Proposals for Investors

Proposals for Investors Swisscontact Ukraine Project: Resort Town of Khmelnyk *** Development of Khmelnyk Resort as International Tourist Spa and Balneological Centre *** Assignment of the Senior Expert Corps Member of Swisscontact Albert Bugnon, Fribourg, Switzerland *** Khmelnyk, September/October 2007 Advice to the Reader This report is the result of the assignment of the expert of SEC-Swisscontact according to the letters of understanding between SEC/Swisscontact and EnergoRem Service Ltd. from June 6, 2007 Please read the whole report without preconceived ideas. The methodology of the work was to use a simple and direct language to explain the realities of a lasting tourism, as an important branch of the international business, also taking into account a global vision of the problems of tourism of the European level. 1. Generalities Tourism is a branch of economy, but its principal component is human beings. The human beings have to be the central point of preoccupation of people and companies who are active in the field of tourism as well as private and public organizations. Tourism is a very important complex activity that consists of thousand various components that do not seem to be connected. The politicians on local, regional as well as national levels have to commit themselves with willingness to the development of tourism, with acts and not only with speeches and reports. 2. Tourism: The European Standards 2.1 The European Tourist Generally, when Europeans are traveling, they want to have local conditions and tourist services that are similar or better than at home. The Europeans: · travel much · have many holidays, several times per year · make several kinds of sport · like quality service · have experience of traveling in different countries They have the opportunity to compare differentcountries, towns, resorts etc. They like to discover something new, unconventional, they like history, cultural cities and monuments, but always want to get good services that correspond to the category. European tourists like cleanness, punctuality, nice atmosphere, when they stay for holiday or cure. 2.2. Hotels Hotels are classified in five categories, from 1 to 5 stars. The minimal comfort for 1 star hotels is to have a toilet and bath/shower in the room. The hotels have at least a restaurant, a bar or a lobby bar. For hotels of 3 and more stars there are a saloon, a TV room, play rooms, hairdress room, laundry services, internet connection, direct telephone, etc. Hotels of all categories provide basic services as change of bed sheets and towel each day or each two days. Hotels in thermal and spa resorts have aside treatment rooms, beauty institute, swimming-pool (30-33 degrees), whirlpool, leisure centre, park and garden, game rooms. Wellness hotels have spa, sport and fitness programs, sauna, hammam, solarium, beauty farm , steam bathes etc. 2.3. Food Generally towns and resorts have restaurants, hotels with restaurants, bars, cafes, fast food and tearooms. Hotels and restaurants usually serve international cuisine, but at the same time authentic national, regional and local specialities as well. The peculiarities of west European food served in tourist resorts are: top quality of products according to the season freshness lightness variety of meals breakfast buffet menu a la carte dishes etc. As beverages Europeans like mineral water, white and red wine during the meals. For afternoon – tea or coffee with pastry, cake or cookies are served. 2.4. Resorts The European thermal and spa resorts are generally small towns, holiday resorts such as mountain holiday resorts or towns of middle importance. All the resorts are good organized, have a resort administration, an efficient tourist and information organization (tourist office, open 7/7), quiet and nice atmosphere, regular cultural events, beautiful flower decorations, clean streets, parks and squares, spa centers/parks (Kurhaus) with concert halls, restaurants and bars, a mineral water drinkhall, eventually casino etc. In the surrounding there is an intact nature, clean air, possibility to walk or go by bicycle, horse riding, mountain biking, golf coursesetc. 2.5. Service In the main tourist and spa resorts, the staff has to be professional, educated by special schools or universities. Generally services are provided by people who speak different languages, in accordance with the main origin of the clients. Europeans like know-how, politeness, kindness and smile. It is recommended to read some information and literature about spa resorts in West Europe or, better, to visit them. 3. Khmelnyk: Description of the Resort 3.1 What ist Khmelnyk? Khmelnyk is situated in Vinnitsa Region (central part of Ukraine), about 320 km west from Kiev. Khmelnyk is a city of regional importance, an administrative center of the district and a famous spa, that was recognized asa resort of state importance in 1970. By the act № 1391 from 15, December, 1997, it was added to the list of population centers which are considered to be resorts. Radon water was discovered by scientists in 1934. Judging by its medical care, Khmelnyk is a unique resort. It’s better than the similar resorts in Georgia (Zhaltubo), Russia (Bilokuriha).There are no such resorts in Europe. The main medicinal factor is radon mineral water which appears in the process of circulation in the granite massifs enriching itself with radon. The local climate conditions are favourable for an organism. The level of moisture corresponds to hygiene and sanitary conditions. The environment influences a person beneficially: woods and groves, gardens and squares, the South Bug, lakes and ponds. The air in the woodland is rich in phytoncides, turpentine vapor, fragrance of wood herbs which influence a person in any time of the year. The reserves of radon mineral water allow to cure simultaneously more than 5500 patients. Another medicinal factor that is becoming more and more important for the development of the resort is peat mud from Viytivetskiy deposit. According to the results of the research conducted in 2000-2001 sanitary-bacteriologicaland physicochemical rates show that peat mud can be used by sanatorium and spa institutions for the treatment of the patients. 3.2 Khmelnyk as Medical-Balneological Centre. Kmelnyk has 8 medicinal health-improving institutes (sanatoria) with a total capacity about 3200 beds. At the resort the following diseases can be cured: · musculoskeletal system · cardiovascular system · nervous system · respiratory organs · female disorders · diseases of male genital organs · diseases of the skin · diseases of endocrine system Altogether 58 diseases are treated at the resort. The efficiency of the sanatorium and spa treatment of the patients is approximately 98%. 3.3 Khmelnyk as a Tourist Resort In Khmelnyk there are 11 restaurants, various small hotels with a total of about 20 rooms, several cafes, bars and one night club. Situated at 250-285 meters above sea level, Khmelnyk has parks, forest, rivers and lakes, several churches, the rest of an ancient castle, various archeological and historic places of interest. 3.4 Problems of Resort Development There are a number of problems that prevent from the further development of Khmelnyk as a unique spa of the radon therapy and recreation. We can distinguish the following interrelated problems: · there are no enough investments for the development of the resort; · there is a low level of investments in the infrastructure; as a result of it, roads, housing and communal services, communications are in bad condition; · lack of modern technologies of management and marketing; · lack of modern information technologies. The urgent problems that are to be solved in near future is a complete overhaul of a great part of beds, reconstruction and renewal of the spa and refitting a part of the diagnostic equipment. To reach the European standards of thermal and spa resorts, Khmelnyk needs large investments in additional equipment to be able to offer the clients of the sanatoriums the best conditions for cure, rest, health and fitness holidays. 4. Khmelnyk as International Tourist and Spa Balneological Centre “Khmelnyk 2008-2020” Introduction to a Possible Way of Development 4.1 General Remarks As there are people who have the willingness to develop Khmelnuyk as an international balneological centre, the coming period (2008-2020) could be an important turning point for the future of the town. However, that will need a real effort of the responsible people, public or private, to develop a global concept of development that takes into account material, financial and political realities. 4.2 What Kind of Development? 4.2.1. Holiday Tourism Khmelnyk could never be a purely holiday tourist resort, because there are no · Sea · Mountains · Very interesting city, monuments, historical places · Special sport equipment, such as 12 or 18 holes golf courses, for example · Long hotel traditions, etc. Of course, it is not to be taken completely negative, but it is necessary to recognize that Khmelnyk cannot claim to become a place for holidays. At best the town could be a one day excursion place. It could be wrong to let believe somebody that, with some various equipment, Khmelnyk could become an interesting holiday tourist centre. For holidays, please do not expect that Khmelnyk will become a good place on the international market. Nowadays the competition between tourist countries and destinations is enormous ( see the number of low cost flight companies ). 4.2.2. Wellness Tourism Wellness tourism is something else. Population of the most developed countries, regions with strong developed industries and services become more and more light health problems. They are stressed and tired, suffer from back and other organs, but they are not really ill. They need, first of all, rest, change of horizon, to be able to look after themselves and think about own well-being. In the same spirit, women want to have a beauty cure for body, face, hair, hands and feet. According to the good reputation of Khmelnyk as unique medical care resort, wellness tourism could be a real CHANCE for the city. But in order to be able to reach the market of wellness tourism, there are many strict conditions to fill (see chapter 2), for example, indoor and outdoor swimming pools with warm water. For the moment, Khmelnyk does not possess the appropriate wellness hotels and equipment. To have wellness holidays in a good equipped wellness hotel bring beneficial effects for body and soul. PROPOSAL In the town there are various unoccupied buildings, old sanatoriums (like “Radon”, for example) and ground surface. One or several such buildings could be reconstructed as wellness and spa hotels with all the appropriate equipment (see chapter 2.2) Wellness hotels need not only rooms with two beds, but with rooms for families as well. A wellness hotel could be built in the city park as well. Wellness hotels could be, in the same time, congress and meeting hotels for scientific or medical congresses. 4.2.3 Health and Balneological “Tourism” Khmelnyk is well-known as a successful health and balneological centre, but principally in Ukraine and Russia, or from Ukrainians that live abroad. The success of Khmelnyk as a health resort results from the efficiency of the sanatorium and spa treatment of the patients. The majority of the sanatoria are equipped with the best and modern medical technologies. However most of them need renovation of buildings, rooms and services. PROPOSAL (in general) To be able to accommodate clients from abroad, sanatoria need a regular renovation of the buildings and equipment that are to be always “up to date” All sanatoria need to present a nice and cheerful atmosphere, a friendly welcome of the clients. They should have people in the staff who speak foreign languages (English, German). They need an information leaflets in various languages as well, with information about all services that are offered. All sanatoria have nearly similar treatments, but they are different in their additional equipment. But all sanatoria should have more attractive equipment as, for example, an outdoor swimming pool, sauna, sport and fitness rooms, playrooms, park and garden, etc. In few of the sanatoria a lobby, corridors are too dark, they should receive more light and colours, be brighter. Do not forget that most of the clients are ill. A pleasant atmosphere could be an additional treatment! But, generally, the treatments in all sanatoria are of high quality, efficient. The treating personnel is conscientious and nice. 4.2.4 Spontaneous Proposals It would be nice to have rich imagination for a further development of the resort. For example: · Production and sale of mineral water in bottles with the name “Khmelnyk” as a mark · Creation of a line of cosmetic products that are produced in Khmelnyk and have some interesting name as for example “Beauty of Khmelnyk” · Creation of special souvenirs that present Khmelnyk, etc. 5. Infrastructure To be able to present and to promote a pleasant resort, Khmelnyk needs various kinds of infrastructure, but first of all, the town has to be nice and attractive (see ch.2.4) 5.1. Public Infrastructure The town needs: · Clean streets · A pleasant city park · A good lighting of streets · Efficient treatment of rubbish · Flower decorations on the squares · Roads and street pavement · Good signs on the roads that go to Khmelnyk · Signs of the public buildings and places of interest About signs, all information has to be given in English as well. In the area of the town there are so many nice places, like rivers, parks, lakes, woods, groves, etc. But actually they are generally in a quite bad condition. PROPOSAL With some imagination, ideas and much work, all these places could be really attractive for the visitors as well as for the population. But all these places have to be completely renovated according to the newest models. Responsible: municipality of Khmelnyk 5.2 Resort Infrastructure The resort has to propose various kinds of infrastructure to the guests. First of all, in the central park, Khmelnyk needs a visitor centre like the “Kurhaus” from the European spa resorts. PROPOSAL The “Kurhaus” or “spa house” (service centre for guests) is a building with: · information office for visitors · welcome rooms for clients of the sanatorium · restaurant, bar, café · concert hall · drinkhall for mineral water · shop, · place for entertainment etc. It could be the centre of the social life of the clients of the resort, a nice, secure place to go out and meet people. A very negative point for Khmelnyk is the Palace of Count Ksido and all the area of the ancient castle. The palace is nowadays in so bad condition that it is a shame for the city of Khmelnyk. The palace and the rest of the ancient castle have to be considered as historical monument and treated as such. A historical monument is a witness of the past and a place of interest for the future generations. Now, not only the Ksido Palace has tobe planned and renovated but the whole area of ancient castle including the tower. PROPOSAL Proposal №1 The Ksido Palace could become a first-class hotel (very important for the tourist development of the resort) and the whole hill as a resort park. PROPOSAL №2 The Ksido Palace could become the new and needed “Kurhaus” of the resort. “Kurhaus” or service centre for guests could be built inside the city park and join a wellness hotel. Responsible for the resort infrastructure: Resort Management Council and municipality of Khmelnyk. 5.3 Sport and Fitness Infrastructure A modern wellness and spa resort must be able to offer various sport opportunities and installation for the clients. PROPOSAL Outside the town and in the forest, there must be: · walking path · Nordic-walking path · Cycling way · Tennis court · Special fitness course · Eventually golf course, etc. Responsible: Resort Management Council (see below). 6. Destination Management Khmelnyk with all its peculiarities as a health, spa and balneological resort has to be considered as a destination of wellness and health tourism resort and to be organized and promoted as such. 6.1. Management Destination management means to create a strong organization that could be named Resort Management Council (RMC) The Resort Management Council must be formed by all interested and responsible public and private organizations of the resort development. For example, representatives from: · Town authorities (1) · City administration (1) · Regional authority (1) · Association of sanatoria (2-3) · Shops (1) · Industry (1) · Banks (1) · Hotels and restaurants (1) · Cultural life (1) · Scientist (1) · Real estate specialist (1), etc. One of them is the president of the council. In any case the Resort Management Council must be: · Political neutral · Economic neutral · A non-profit organization It has to work for the major interest of the resort. It must be the unique responsible organization that manages the resort. The Resort Management Council could be successfully created on the basis of the present Resort Committee. 6.2 Organization For practical reasons inside the management council, there must be an Executive Committee, formed by a selection of 3-4 members of the council. The Executive Committee will be managed by the president of the council. However the effective work will be carried out by a professional staff (Executive Staff) that consists of: · The Resort Director · Assistant · Infrastructure specialist · Finance specialist · Secretaries, etc. This staff could form the Khmelnyk Spa and Tourism Office All members of the executive staff are very well formed people in economy development and tourism. They must speak several languages. They should receive the right salary. This system of unique tourism organization is tested in many countries and resorts, it offers the best chance of success to the resort. 6.3 Task of the RMC · · · · · · · · · · · · organization of the resort improvement of the infrastructure improvement of the offer negotiations with the authorities of all levels negotiations with the investors coordination of all activities regarding the resort collaboration with local and regional government regarding the development of the resort appointment of the Executive Committee appointment of the executive staff control of the activities of the executive staff fund raising for the executive staff and functioning of the council finance control of the executive staff The Resort Management Council meets each month or each two months. The Executive Committee meets each week or two weeks, together with the director of the Executive staff. 6.4 Task of the Executive Staff Execution of all decisions taken by the Resort Management Council, such as Management of the staff Organization of a tourist office/kurhaus (service centre for guests) Spreading of information about the resort Production of promotional documents like - brochure with general information about Khmelnyk - organization of a good internet presentation of the resort - separate brochure of all sanatoria · Coordination of the offer of all partners (sanatoria, restaurants, hotel etc.) · Public relations activities (media) · Cooperation with the administration of the town for the development of the infrastructure, etc. · Execution of promotion activities · · · · PROPOSAL Advertisement and articles about Khmelnyk in the magazines and newspapers that are given to passengers by Ukrainian international airlines and other companies that fly to Ukraine. 7. Promotion The question is how to promote Khmelnyk as a very important spa, wellness an health centre on the international market in the situation of strong competition. The main aim of the promotion is to make Khmelnyk well-known in Europe and in the world. To make promotion for a resort it is necessary to have a person who is a good tourism specialist with experience on the international market. As already said (chapter 1) tourism is a very complex activity. People who are responsible for the promotion have to be able to manage this complexity. 7.1 Main Components of Promotion The resort needs a strong image corresponding to the main offer of it: spa, wellness and health centers. 7.1.1 Identification of the Resort Corporate identity need for the resort: A unique NAME A strong MARK An Image that can be easily identified An efficient SLOGAN 7.1.2 Advertising Leaflets They have to be attractive, to present exactly the kind of the resort. They need to be complete, give precise information about treatments that are provided. They have to contain pleasant pictures, that correspond to the reality.Even more, they have to be written in the language of market country. 7.1.3 Planning of Promotion Well, the resort is not absolutely ready for an international promotion. But in health tourism as well as in holiday tourism good promotional information should help to awaken interest and increase demand. A bigger demand is a good incentive for improvement of the infrastructure and new investments. Regarding the project “Khmelnyk 2008-2020”, good information and promotion of the resort have to start in the near future. 7.1.4 Professional Tourist Promotion There are various networks for tourist resort in the world. For Khmelnyk it will be important to find out the network for health tourism, for example, special international fairs and exibitions for health and wellness tourism, take part and present therea show-case. It is necessary to make advertising in specialized magazines for medicine, chemist’s shops and drugstores, wellness etc. 7.1.5 Quality Quality of services is the best publicity. Satisfied clients bring good experience out, speak about it and make promotion for the resort (promotion from mouth to ear). Watch out of negative experience! PROPOSAL Each client who leaves Khmelnyk after stay for treatment should receive a small gift or a souvenir as for example a historical booklet with pictures or something other. 7.1.6 Khmelnyk People “The largest passivity is to ignore what we possess” It is important for Khmelnyk people of each level to be aware of the importance of the resort as a great socioeconomic potential. All people involved in the resort development have to speak around with enthusiasm about the position of Khmelnuk on the market of health tourism and to lobby regional and national authorities. My wish is not to change the mentality of people, but I hope that their behavior will become more and more positive, welcoming and friendly. 8. Investments An important task of the Resort Management Council (RMC) will be fund raising and search of investors. The demand is bigger as the offer, that’s why it will be necessary to develop the capacity of the resort with new sanatoria and wellness hotels. The search of investments demands form the RMC strong work, contacts and presentation of the resort in many institutions such as banks and firms, cooperation institutions, international chambers of commerce, central government, embassies, etc. 9. Conclusions Khmelnyk 2008-2020 – a Big Challenge The chances for Khmelnyk to become a successful and efficient international health, spa and wellness centre are great. For the coming years the main words will be: · Planning · Improvement · Investment · Organization · Information · Promotion · Imagination · · Quality Achievement and Necessity to have faith in the future I only hope that all the above words will be transformed into acts in a reasonable time and that the resort will be much more known in the world: Khmelnyk is worth of it. *** P.S. I wanted to send postcards in Switzerland to show Khmelnyk, but I could not find postcards in the town… Thanks It was a real pleasure for me to discover the region and the resort of Khmelnyk and, particularly, to make my modest contribution to the development of the resort. For my work I received much important information from the “client” of Swisscontact, Andrey Martynyuk, his colleagues – Yuriy Kostyuk, Valeriy Redchik and Anatoliy Chepenko. All directors of the sanatoria helped me in my work as well, especially Viktor Pikush and Petro Dumin. And a special thanks to “my” translator Yulia Prysyazhnyuk for her help and efficient work. My work will not be possible without the mayor of the city – Vladimir Melnychuk, his assistant – Anatoliy Anatolievich Moroz, Thanks a lot to all. Appendix Priorities in the optional realization of the project As written in the chapter 4.1, the development of the resort needs a global concept that takes into account market, financial and political realities. However, it is possible to put priorities for realization of various projects. Priority 1 public infrastructure resort management council first wellness hotel Priority 2 renovation of sanatoria service centre for guests executive committee beginning of promotion Priority 3 executive staff palace Ksido additional equipment of the sanatoria Priority 4 sport equipment production and sale of mineral water production and sale of cosmetic products - - - Albert Bugnon, SEC/Swisscontact rfi@bugnona.ch albert@bugnona.ch th Khmelnyk, 28 of September, 2007