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July / August 2016 Newsletter


Another year, another neighbour in turmoil

It wasn’t long ago when our southerly neighbour Greece was the main topic of conversation here in Bulgaria, as well as across Europe. A year on and another neighbour, this time Turkey is all the rage; albeit for different reasons

Bulgaria’s long time love/hate relationship with Turkey is probably not understood by many outside of the region and whilst at the political level things are cordial to the point of being ‘mates again’, that same sentiment may not filter its was down to the masses. Bulgaria over the past years has got on with life and with being a part of the greater Europe, looks west for its future and not over its shoulder to the (south) east. Yet, unreported and without comment amongst Europe’s holidaying media, the educated and the entrepreneurs are noting that Turkey provides the biggest single threat to the Bulgarian economy; yet no-one seems to dare mention the fact.

Leaving aside any political leanings one may have and also leaving aside ones own view of what is happening in modern day Turkey; it’s the perception of people that often counts the most rather than hard facts. Take for example last years soap opera in Greece: for many Europeans, there was enough ‘”happening’” in Greece for them to rule out the thought of the country being their preferred holiday destination. Badly informed journalists had a field day with manufactured stories about there being no cash at the banks and even food in the shops – why let the truth get in the way of a good story? Perception this year has had those same potential holiday makers turning their back on Turkey as its ‘too’ close to Syria and the inflated risk of terrorism’. Perception!  So how does this impact potentially the Bulgarian economy?

Whilst the European media may have their shackles in place on what can and cannot be said about present day Turkey, potential investors have enough information to enable them to make a valid assessment of what is happening at South East Europe’s gateway. Would you risk multi million Euro or dollar investments on the doorstep of a country that is adjacent to a potentially volatile and troublesome neighbour, as far as the perception across Europe is concerned, or would you go to a ‘safe’ location, far away from the refugees, terrorism and attempted military coups?

Investors look for stability not just in the place they are looking to invest but also in the region surrounding it. Its all about perception and whether the facts we have available to us are correct or otherwise we, just as potential investors have, the right to form an opinion the matters to hand and perception will win at the end of the day – rightly or wrongly.

Talking of perception, we admire the bulletin Turkish Airlines sent to its trade partners that things were back to normal following the failed coup attempt in Turkey and which included the comforting note; “to protect the country from all possible threats; maintain all democratic rights and the continuation of all basic rights and freedoms”. Indeed.

Mark Thomas

Managing Director

HRG Bulgaria

Bird strikes

The European Court of Justice has ruled that ‘bird strikes’ do not count as an ‘’extraordinary circumstance’’, the get out of gaol expression that airlines use to avoid paying compensation to passengers.

An estimated 100 million Euros in claims for delays caused by bird strikes are understood to be pending across Europe by claimants who have had their claims stalled by airlines waiting for a court decision to be made.

The airlines will cry foul but when they have to pay out rather than ‘collect’, they always do cry foul.


French absurdity

The Trade Unions at Air France continue to press the ‘self destruct’ button with yet another strike for a week running from the end of July and into August; the peak season for may European leisure travellers. Around 37% of cabin Crew are expected to walk out and some 20% of medium haul flights and 8% of long haul flights will be affected; Sofia flights included.

Air France meanwhile is reporting a 5.2% drop in 2nd Quarter sales for 2016 and some 40 million Euros in losses’ connected to the strike action.

There has to come a point very soon when the French or EU civil servants step in and say ‘”enough is enough’’. The right to strike is a right of all people but strike action should not be the first option but the last option on the table.

Some countries in the region not far from Bulgaria who are currently restricting dissenting voices might show the way to the French and suggest that the protagonists of the strike action follow their remedy for the action and lock the dissenters up.

Another suggestion for the obviously French unions who are more to the extreme left way of thinking is to buy them a one way ticket to North Korea.


What’s in a grade

The French hotel grading system was overhauled in 2012 to bring it in line with how most of the rest of the civilized world grades its hotels i.e. 1- 5 star. Until very recently there were no official 5 star hotels in France as they paid more taxes! In addition to the standard 1 – 5 rating, the French also have a ‘Palace rating’, introduced in 2010 and which sits above the traditional 5 star status. There are around 20 hotels in France with the ‘Palace’ status with the latest hotel to be given the accolade being the Peninsular Paris which is located close to the Arc de Triomphe.

Of course in Bulgaria and especially along the Black Sea there are countless such hotels which would fit the ‘Palace’ criteria…..according to their owners that is.


A brand new problem

Hotel Management Company Marriott has begun construction of its first every property which will comprise of three separate brands. The facility is located in Nashville with the company’s AC Hotels, Springhill Suites and Residence Inn being present.

Mixed use facilities have become quite common in several parts of the world and especially in the Gulf region. Here in Sofia, the ‘about to be built’ Accor operated facility on Hristo Botev will house both a Novotel and an Ibis; both Accor brands but aimed at different market segments.


Gunning for trouble

The frequency of shootings in the USA is reaching the point, or indeed may have already reached the point whereby foreign visitors will think twice whether or not they should visit the country. That is the claim taken from pools conducted within the travel trade in the UK where 55% of industry people stated the USA’s (overly?) relaxed gun controls will lead to people questioning whether to visit.

Incidents where deaths occur seem no longer to be restricted to areas way removed from the tourist trails and two high profile nightclub shootings in Florida have merely emphasized the point.

What is galling to many Europeans is the fact that the USA is quick to issue blanket travel warnings to its citizens regarding travel to Europe with the theme of ‘terrorism’ as the headline maker, yet more people are killed by guns across the USA in circumstances that are questionable and carried out by people who are, to say the least, equally questionable, than there are from all terror related incidents across Europe. A fact that seems to be conveniently overlooked as the message is conveyed for whatever political purpose it is meant to serve.


More and more for Ryanair

The power of airline crew trade unions is such that it appears that no matter what size and shape their crew members morph into, their jobs are sacrosanct. Having seen an American airline crew of what seemed to be retirement age checking into a Frankfurt hotel several years ago the thought sprung to mind of how indeed would many of them would fit down the aisles let alone work in them! Thus an eye catching news story this month was the one whereby Indian air regulator refused to relax its own rules on ‘”overweight” cabin crew and grounded 130 overweight (largely female) cabin crew.

The regulator said that the rules governing the ideal ‘’body mass index ’’ for crew members was drawn upon technical and efficiency grounds. Two years ago Indian airlines were requested to rate their crews as ‘normal’, ‘’overweight’ or ‘obese’ and ensure unfit crew lose weight within 18 months.

The only option for the crews falling foul of the weight limits are to lose weight – quickly, or take voluntary retirement.


Friends or foes

A friend or a threat? That must be the question British Airways shareholders and also BA employees must be thinking on news that Qatar Airways, once considered a rival in the battle to win passengers for long haul flights – a battle that Qatar and fellow Gulf carriers Etihad and Emirates have clearly won – has increased its shareholding in IAG, the Parent Group of BA, to 20% from 15.7%.

Clearly Brexit doesn’t faze the Qatari’s like it does speculative journalists and career employees of the European Union.

How to make a loss into a win

The field of technology has, whether we like it or not. forced itself into every walk of life and the field of travel has not escaped either. Indeed, it could be argued that technology in travel has created a whole new ball game in how we research travel, how we choose travel and how we book travel. It does not stop there; technology allows us all to research or reference things whilst at our destination, from hotel choices to restaurants to places of interest. Technology from our telephone also allows us to call taxis and the great success story of how a supplier of a travel service has applied technology to break down traditional barriers is Uber.

Uber though is far from immune to controversy. Banned in many cities or indeed countries, Bulgaria being one of them, the incumbent suppliers of taxi services will not relinquish their market dominance without a fight.

This fight can take many forms from pure obstruction by the (paid off) authorities in the denying of licences, to strikes and blockades by existing taxi providers. In China. Uber has been receiving a bloody nose for some time with reports that competition from similar domestic technology driven providers such as from Didi Chuxing, has meant that to simply remain in the game in China, Uber was losing 1 billion USD per year. That’s an expensive game to simply ‘”remain’” in. For Uber, the battle became unwinnable and so it has agreed to merge with its Chinese rival although Didi Chuxing will be the dominant party. The deal is reportedly worth 35m USD and so one could reasonably argue that the defeat is hardly a defeat in economic terms!


Cuban first

The first commercial flight for over 50 years between Cuba and the USA will be operated by JetBlue on the 31st August.

The flight will operate from Fort Lauderdale to Santa Clara Abel Santamaria Airport. Other US carriers are slated to commence their own Cuban fights in September.


Birds – a spat in the eye for airlines

To move from having two brands sharing a home to having three is starting to push the boat perhaps a little to far out to sea. Visitors, in many cases, are likely to be left scratching their heads about where they are staying and what they have actually booked.


White House Garb

The Presidential elections in the USA if nothing else are occasionally amusing; the latest howler connected with the race to the White House comes from a United Airlines pilot who called for Hilary Clinton to be ‘hung’. The pilot is actually a Republican Member of the West Virginia House of Delegates which prompted rival organization ‘The Democratic Coalition Against Trump’ to call for a boycott of all United Airlines flights. The offending pilot has since been suspended although his remarks seem to have been taken out of context, but that only spoils the comedy.



Roads to avoid

It’s not a fact that the macho Bulgarian male (or indeed female) will openly admit to, but they are the worst drivers in Europe!  In 2015, there were 7296 road accidents in the country with 680 deaths, giving the country the worst safety record per head of population in Europe. Indeed, with the population likely to be less than official figures actually state, the performance is even worse than first impressions!

As we are in the midst of a very busy summer season, anyone wishing to reduce their chances of having an accident should avoid the rod between Bourgas and Varna which has the worst record with 864 accidents, 22 deaths and 198 injured since 2013. Following along in the worst list comes the roads between Rousse and Byala, Plovdiv and Assenovgrad and Kazanluk and Stara Zagora.

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