Latest News in Romanian Tourism

Tarom Cuts commission

At the beginning of May, Tarom, announced that it will significantly reduce its commission givven to travel agencies for the sales of flight tickets. The competition between travel agencies heats up as their existence is pushed to the bare edge. The same decision is expected from the rest of the airline operators.
Romania is just experiencing the effects of the new age virtual economy. As an example, the number of travel agencies in US, in the period from 1994 to 2005, has reduced by 11.000. As a result of the appearance of e-tickets and the elimination of the commission for airline tickets.

The sale of e-tickets is growing every year, but the commissions given by the airline operators began to disappear. The first step in Romania was made by the national flag carrier, Tarom. Tarom reduced its commission given to the travel agencies from 7% on 1%, leaving the latter scramble for leftovers. Practically, until now, all the agencies were receiving a 7% reduction on Tarom's tickets, so the prices were more or less the same in all the agencies. The airline ticket makes a great deal of the tourist agency revenue, even more important than the services it provides.

Catalin Zlota, Tarom's Commercial Director, declared that, the decision for reducing the commission was not taken over night. It is just following the current trends in the world of airline travel, a movement that began in the US and continued in Western Europe several years ago. As mr.Zlota referred, Tarom has announced this decision since 2004, but in that year the airline industry was still not recovered after the events on 11th September and the SARS epidemy.

The announcement created a panicle reaction from the travel agencies, which claimed that they weren’t, consulted prior this decision. 167 travel agencies, members of ANAT (national association of travel agencies), with over 240 points of sale, are representing 72% of the total sales of airline tickets for Tarom in Romania.

Lucia Morariu, first vice-president of ANAT, said that the example given by Tarom will soon be followed by the rest of the airline operators, which will in short time eliminate the commission. This will heavily affect the travel agencies network form Romania, which will be obligated to lose the principal source of income.

Catalin Zlota from Tarom, answered with irony on this statement, declaring that travel agencies should be happy about this decision, because by not receiving commission, they will have to improve their services in sense to satisfy clients. Leaving only quality agencies survive. He also mentioned that Tarom will continue to give bonuses to agencies whose ticket sales performance is good.

Alin Burcea, the president of Paralela 45 travel agency, said that the reduction of commission from 7 to 1% is a European tendency, Tarom should have just waited with the decision until 1st of January 2007.

Simon Alb, Director of the National Tourism Bureau of Romania in America, believes that the reduction of the commission was a drastic measure but any tourism agency owner would’ve made the same move if he led an airline company. He also mentioned, that it doesn’t strictly mean the end of the airline ticket distribution through travel agencies. Travel agencies could offer better prices if they obtain special prices from the airline company. In the States, a travel agency is profits 20-25$ for a single ticket reservation.

Indifferently how many agencies will disappear in the following years, one thing is for sure; many of them will have to become more than just a simple ticket office and start practicing what they really do, that is tourism.

Source: www.btw.ro
Date: the 27th April 2006.


Austrian Airlines leadership change

After leading Austrian Airlines' Romania and Moldova corporate plans for eight years, Wolfgang Groeger leaves Bucharest to continue his work for Austrian Airlines in Baku, Azerbaijan. Beginning with the first week of May he will be replaced with Heinrich Vystoupil, who was Austrian's Country Manager for Slovakia.

During Mr. Groeger's time in Romania, Austrian introduced code share flights with Tarom and increased the number of flights between Vienna and Bucharest from one to four daily. Further increases of flights include Timisora and Chisinau as well as the introduction of direct flights between Vienna and Cluj, Sibiu and Iasi.

Heinrich Vystoupil, is part of Austrian Airlines since May 2001, starting his career in the Cargo Department, where he was in charge for the worldwide Quality Management. In July 2002 he changed from Cargo to One Passage division and was heading the Sales Support & Marketing department for the home market Austria. In May 2003 he took over the responsibility as Country Manager in Slovakia. During his time in Slovakia the flights of AA between Vienna and Kosice doubled as well as a European Call Center has been established. Mr. Vystoupil is looking at the new appointment as a new motivating challenge.

Source: www.btw.ro
Date: the 27th April 2006.

Wizz air enters Romania

Air Transportation Company Wizz Air will start its activity from the Transilvania Airport, located in Targu Mures, said the president of the Mures County Council, Lokodi Edita Emoke.
Mr. Lokodi stated that, Wizz-air's representatives were just scoping the business potential of the county in the previous year. With the investigation obtaining positive indicators, company's representatives, recently expressed their intentions to shake a deal with Mures county local authorities.
Wizz Air is a London-based company focused on low cost flights towards the Central and Eastern Europe.
The company operates through its Polish and Hungarian branches and has more than one million passengers each year.
Air flight companies Carpatair, Cimber Air, Tarom and Malev presently operate out of Transilvania Airport.

Source: www.btw.ro
Date: the 27th April 2006.


Over RON 170 M allocated to make progress with Bucharest-Constanta motorway

On April 26th, Romania's Government approved the allocation of 170 million RON, for acceleration of the construction of the last segments of the Sun Highway, leading from Bucharest to Constanta.
Namely the works were delayed on the last segments 4 and 5 that connect Drajna-Fetesti and Fetesti-Cernavoda, respectively.Government spokesperson, Oana Marinescu has stated that, advancing the time-table of the works will allow the opening of the first segment Drajna-Fetesti on July 1st 2006 in both ways and the completion of the car parks, the maintenance centre and the service spaces before mid-December 2007. The advancement of works along the Fetesti-Cernavoda segment will also allow the opening in July 2006 and the completion of the Cernavoda road knot and the toll station in September 2006.

The amount will be included in the budget of the Ministry of Transport, Constructions and Tourism and will be divided on annual budget exercises. Thus, in 2006, RON 136.4 M are to be allocated, in 2007, RON 32 M, in 2008, RON 0.95 M and in 2009, RON 0.33 M.

Oana Marinescu also said that the Ministry of Transport had presented a report on the state of play of a number of infrastructure projects. The MTCT estimates to conclude the modernizing of 35 km of the Bucharest-Pitesti motorway in December 2006 and to widen the Otopeni Crossing to six traffic lanes, the ramps included, and the road between the Otopeni Crossing and the Otopeni Airport to six lanes, as well by June 2006.

Works on National Road 6 from Timisoara to Lugoj are expected to be completed in December 2006. Two road segments on National Road 6 between Craiova to Drobeta Turnu Severin will also be finalised in November 2006. The bypasses in Timisoara and Craiova are expected to be completed in November 2006 and December 2006, respectively.

As far as Cernavoda - Constanta motorway segment is concerned, companies interested in providing consultancy and technical assistance to the works must submit their letters of intent by June, 2, according to MTCT.

Source: www.btw.ro
Date: the 27th April 2006.


Continental changes its name

The General Board of Shareholders of S.C. CONTINENTAL S.A. decided to change the company’s name, thus the only Romanian chain of hotels was registered at the Commerce Registry Office under a new name: S.C. Continental Hotels S.A.
The company recently signed a contract with a consortium formed by BRD Securities, Raiffeisen Capital & Investment and Alpha Finance in order to prepare for the listing at the Bucharest Stock Exchange, at the beginning of July, 2005.
The chain signed last summer an agreement with ACCOR, the owner of the Ibis, Novotel and Sofitel brands, through which the two companies will create a network of accommodation units in all the large cities in Romania.
Continental Hotels intend to build in the following years an Ibis Hotel in each county residence. The estimated investment budget rises at about 34 million Euro until 2008, in this period being planned the construction of 5 hotels. For 2005, the company estimates revenue of 28 milion Euro.
Recently, Continental Hotels sold the hotel owned in Cluj Napoca to the shoe factory Ardeleana from Alba Iulia, and the company’s medium term plans include setting two other units in this city – a Continental Hotel and an Ibis Hotel.

Source: www.btw.ro
Date: the 27th April 2006.



George Copos - Ministry of tourism a necessity

The Vice-prime minister, George Copos, shared his opinion that a Ministry for Tourism is essential for Romania's economy. This body would elaborate a coherent strategy for developing Romania's ailing tourism industry.
On April 21-st, George Copos, on a meeting with local authorities from Curtea de Arges stated that, the tourism should become Romania's national interest. He pointed out countries like Bulgaria and Hungary, countries with far smaller natural potential than Romania, but which produce 16-17%, of the total GDP, just from tourism. Romania's tourism industry currently participates with just 4% in the country's GDP.
Mr. Copos, continued that the earnings out of tourism are less than 2 billion euros per year. He declared that he will support the local authorities to develop the county tourism and he adviced them to get involved in projects funded by the European Union.

Source: www.btw.ro
Date: the 27th April 2006.

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