Dead Zones Squeeze Life Out of Bulgarian Resorts

By Tatyana Dimitrova

SOFIA, Bulgaria, April 19, 2006 (ENS) - At Bulgaria's Sunny Beach and Golden Sands resorts on the popular Black Sea coast, the air is filled with the sounds of construction.

Each of these resorts, increasingly popular with foreigners on the lookout for second homes, looks like a boomtown.

But the appearance of prosperity is deceptive. Analysts forecast that many of the shiny new complexes now springing up almost weekly will face demolition within a few years, as owners find their hotels and apartment buildings are lying empty and losing money.

And Bulgaria, they say, could end up repeating the experience of Spain's overdeveloped Costa del Sol a decade and a half ago.

Bulgaria's tourist industry has undergone a real renaissance in the last decade, bringing more and more foreign visitors to the country each year, most them from European Union countries.

One spin-off has been a sharp increase in the construction of resorts, which has led to their capacity trebling in the course of 10 years.

Golden Sands

Golden Sands, Bulgaria is on the northern Black Sea coast, not far from the Romanian border. (Photo courtesy Balkan Holidays)
But not all of the rapid development has been viable or well planned. Lax state control and imperfect legislation have resulted in massive overbuilding on the Black Sea coast, and recently also in mountain ski resorts.

While much effort has gone into the building of hotels, restaurants and other tourist buildings, little care has been taken of the urban infrastructure or the remaining green spaces.

The gloomy precedent of Spain's Costa del Sol is increasingly spoken about as a warning of what can happen to a tourist industry if it is allowed to develop with no controls. Wholesale construction of densely packed highrises all along the Costa del Sol in the 1960s and '70s resulted in a flight of better-off visitors to less "spoiled" resorts, leaving hoteliers in charge of empty buildings a phenomenon known as "dead zones".

At the same time, the lack of green space in overcrowded Spanish resorts led to calls for buildings in the "dead zones" to be demolished so as to open up these areas again. The result was a government backed eight year plan to recreate green areas in resorts through selective demolition.

Bulgarian experts fear this same wasteful scenario could become more and more applicable to their own country.

For now, entrepreneurs, quick to ignore environmental problems and lured by real-estate price rises of 10 to 15 percent annually, have been building at a frantic rate to feed the appetites of foreign buyers.

But tourist agents forecast that the boom could end in bust.

Real estate agents say "dead zones" empty of the tourists who were supposed to occupy them - are already becoming more and more obvious in Bulgarian resorts. They have appeared in several of the most up-market locations such as Sunny Beach, Golden Sands and Bansko, as supply exceeds demand.

Alex Bebov, co-manager of the Bulgarian-British Fund for Real Estate Investments in Bulgaria, says demolition is inevitable for some of these hotels, although he hopes that they will be replaced by more attractive buildings and also more space and green areas.

Bebov says "dead zones" are especially obvious in areas "far from the sea, near roads, or which are polluted and noisy." He predicts that more and more apartments will remain unoccupied in these areas as they become more densely built up.

Naturally, those involved in the direct management of these resorts are keen to downplay the extent of the problem.

Blagoy Ragin, chair of the Hotel Owners' Association, rejects talk of bad planning, insisting that problems connected with over-dense construction can be solved through some minor touches.

"We are planning a large scale campaign to introduce more greenery to resorts in the spring," he said.

Sunny Beach

The resort town of Sunny Beach, Bulgaria is on the Black Sea coast. (Photo courtesy Sunny Beach Travel)
But the facts speak for themselves. Overbuilding has already led to the supply of hotel beds outstripping demand by a worrying margin in parts of the country.

Rumen Draganov, chair of the Tourism Council in Sofia, says 364,000 beds are currently empty in Bulgarian hotels, forcing about 100,000 staff who are supposed to work there to stay at home.

"What Bulgaria is developing is not a tourist but a construction industry," he said.

Donka Sokolova, chair of the Bulgarian Tour Agencies Association, says that officially, Bulgaria 's functioning hotels are contracted with tour operators to be filled to capacity this summer. However, she adds that this 100 percent occupation rate occurs only during the high season, which is in fact getting shorter. Many German tourists who used to come in April, she says, have cancelled their visits because of the construction work that continues throughout the spring.

Tourism experts and environmentalists admit that it is difficult to define the exact dimensions of the overdevelopment problem in Bulgaria, owing to the lack of hard statistics.

Ludmil Ikonomov, director of the Ecological Modernisation Institute, an environmental organization, says it is impossible to predict with scientific accuracy when the life of an overbuilt resort will fail and hotel owners will be forced to demolish their buildings.

But one revealing fact is that more than 200 hotels are now on the market in Bulgaria, having been put up for sale immediately after completion. One reason for this may be that owners are worrying about whether they will ever make a profit from their establishments.

Elena Ivanova, who chairs a council of local businesspeople in Sunny Beach, admits that many investors have been short sighted.

"For years experts were warning of the dangers of excessive building of hotels," she said. "But Bulgarians don't believe in prognosis. They want to test the effects of thoughtless investments!"

Meanwhile, at Sunny Beach the building goes on. Fifteen hotels are under construction, all in the densest area of the resort which is already covered in tall buildings. Ivanova says the municipality has also issued 70 permits for new developments.


Hotel under construction in Sunny Beach, 2004 (Photo courtesy Don Sinclair)
The problem is not limited to the coast, either. In Bansko, a popular ski resort, deputy mayor Ivailo Ruhov says the municipality has issued 668 building permits in the last two years alone, 465 of which were for new hotels.

Aside from the fact that construction on such a massive scale will destroy the charm of this once sleepy small town, overdevelopment in Bansko has also already resulted in many empty beds in hotels and apartment buildings.

But Ruhov says the town council has no plans to stop construction as yet. "We have no legitimate reasons to refuse construction permits to investors who have a perfect file of documents and a desire to invest their money in this municipality," he said.

Draganov, of the Tourism Council in Sofia, says people who build hotels "don't need to be blamed they need support."

He fears that Bulgaria has already lost many tourists who expect a little greenery when they go on vacation, as well as a degree of tranquillity. This latter is often in short supply, especially as the authorities often do not even tarmac the streets around new buildings.

"To get these visitors back we need infrastructure and regulations," said Draganov.

Dimitar Hadjinikolov, a professor of tourism and a former deputy minister, says Bulgaria has been slow in appreciating the environmental impact of tourism.

"The tourist product is a combination of buildings and environment," he said. "So when the whole territory is full of buildings the quality and the prices are much lower."

If profits slide, he continued, hotel owners may have no option but to destroy the existing buildings and replace them with different products, as happened in Spain.

"Those who have invested should think in advance because there is no mercy in the market," added Hadjinikolov. He fears that many of the investors in new resort apartments face either bankruptcy or the prospect of never recouping the cost of their original investments.

While some of those involved in the business believe the government must develop and apply better control mechanisms, others maintain that natural economic laws will sort out the industry's problems.

Parliament certainly seems in no hurry to act. For more than three years, deputies have delayed adopting a law on the Black Sea area which would impose better environmental and planning standards on developers.

In the meantime, the phenomenon of "dead zones" threatens to increase its stranglehold on the country's coastal and mountain resorts.

{Published in cooperation with the Institute for War and Peace Reporting (IWPR). Tatyana Dimitrova is a journalist with Darik Radio in Sofia and a contributor to Balkan Insight, BIRN's online publication.}