Service sector in terms of changing environment

Macedonian hotels in conditions of changing environment

Raman Ismaili 1, Mitre Avramoski 2
1

State University of Tetova, , Faculty of Economics, departament of Tourism, Tetova 1200, R.Macedonia
2

Faculty for Tourism and hospitality, Ohrid 6330, R. Macedonia,

Abstract

Hotel industry represents the main pillar in the supply of tourism products of a certain tourist destination. The level of development of the hotel industry represents the main indicator based on which is done assessment of tourist development of certain country. Namely, the development and situation of hotel industry in the Republic of Macedonia is determined by rapid changes occurring in its environment. In this paper hotel industry in Macedonia is interpreted and analyzed in two periods that means, the transition period inclusive with 1992 year and the period after transition that covers the period until today. Analyses show that the hotel industry in our country did not remain immune of the extreme changes of tourist market in the region. Changes on one side in the hotel supply and on the other side changes of tourist demand for marketing and management of hotel firms has emerged as a major task how to achieve competitive advantage in the market. Based on the analyzed data, the hotel industry in the Republic of Macedonia represents fragmented industry without leaders in the market, but with possibility of consolidation and adjustment according to external pressures of changeable environment. Authentic and uniform character of hotel supply requires thoughtful marketing efforts, about how to compete, even how to be in competitive advantage in the tourist market. Such assumptions dont represents only the range of success of the hotel supply but need of continuous recognition and adjustment based on rapid changes of tourist market.
Key words: Hotel industry, tourist supply, tourist market, changeable environment in Republic of Macedonia

1. Introduction
The environment inevitably affects all subsystems of the economic system, so it`s effects do pressures and reflect on tourist industry. The constituent elements of the tourist market as significant factors in its specificity simultaneously express the character of the tourist market. On one side elastic travel demand, and the other inelastic tourist offer, create a need for a careful balance of internal opportunities of the holders of tourist demand on the external pressures of the changing environment. The great pressure of the changing environment on the tourist industry comes from the complexity and heterogeneity of this economic activity Namely, with such rules of the game its pressure is expressed on the pillar of the tourism offer holders, respectively the hotel industry, which is forced to adapt to the new emerged situations. Basing on the above arguments appears that the development of hotel industry in Macedonia has not remained immune of the pressure of the changing environment. The development of hotel industry in R. of Macedonia didnt remain immune to the changes occurred in the environment.

The development of hotel industry in the R. of Macedonia can be interpreted and analysed within two periods and those are the one until the transition including the year 1992 and the second period is after the transition including the year 2010. 1

In the research of Macedonian hotel industry the investigation was based on the changing number of hotel facilities, their capacities in relation to the number of rooms and beds, the participation of hotel capacity in relation to other accommodation capacity aiming to bring out a conclusion based on the grade of utilization of hotel capacity during two significant periods characterized with turbulent changes inevitably imposed from changing environment. 2. The development and conditions of hotel industry in republic of Macedonia Until its independency in 1992, which is considered to be the last year before the beginning of the transition, R. of Macedonia had 82 hotel facilities in disposition, while in 2010 this number increased in 124 hotel facilities. This means that until the period of transition the number of hotel facilities was smaller compared with the one during the post-transition period. The chronology of the development of the hotel industry in the R. of Macedonia is showing a positive trend in sense of the increased number of hotel facilities but not as well in sense of the number of rooms and beds in the newly constructed hotel facilities.
Table 1: Hotel capacity in Republic of Macedonia 1

Year

Number of hotels 82 82 85 85 89

Number of rooms 5916 5895 5961 5983 5935

Number of beds 14564 14468 14626 14629 14434

1999 2000 2001 2002 2003

2004 2005 2006 2007 2008 2009 2010

1

94 101 91 93 95 110 124

5989 6024 6086 6222 4747 5142 5651

14536 14369 14538 14832 10364 11307 12734

Source: Data from Statistic Year Books of R. of Macedonia from 2004, 2005, 2006, 2007, 2008, 2009,2010 and 2011

The data from the above mentioned table 1 clearly show that in the period from 11 years from 1999 until 2010 the number of hotel facilities has increased for 51.2%, while the number of beds has decreased for 13%. This trend results from building of new hotel facilities with less accommodation capacity. Also it is very interesting if we notice the dynamic of the number of rooms within hotel facilities, which according to the data of the research shows a negatively developing trend. Between the year 1999 and 2010 the number has decreased for 4.48%. The reason behind this disproportion, on one side the increasing number of hotel facilities and on the other side the decreasing number of rooms and beds within hotel facilities, can be explained through newly generated changing environment of the hotel industry in R. of Macedonia. An important reason for this developing trend within hotel activity in our country represents the decomposition of former SFRY. Back then the Yugoslavian market represented a good determinant for the needs around the construction of receptive capacities along the entire territory of the former state and also in R. of Macedonia. The centralizing nature of the Yugoslavian market and the state owned hotel facilities were the main reason for unplanned construction of hotel capacities along the territory of the former state. The breakdown of the tourist market after the decomposition of Yugoslavia generates also other conditions for this market but with new rules of the game, that are very important for its existence. After the decomposition of SFRY the market mechanisms gained new dimensions and relationships in sense of decreasing the demand toward Macedonian tourist market. Having in consideration the newly generated conditions in the tourist market, in which the hotel industry was the main holder of the tourist offer, to Macedonian tourism there were other conditions and rules imposed, on which was focused the entire tourist potential in function of finding new possibilities for the appearance and positioning of the market. Based on the above mentioned reasons we can justify the new trends of increased number of hotel facilities with less accommodation capacity as respond to changes in the tourist demand. After the independence of the R. of Macedonia the weakly developing hotel industry was due to badly managed privatization process of existing hotel facilities. As result of bad privatization we had lack of investments and stagnation in the construction of new modern hotel facilities which will represent an answer to newly generated conditions in the market In order to determine the place of the hotel activity as being part of the contemporary catering industry of R. of Macedonia we will present only few data for 2010. The meaning and role of the hotel activity within the catering industry in Macedonia is being expressed through the percent of hotel rooms and hotel beds within the total catering offer.
Table 2: The share of hotel accommodation in total capacity hotel accommodation in the Republic of Macedonia in 2010.

Capacity types in catering Hotels from 1* to 5* Other types of accomodation capacity Total

Number of rooms 5.651 20.538 26.189

Number of beds 12.734 56.368 69.102

The data for accommodation capacities presented in Table 2, show that the Republic of Macedonia in year 2010 has 26 189 rooms and beds 69 102, while hotel industry in the total figure towards the rooms that our country has, participates with a 5651 number of rooms and 12 374 beds. Namely, percentage represented of the number of 3

hotel rooms of all types of categories of hotels, in the total number of rooms at catering industry that our country has is 22%. As it is mentioned above, the total number of beds in catering industry in Macedonia is 69,102, while only hotel capacity participates with 12 374 beds, this means that the hotel beds in the total figure of beds at the catering industry participates with 18.9%.
Table 3: The total of nights spent by tourists in Macedonia in year 2010.

Nights spent by tourists by types of accommodation Hotels from 1* to 5* Other types of accommodation capacity The total number of nights spent by tourists

Domestic tourists 229.411

Foreign tourists 458.760

Total number of tourists 688.171

1.231.774

100.272

1.332.046

1.461.185

559.032

2.020.217

In year 2010 in Macedonia are realized 2,020,217 overnights from which 688,171 in hotel facilities of all types of categories. It is interesting information that even though hotel industry participates with 22% in the total capacity of the rooms, and 18.9% in the total number of beds, still the percentage of total nights spent by tourist is 33% in all categories of hotels. The data shows that hotel industry has higher percentage of usage of the existing accommodation capacities vs. other accommodation capacities that our country possesses. The structure of the tourists who stayed in the hotel facilities of all categories is in favor of foreigners who have participated with 63% of overnights, while domestic tourists with 37%. Due to the need of the conclusions that are determined from the purposes of the research it is important to highlight the analysis on the utilization of coefficient of the capacities of hotel facilities in Macedonia, but included in the two periods, as follows: the period before the transition process until 1992 and the period after transition process until 2009 For the period before the transition of the Republic of Macedonia until year 199,theutilization coefficient of the hotel facilities on all hotel categories is19.3%,theperiod after transition is consisted from interpretations that are covering the period1999 to year 2007.For these six years the trend is in regressive directions of movement in the total value, as well as based different categories of the hotel facilities. Lowest coefficient of utilization on hotel facilities shows year 2001, in the total value of only 7.7%. The last year i.e. year 2007, reflects the coefficient of utilization on the capacities of the total utilization of only 12.2%. According to the above mentioned data and their analysis may be noted that the largest hotel capacities in the transition phase have higher economic justification, which arises from the bigger coefficient indicators of their utilization. However, the enormous importance is to highlight that for largest coefficient of utilization of the hotel facilities until transition brought the size of that time tourist market.
Table 4: Coefficient (in%) of the utilization of the hotel accommodation capacities in the Republic of Macedonia

Year 1991

% of usage of total categorized hotels 19.3

2007

12.2

While after the transition process the utilization of hotel capacities in a huge percentage shows high regression, which appears as reason of weak organizations of hotel operations in the Republic of Macedonia.

3.Conclusion
Research shows that development of the hotels in R. Macedonia is conditioned by the development of the situation of the environment. The collapse of former SFRY brought extreme changes in the tourist market, so Macedonian hotel business got in position for the structural changes within its interim possibilities, and same to adapt balanced according to the external pressure that are coming from new environment. That is the trend of development of the hotel industry is moving toward a promising direction. This conclusion is brought up with the fact that the participation of hotel accommodation capacity in the total number of hospitality is in better situation in our region. The increased range of the hotel facilities on one side, and on the other side the reduction of the total hotel capacity shows that hospitality in Macedonia is restructuring, but not with its desired dynamics. Its role and the share in accommodation of tourist offer is significant more than many other tourist destinations. The degree of utilization of the hotel capacities also shows in the research that the Republic of Macedonia possesses a concentrated offer on hotel accommodation capacities with predominantly coastal hotels for summer holiday, which shows that new capacities are adjusted toward new conditions imposed by environmental changes. The deficiency of branded hotels with higher capacity indicates a hotel industry that is fragmented without outlook in order to be consolidated, which points out that the role of the state in attracting foreign investments in hospitality should be increased so that we can fill out the deficiency of branded hotels.

References : Avramoski M., (2002), Hospitality , FTU Ohrid, R.of Macedonia. Avramoski M., (2002), Economics and Organization of tourism, FTU Ohrid , R. of Macedonia. Ackoska M., (2009), Tourism and economic development of Republic of Macedonia, Degama, Economic Institute Skopje, R. of Macedonia. Statistic Year Books of R. of Macedonia from 2004, 2005, 2006, 2007, 2008, 2009,2010 and 2011. Galii V., Ivanovi S., Lupi M., (2005), Hotel selling and front office activities, Faculty of tourism and hospitality management ,Opatija, Croatia.