created

When employees spend their salaries, more jobs are

created and more incomes for the national and local

budget are assured, out of the payroll taxes.

The area becomes more attractive The taxes are used for funding infrastructure

rehabilitation, touristic services and image.

Tourists expenditure


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4.1.Economic impact of tourism in the context of European Capital of CultureIt is rather difficult to separate the impacts of the European Capital of Culture Programme

itself from the general growth in tourism supply in Sibiu, which would probably have shown some

growth without the European Capital of Culture as well. However, looking at the pace of growth, it is

clear that the period after 2007 has seen a substantial increase in the supply of hotels and other

accommodation facilities.

Table 6 - The evolution of the accommodation capacity in Sibiu County 20052010

Year Number of units Accommodation capacityAccommodation capacity

Newly classified structures2006 273 4333 -421

2007 359 5710 13772008 449 7161 1451

2009 481 8085 924

2010 518 8983 898Source: compilation between INSSE statistical data, Masterplan for Tourism in Sibiu County, Sibiu County TourismAssociationAnnual Report 2009

As we can see from the table above 2007 has been an important year in the touristic

development of Sibiu, from the number of touristic units and accommodation capacity, point of view.

The overall result has been a doubling of total accommodation supply since 2006 and a continuous

positive trend. It is also relevant that several large commercial hotels development accommodation

facilities mainly in Sibiu, but also in the surrounding area.

The predicted increasing of tourists attracted many investments in hotel industry. The total

amount spent for refreshing accommodation establishments was 60 million Euros 24. Many existing

hotels were renovated and some of them were reclassified to an upper category. Due to the fact that

many of the hotel projects related to the European Capital of Culture were not actually operational

until 2007 or even in 2008, the biggest effects of hotel development were actually felt the year after

the European Capital of Culture Programme. By 2009 Sibiu had an additional six four or five star

hotels compared with 2006. This way, not only did tourism increase, but visitors also stayed in higher

grade accommodation and therefore paid higher average room rates.

24 Smaranda Cosma, Adina Negrusa and Cristina Popovici, Impact of Sibiu European Capital of Culture 2007 event oncountry tourism, Proceedings of the 2nd WSEAS International Conference on CULTURAL HERITAGE and TOURISM.


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The economic impacts of tourism are typically estimated by some variation of the following

simple formula:

Economic Impact of Tourism = Number of Tourists * Average Spending per Visitor * Multiplier

Multiplying the number of tourists by the average spending per visitor gives an estimate of

total tourist spending in the area. Multipliers are only needed when determining the secondary effects

of tourism spending25.

In assessing the economic impact of the Sibiu European Cultural Capital Programme on the

visitor economy, I have used the analysis of two of the three indicators, considering that the

multipliers are still to be calculated for the Romanian economy:

1) The estimated number of additional visits created by the Sibiu European Cultural Capital

Programme.

2) The estimated spend from these visits.

1) The estimated number of additional visits created by the Sibiu European CulturalCapital Programme

The tourism statistics show a clear boost both in terms of arrivals and overnights during the

European Capital of Culture Programme in 2007. The fact that, starting with the following year, the

number of tourists decreases is rather normal considering the global economic crisis, which had an

important impact over the touristic activity. However, we need to take into consideration the fact that

the decline was framed in the general national trends and that almost a third of overnight visitors

stated that they stayed with friends and relatives when visiting Sibiu in 2007, so the decrease showed

by the official statistics may not be entirely accurate.

Table 7 - Tourist arrivals and overnights in Sibiu County 2006-201026Year Arrivals

(thousands)Overnights(thousands)

Difference inarrivals (%)

Difference inovernights (%)

2006 252.7 434.5 - -

2007 327.9 530.1 29.75 22.00

2008 287.1 459.3 -12.48 -13.352009 240.1 375.9 -16.37 -18.15

25 Daniel J. Stynes, Economic Impact of Tourism, 1999.26www.sibiu.insse.ro, National Institute of Statistics, Sibiu County Department, accessed January 29, 2010..
http://www.sibiu.insse.ro/http://www.sibiu.insse.ro/http://www.sibiu.insse.ro/http://www.sibiu.insse.ro/


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2010* 196.1 345.6 - -

*statistics available until November 2010

Table 8 - Tourist arrivals and overnights in Sibiu City 2006-200927

Year Arrivals(thousands) Overnights(thousands) Difference inarrivals (%) Difference inovernights(%)

2006 150 235

2007 178.5 280.9 19.00 19.53

2008 147 204 -17.65 -27.38

2009 120.3 164.2 -18.16 -19.51

Table 9 - Total spending by visitors staying in Sibiu City according to official statistics, 2007-200928

Year Overnights(thousands)

Spend pernight

Total spend(million Euro)

2007 280.9 91 25.6

2008 204 85 17.32009 164.3 130 21.4

The spending habit of the tourists modified in 2009, partially because some of the investments

in touristic infrastructure become operational in 2008 and in 2009, so the tourists could opt for better

accommodation which is also more expensive.

In a survey conducted in 2009, the respondents were asked if they had prior visited Sibiu in

2007 during the European Capital of Culture Programme. In 2008, 50% of the tourists declared that

they have visited Sibiu in 2007 and in 2009, 74% stated that this is their second visit since 2007. The

high percentages show the positive impact of the European Capital of Culture Programme on tourists

visiting habits and the fact that the investment in touristic infrastructure and marketing was

constructive.

Considering the percentage of people who stated that they have prior visited Sibiu during the

European Capital of Culture Programme, we can presume that the positive experience of the prior

visit was the main reason for visit in 2008 and in 2009.

Table 10 - Number of visitors motivated by the European Capital of Culture Programme:

Year Arrivals(thousands)

Overnights(thousands)

2008 73.5 150.96

2009 60.15 121.508

27 Richards, Greg and Rotariu, Ilie, The Impact of the 2007 European Cultural Capital in Sibiu: A long term perspective,

Sibiu, Editura Universitii Lucian Blaga din Sibiu, 2010, p. 39.28 Richards, Greg and Rotariu, Ilie, The Impact of the 2007 European Cultural Capital in Sibiu: A long term perspective,Sibiu, Editura Universitii Lucian Blaga din Sibiu, 2010, p. 40.


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2) The estimated spend from these visitsThe research conducted in 2009 determined the spending habits of the tourists visiting Sibiu

in order to better establish the direct economic impact on the local economy. The figures on average

visitor spending show that spend levels have increased since 2007. The average visitor to Sibiu now

spends almost twice as much as the average visitor before 200729.

Figure 2 - Average total visitor spend 2001-2009

Total average visitor expenditure increased very little between 2007 and 2009. This is

basically because the European Capital of Culture Programme attracted a relatively high number of

foreign travelers and other high spending tourists. However, the average daily spend has increased

significantly since 2007, largely as a result of a shift in spending patterns.

Figure 3 - Average spend per day (Euros) 2007 and 2009

29 Richards, Greg and Rotariu, Ilie, The Impact of the 2007 European Cultural Capital in Sibiu: A long term perspective,Sibiu, Editura Universitii Lucian Blaga din Sibiu, 2010, p.36.


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Figure 4 - Visitor spend by category 2007 (excludes Sibiu residents)

The tourist spend by category show that accommodation expenses represent the most important sum

in the tourists budget which also explains the fact that the operators declaring the biggest boost in

revenues were hotel and pension owners: 95% of them stated that the European Capital of Culture

Programme had a significant and high impact over their finances 30.

From the tourist operators point of view, the results of the survey revealed that they have registered

the highest increases in turnover in 2007 compared with 2006 - 13.7%, transporters with 10.9% and

restaurants / bars with 7.9%.

Figure 5 - Visitor spend by category 2009 (excludes Sibiu residents)

30 The Study and Research Centre for Tourism, The Impact of the Sibiu 2007 Programme on Companies from Sibiu Area,Sibiu, 2008, p.7.


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In 2009 the survey shows less spending on travel which confirms the increased level of

domestic tourism, as a consequence of the economic crisis which compels tourists to travel closer to

their home location.

5. ConclusionsIn the end we can state that the Sibiu - European Capital of Culture Programme had two types

of economic benefits:

Quantifiable economic benefits:

The significant impact on accommodation development both in terms of

quantity and quality, not only in the city itself but also in the surrounding area:

a 31% increase in number of accommodation units in 2007 compared to 2006

and 25% increase in 2008 compared to 2007, the same enhance percentage

pertains to the accommodation capacity.

The considerable increase of the tourists indicators, in 2007 compared to 2006, both

in terms of arrivals and overnights: 29.75% boost in arrivals in 2007 and 22%

increase in overnights for Sibiu County. The increase for Sibiu City was of 19%.

The positive trend of tourists visiting Sibiu recurrently, after attending the European

Capital of Culture Programme: 50% of those visiting in 2008 and 74% of those from

2009;

The increase in the total average visit spend, which has an important direct impact on

tourist operators: almost a 90% increase in 2007 compared to 2004;

The changes registered in the expenditures made by tourists: less spending on travel

and more on accommodation, shopping and admission: which ensure higher incomes

for the local tourist operators on products and services locally produces.

Non-quantifiable economic benefits:

Enhancing the image of the city and increasing Sibiu visibility as an appealing

tourism destination;


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The investments made in the public infrastructure increased the competitiveness level

of the city;

The success of the programme enhanced the social cohesion within Sibiu and raised

attractiveness for potential inhabitants better skilled and qualified;

The increase of the housing and land value in the area as an impact of the improved

touristic attractiveness;

Changes in the quality and quantity of goods and services the increased tourism

demand can lead to a wider array of goods and services available in Sibiu area.

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Culture 2007 event on country tourism, Proceedings of the 2nd WSEAS International Conference on

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dAngella, Francesca, Go, M., Frank (2009), Tale of two cities collaborative tourism

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Frank, Howie (2003),Managing tourist destinations, Thomson Learning EMEA.

G. Cazes, Fr. Potier (1996),Le tourisme urbain, PUF, Paris.

Koster, A. (1994), Urban MarketingA new Approach for Town Planning and a Chance for

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Meer, van der Jan (1992), The role of urban marketing in the urban management, The

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National Institute of Statistics, Sibiu County Department, www.sibiu.insse.ro, accessed

January 29, 2010.

Nistor, Sergiu (2008): Sibiu, Capital Cultural European 2007, Ianuarie 2005 - Decembrie

2007, Raport Sintez.

Palmer/Rae Associates (2004), European Cities and Capitals of Culture, Study Prepared for

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Richards, Greg, Rotariu, Ilie (2010), The Impact of the 2007 European Cultural Capital in

Sibiu: A long term perspective, Ed. Universitii Lucian Blaga din Sibiu, Sibiu.

The Study and Research Centre for Tourism (2008), The Impact of the Sibiu 2007

Programme on Companies from Sibiu Area, Sibiu.

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(IQM) of urban tourist destinations,Brussels.

World Travel & Tourism Council (2010), Travel and Tourism Economic Impact,

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UNWTO, Tourism 2020 Vision, Volume 7, Global Forecasts and Profiles of Market

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