Tourism stagnates despite massive state spending

While the Czech Republic has made an enormous investment in tourism in recent years, the injection of funds has failed to yield positive results, according to a new report.

Photo: Patrycja Cieszkowska, Free Images

Between 2007 and 2013, the Ministry of Regional Development poured at least CZK 49 billion of European Union and state funds into boosting the tourism industry, the Czech News Agency reported on Monday, quoting a report obtained from the Supreme Audit Office.

However, in that time tourism has stagnated or even seen a decline, the audit found.

For its part, the ministry says it cannot be held responsible for the situation; it argues that tourism’s share of gross domestic product has been on the decline for a decade, a trend caused by faster GDP growth.

Radka Burketová, photo: Ministry of Regional Development

Ministry spokeswoman Radka Burketová told the Czech News Agency that in the period in question the tourism industry had merely echoed developments in other sectors and the overall economy.

The Supreme Audit Office investigated the manner in which the ministry fulfills its obligations in the field of tourism and in the provision and accessing of funds from the National Programme of Support for Tourism, the Integrated Operational Programme and four regional operational programmes.

The agency also audited the Southeastern, Southwestern, Northeastern and Central Moravian regional cohesion councils and a dozen selected funding recipients, including CzechTourism, the state agency tasked with the direct promotion of tourism.

Ministry of Regional Development, photo: ČT24

Among other findings, the auditors say that the Ministry of Regional Development lacks sufficient oversight of how much funding has been spent on tourism, and from which particular sources.

The controllers also say the tourism programme, which had no fewer than four different heads in the period in question, has been poorly run.

The spokesman for the Supreme Audit Office, Jaroslav Broža, told Czech Television that the ministry had failed to monitor whether projects were successful and to what extent they were reaching target groups of potential tourists (frequently disadvantaged groups, such as students, families with children, and the elderly). Broža also said that decisions on grant applications were often highly subjective.

Photo: © City of Prague

Among specific examples of dubious spending, the auditors highlighted a grant of almost CZK 1 million to create a rental for electric bicycles and children’s “quads” and the purchase of a minibus for over CZK 2 million to transport seniors to hotels.

The Ministry of Regional Development says it is continually looking for ways to achieve improved coordination of its tourism policy and to make its spending more effective. For this reason, the government in 2013 approved a new plan that includes mechanisms designed to create a more joined-up approach, said spokeswoman Burketová.

The travel industry is a significant sector of the Czech economy, generating around 3 percent of gross domestic product and providing an estimated quarter of a million or more jobs.