The Bucharest-Ilfov region is using EU funds to develop its tourism infrastructure and improve its attractiveness to business travellers in the country's capital. EurActiv Romania reports. How does a country like Romania spend the money that it receives from the European Union through the structural funds? One concrete example can be found in a business district of Bucharest, where €1.8 million of EU funds are helping to pay for the extension and modernisation of a hotel. The owner of the Criss Hotel is Radu Antonie. His project is the first tourism-related investment to be approved for co-financing under the European Regional Development Fund (ERDF) in the Bucharest-Ilfov region, which is the principal hub of economic activity in Romania and has over 2.5 million inhabitants.
The project, which is due to cost around €4 million in total, involves renovating and modernising the entire hotel and increasing the capacity by adding an additional 77 guest rooms, as well as meeting rooms, a new restaurant and a fitness room. The extension and renovation of a private hotel with public money may sound surprising at first. But Antonie is confident that his hotel is in the right location to invest in new tourism infrastructure. "Very close to the hotel, there is a well-developed business park with hundreds of companies' offices and commercial spaces. People travelling on business want to stay close to their destination place, not to visit the city," he explained. Demand for rooms remains steady, even amid the current economic crisis. "Most of the time, the hotel is full, with clients even opting to stay whilst construction work is going on," the owner told EurActiv Romania. A Spanish company is also benefiting from the project, as it is responsible for the construction work currently under way. "The company is extremely serious, they have experience in Spain and they came from that country with a different perspective of doing business," said Antonie.
Conditions
According to Dan Nicula, who heads the Regional Development Agency in Bucharest-Ilfov, applicants must fulfil a number of conditions before their projects can be approved for financial support. In the case of the Criss Hotel, the decision to co-finance the project was only made after the relevant criteria had been met. "At first, the project was rejected but the manager has followed all the recommendations he received from the Agency so he applied again with a better version of the project," said Nicula. After the construction is finished, the project will lead to the creation 30 additional long-term jobs at the hotel. There should also be significant indirect benefits to the economy of the whole business district, as the hotel will make the area more attractive to businesspeople and investors. When asked about the economic and social impacts of the project, Nicula said these could only be properly assessed in the longer term – "a few years after the investment is finished".
Tourism: Important for Romania's growth
From the medieval towns of Transylvania to the beach resorts of the Black Sea coast, Romania is certainly not lacking destinations to tempt tourists. But Romania felt it was lacking facilities for business travellers rather than families. In the 21st century, business travellers expect to find good facilities wherever they go, including high-quality hotels with every convenience, from en-suite bathrooms to wireless Internet access. Any region that lacks such facilities will find it very difficult to compete for business and attract inward investment in the globalised economy. Recognising the importance of tourism for economic growth, the Romanian government chose 'sustainable development and promotion of tourism' as one of six priority axes for its Regional Operational Programme (ROP). The EU has promised to give €3.7 billion to this Programme via the European Regional Development Fund (ERDF) during the current period (2007-2013). Under the seven-year plan, a total of €559 million is reserved for 'sustainable development and promotion of tourism' throughout Romania. This money should be used, for example, to improve the quality of accommodation and tourist infrastructure, which is seen as a way to facilitate job creation and sustainable economic growth. For the purposes of the Regional Operational Programme, the country is divided into eight regions. In each region there is a Regional Development Agency, which examines proposals for projects, communicates with applicants and makes decisions on how and where the money should be spent. During the current period (2007-2013), Romania is expected to spend a total of €19.7 billion of EU money via the various structural funds. Most of this money should be used for projects that will contribute to economic growth and job creation, in line with the so-called Lisbon objectives. The main priority areas include: improving transport infrastructure, investing in research and innovation, education and training, support for small and medium-sized enterprises (SMEs), the social inclusion of disadvantaged groups, improving the environment, and promoting energy efficiency and renewable energy.
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