skillsnet European Centre for the Development of Vocational

skillsnet European Centre for the Development of Vocational Training Trends and Skill Needs in The tourism Sector International Workshop Bozidar Šišević Podgorica, 25. 04. 2004.

Background Montenegro is a small Mediterranean country. The length of the coastline is 293. 5 km, of which 117 km are beaches. Huge variety: high rugged mountains and deep ravines alternate with expansive plains and a fascinating coast. Ø Ø Ø Ø Ø Surface Population per km 2 % population growth GDP in millions of Euro GDP per capita (Euro) % Annual inflation Number of employed Number of unemployed Rate of unemployed 13. 812 km 2 617. 740 44, 72 4, 5% (2003) 1. 328 (2003 – estimate) 2. 150 (2003 – estimate) Approximately 7, 8% (2003) 175. 000 (2002 – LFS) 70. 000 (2002 – LFS and reg. ) 20% (LFS – estimate) 30% (estimate – registered)

Structure of the economy – importance of the tourism sector in the economy in 2003 (according to 2003 – Travel and Tourisms – Economic impact data) n n n 190, 9 mil. Euros – total income (direct and indirect effect), and it makes 14, 4% of GDP. 102, 8 mil. Euros – total income (direct effect) Total employment is 22. 077 or 14, 5% of total employed (direct and indirect effect). Total employment is 11. 892 or 7, 8% (direct effect only) Capital investment is 37, 8 mil. Euro (14, 3% of total investment) Government expenditures make 12, 5 mil. Euro (or 2, 7% share in total Government expenditure).

Main characteristics of tourism sector in Montenegro (estimate is that we are on the 50% of the level before 90 s) Tourism industry in the period 1990 -2000. Ø Total number of beds reduced from 146. 379 to 93. 996 Ø Reduced total number of tourist nights from 10, 8 million to 4, 5 million Ø Number of beds in hotels increased from 22. 400 to 25. 800 Ø Reduced number of nights in hotels from 3, 3 million to 1, 8 million Ø Percentage of filling hotels 19, 5% Ø Average price in hotel in tourist arrangements 25 -45 DEM (polupansion) Overall state of the sector: Ø “Cheap vacation” Ø Hotels ruined (only 2000 to 3000 hotel bads sutisfied interna. standards) Ø Short season (average two months) Ø Domination of domestic guests (85% from Montenegro and Serbia) Ø Less than 10% of foreign tourists from the West (fall from 60% to 10% in hotels) Ø Lost market Ø People untrained Ø Limited investment – enterprises do not have sources to invest in the hotels Ø Privatization is moving slowly and with difficulties Ø No world-famous hotel chains are interested to buy or invest in our hotels Ø Hotel buyers are mostly domestic or Russians Ø Poor infrastructure (roads, water supply, sewage, airports) Ø Big informal sector (private rooms and summerhouses – close to 100. 000 beds)

Training providers A. Schools. n n n Initial training is mostly done in schools – in school workshops. In period 2002 -2003 there were 20. 811 students in VET schools. Out of that in the sector of trade, tourism and catering there were 3. 854 students or 18, 5%. There are 16 VET schools which provide education and training for trade, tourism and catering. Small number of students received additional practical training (onthe-job training).

Shortage of labour and shortage of qualified and competent labour force Characteristics of labour force in tourism Manpower and workforce n There is a shortage of trained and competent workforce of all levels and profiles: Ø Top management, Ø Middle management, Ø Owners in the private sector, Ø Qualified workers – cooks, Ø Tourist guides, Ø Tourist animators, Ø Semi qualified and unqualified workers – maids, servants. n Reasons: Ø Low earnings, Ø Unfavourable working conditions, Ø Seasonal (short) employment.

n A. Problems of training in schools during 90 s: Ø Ø Some (but small number) of schools made a contract with some hotel or restaurant to provide on-the-job training, Ø There was not a system of apprenticeship training, Ø Small influence of business on education and training programmes, Ø Inadequate education and training programmes (small amount of practical training, Ø n Schools did not have basic equipment and materials, Hotels and other tourist institutions invest little in training of their staff. B. Hotels and private employers. Ø There is a small number of organized training programmes Ø Low investment in training

n C. Employment Agency of Montenegro – Training Centers and International cooperation. Ø n n Employment Agency invests in training of the unemployed and employed. Additional training programmes are delivered in schools, hotels and training centres. 1. EU CARDS programme – VET Project Montenegro 2. Chamber of Commerce Coblinc, Germany (equipment for school workshop, teacher training and preparation of training programmes) n 3. Grone school, Libek, Germany n 4. GTZ, Germany n 5. Training Center for workforce in Tourism and Catering in Herceg Novi. Ø Center was established in 2002. Ø Cooperation with Grone school from Libek (Germany) and GTZ

Surveys I Employment needs by the size of company and by municipalities Employers - interwued County. Region. Republic Total One employee Montenegro 9. 749 3. 465 Fm 1 - 5 workers 4. 394 Fm 5 - 10 workers 803 Fm 10 - 50 Over 50 workers 737 ØInterviewed 9. 749 employers ØExpressed employment needs 15. 223 (mostly permanent employment) 350

n II Employment Need Analysis for seasonal workers in tourism and catering. Ø Ø n In March 2004 survey was undertaken within employers who employed more than 10 seasonal workers. Survey undertaken by Employment Agency of Montenegro – Burreau Herceg Novi. In 2003 around 20. 000 seasonal workers were employed in Montenegro alltogather. In 2004, 4. 251 employers in turism and catering with more then 10 emploees ware interwued. Expressed needs for 9450 seasonal workers in the sectors of tourism and catering. Structure of employment needs for seasonal workers in tourism and catering in 2004. • • • 2. 500 waiters and bartenders, 2. 000 assistant workers in restaurants, 1. 500 salesmen, 900 maids, 600 cooks, 500 non-qualified workers, 500 cleaning ladies, 400 attendants, 150 receptionists, 100 confectioners, 100 grill makers, 100 gardeners,

Future perspective – new trends and development Tourism designated as the sector of highest priority n n Master plan about development of tourism in Montenegro until 2020. (prepared by DEG – German Investment and Development Company for Federal Ministry of Economic Operation and Development) Ø The most important document on tourism produced so far Ø Approved by Government in May 2001. Ø All ministries have to take it into consideration Identified potentials for development: Ø The length of the coastline is 293. 5 km, of which 117 km are beautiful beaches, Ø Sandy beaches (very often compared with Majorca) Ø Clear, sparkling sea, Ø Untouched environment, Ø Mild and pleasant climate and sunny weather, Ø Clean mountain lakes and rivers (often compared with Northern Italy and Switzerland) Ø Huge variety: high rugged mountains and deep ravines alternate with expansive plains and a fascinating coast.

Maritime tourism Culture - Nature Cures and health Mountain hiking Congresses and incentives Sport and fun Agro-tourism Target groups Events and adventure Golf Bathing tourists Private lodgings Hotels Fewo Camping

Master Plan -main goals, priorities, principles and reccommenations Ø Tourism – sector designated as a first order priority, Ø Changing structure of the tourist product – increase of quality of tourist product (service), Ø Attracting foreign tourist with higher income and higher purchasing power, Ø Increasing diversity of services – standardization and specialization, Ø 3 to 5 star hotels – main element of increase services, Ø Upgrading of existing and bulding new hotels, Ø Distinctive products, Ø Individualized products, Ø Promoting private initiative.

Short-term, med-term and long-term expetations for development 1. Short-term perspective – next few years to catch up with where we were at the end of 1980 s 2. Master Plan-predictions for 2010. o Estimated rate of growth of income in tourism 10%, o Total income 530, 6 mil. Euro o Total number of beds 225. 000 o Total number of beds in hotels 50. 000 o Total nights 15. 675. 000 o Total increase of employment in 25. 000 (one new hotel bed creates one new job, directly (0, 3) and indirectly (0, 7)) 3. Master plan – predictions for 2020. o Total income 1. 151 mil. Euro o Total number of beds 280. 000 o Total number of beds in hotels 100. 000 o Total nights 25. 850. 000 o Total increase of employment around 50 to 70 000 people, nearly 50% of the total employment.

Master Plan-Development strategy for bedding capacities 1997 2010 2020 Target Statistics. A Estimate. B Hotel Beds % Total 25. 879 100 27, 5 25. 879 10, 1 50. 000 100 L/5***** 240 0, 8 - 240 2. 500 A/4**** 4. 489 17, 3 4, 8 4. 489 1, 8 B/3*** 20. 830 80, 5 22, 2 20. 830 8, 6 C/2** 273 1, 0 - D/1* 47 0, 2 Camping Beds % 22, 2 100. 000 100 5 1, 1 10. 000 10 15. 000 30 6, 7 40. 000 40 20. 000 40 8, 9 40. 000 40 273 12. 500 25 5, 6 10. 000 10 - 47 - - 18. 492 19, 7 18. 492 7, 6 15. 000 6, 7 10. 000 3, 6 Vac. Dwellings 19. 592 20, 8 78. 434 32, 3 50. 000 22, 2 50. 000 17, 9 Other 30. 033 32, 0 30. 033 12, 4 15. 000 6, 7 10. 000 3, 6 90. 090 37, 1 95. 000 42, 2 110. 000 39, 3 242. 928 100 225. 000 100 280. 000 100 Hol. Apart. Total 93. 996 100 35, 7

Master Plan-proposals for Labour force in tourism and catering The following specialists will be needed for the future development: Ø Experts in tourism industry, leisure, marketing Ø Experts in hotel business and vocational training Ø Landscape management and national parks Ø Environment, regional planning and transport Ø Architecture and interior design Ø Building and hotel engineering Ø Supply and waste management Ø Culture and education Ø Economics, labour and social policy Ø Law and administration.