Scholarly article on topic 'The Changes and Innovation as a Factor of Competitiveness of the Tourist Offer (The Case of Ohrid)'

The Changes and Innovation as a Factor of Competitiveness of the Tourist Offer (The Case of Ohrid) Academic research paper on "Economics and business"

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{"tourist offer" / change / innovation / "tourism destination" / "resistance to change"}

Abstract of research paper on Economics and business, author of scientific article — Lidija Simonceska

Abstract In the era of modern living, there is no country in the world which is not included in the global tourist flows. All of them in greater or lesser extent, create and offer tourist product to domestic or foreign tourists. Their basic challenge-rapid changes in the social environment and especially the development of urbanization and mass media, it makes the tourism cultural and civilizational need of today's man and opens wide horizons for their tourist development. Harnessing the value of each tourist destination is one of the priorities of its owners. Within the dynamic environment, the holders of the tourist offer can be used more strategies, in which change and innovation have a special power. The aim of this paper is to explore the essence of change and innovation in tourism and areas of innovation in tourism industry. According to the fact that changes and innovations cause resistance for the people who should implement them, here will be presented some important ways to overcome that resistance.

Academic research paper on topic "The Changes and Innovation as a Factor of Competitiveness of the Tourist Offer (The Case of Ohrid)"

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Procedia - Social and Behavioral Sciences 44 (2012) 32 - 43

Service Sector in Terms of Changing Environment

The changes and innovation as a factor of competitiveness of the tourist offer (the case of Ohrid)

Ph. D. Lidija Simonceskaa*

aProffesor, University "St. Kliment Ohridski", Bitola, R. Macedonia, Faculty of tourism and hospitality, Ohrid 6000, R. Macedonia


In the era of modern living, there is no country in the world which is not included in the global tourist flows. All of them in greater or lesser extent, create and offer tourist product to domestic or foreign tourists. Their basic challenge -rapid changes in the social environment and especially the development of urbanization and mass media, it makes the tourism cultural and civilizational need of today's man and opens wide horizons for their tourist development.

Harnessing the value of each tourist destination is one of the priorities of its owners. Within the dynamic environment, the holders of the tourist offer can be used more strategies, in which change and innovation have a special power. The aim of this paper is to explore the essence of change and innovation in tourism and areas of innovation in tourism industry. According to the fact that changes and innovations cause resistance for the people who should implement them,, here will be presented some important ways to overcome that resistance.

© 20122 Publlshed bb Elsevier IB .V. Selection an d/or peer review und er responsibility of the F acuity of Tourism and Hospitality

Key words: tourist offer, change, innovation, tourism destination, resistance to change

Lidija Simonceska Tel. +38976355503, E-mail address:

1877-0428 © 2012 Published by Elsevier B.V. Selection and/or peer review under responsibility of the Faculty of Tourism and Hospitality doi:10.1016/j.sbspro.2012.05.002


Tourism is one of the most complex activity of today's modern society. If you have on mind its nature as a business, can not omit the fact that the tourism is organized as a dynamic system of creating a number of commercial and non-commercial activities that shape the tourist product. The dynamic of tourism is a consequence of changes in the environment. In fact, we can freely say that tourism is an activity that is most sensitive to permanent changes in all spheres of environment, changes that cause permanent alterations of travel demands and equivalent to that changing the quantity and content of tourist offer. Simultaneously, it includes many relationships that are happening during tourist trips of individuals, simultaneously creating significant economic and wider economic effects. The positive economic, social and cultural impacts that tourism have on the country where tourism is developing, encourages not only developed countries but either developing countries to effectively manage their tourist potentials and planned to direct their use. In this complex of different activities, the whole country, but mostly the resorts must have to develop their product creating image of more attractive tourist destination.

Among the tourist destinations that have priority in the Republic of Macedonia, the most famous is Ohrid with its tourist potentials. The utilization of these potentials is an obligation and responsibility of the competent authorities of local government, management of hotels companies in Ohrid, managers of travel agencies that will place tourist product of the city to foreign markets, transport companies and all those institutions that with their own product or service contribute for shaping the tourist offer of thr town. Their successful integration efforts to manage the tourist values form the attractiveness of this tourist area and its attendance from foreign tourists.

Despite the significant tourist value, the contents of the tourist offer of the city is not set as a factor for achieving competitiveness in the international tourist destination market. The potentials are not sufficiently and appropriately used. In this context, strategic change management of the tourist product through the innovation of tourist offer, emerges as the most important tool to guide tourist development.

1. Condition of the Ohrid tourist turnover

Ohrid is the most attractive tourist destination in Macedonia. With the natural and antropogenic values, Ohrid always was interesting and attractive to tourists, especially to the foreign vistors. The characteristics and beauties of the Ohrid Lake, the cultural-historical heritage and the natural, ambient and ethno-social motives, are factors that make Ohrid the biggest and most famous tourist center of Macedonia. However, to specify what is the Ohrid tourist condition in time and space, it must be analyze the tourist trade, expressed through a number of realized tourist nights.

Table 1. Participation of the tourist turnover of Ohrid in the tourist turnover of Macedoniab

Overnights- Ohrid

Overnights- Macedonia

Total home foreign

Total home foreign

STATISTICAL REVIEW: Transport, tourism and other services,,681, Skopje, June 2011

2005 904396 774670 129726 1970041 1527053 442988

2006 896660 767561 129099 1917395 1474550 442845

2007 961211 813716 147495 2019712 1501624 518088

2008 104686 874071 172765 2235520 1648073 587447

2009 951254 774424 176830 2101606 1517810 583796

2010 852395 644415 147576 2020217 1461185 559032

Table 2. Percentage share in overnights in Ohrid compared to the overnights in Macedonia (Source: own analysis)

% share

total domestic foreign

2005 46% 51% 29%

2006 47% 52% 29%

2007 48% 54% 28%

2008 47% 53% 29%

2009 45% 51% 30%

2010 42% 44% 26%

Nearly half of the total tourist turnover realized in Macedonia comes from Ohrid. However, according to the State Institute of Statistics0, the number of nights spent in Ohrid in 2009 compared to 2008 decreased by 9.1%: at the domestic tourists reduction is 11.4% while that of foreign tourists has increased overnight stays by 2.4%. It is evidently that the number of overnights decrease in 2010 in the same time in category of domestic tourists and foreign tourists. As a particularly important conclusion that can be set from officially published data of the municipality of Ohrid - the reports of the Department of Tourism and the State Statistical Office of the Republic of Macedonia is that the tourist trade in Ohrid in the analyzed period is most intense in summer, in the months of July and August. Therefore, it can be concluded that in Ohrid the lake tourism is the current tourism but not enough other tourist values are used for the development of alternative types of tourism.

2. Reasons for the current situation

In order to gain knowledge about the causes of the current situation of tourism in Ohrid, it was conduct a survey of 80 tourists from over 40 domestic and 40 foreign guests. To gain information on whether hotel management companies in the Ohrid Riviera, travel agencies as intermediaries in sales and local government as a participant in the creation of tourist offer strategic direct the development of the tourist offer, an closed type interview was conducted with the next questions:

• Do you make market research and how?

• What is the structure of your organization?

• Do you make plans in the form of written documents and for what time periods?

• Do you consider to expand business?

c Statistical yearbook 2011

• Do you follow the changes in the environment and how, by what kind of methods?

• Do you apply international standards of quality?

• Do you have a vision of where your organization will be in the overall tourist offer of the city?

• Do you follow the changes in the activities of competitors and how you respond to them?

• Do you have concretized guidelines for development?

• How decisions are made?

• What is your attitude toward motivating employees, do you practice?

• What do you think about team work do you practice?

• Do you sophisticate the abilities of your employees? What methods are in use?

• How to organize the promotion of your services?

• Do you cooperate with other hotels and tourist agencies and how?

• What is your relationship with the local government?

The interview was conducted with 26 managers from ten major reputable hotels in the Ohrid Riviera -eight top managers, 10 managers of functional areas and 8 heads of departments and 4 managers of travel agencies.d

The intention was to get answers to the following questions:

- Who are consumers of the tourism product of Ohrid?

- Why the consumers choose Ohrid as a destination?

- How they are informed about it?

- Are they satisfied with the offer?

- What kind of services and attractions they want?

- Are they satisfied with the expertise of providers of tourist services?

- What is the situation with the formal education of staff in hotels and tourist agencies?

- How it is accomplished training and development of staff in the tourism business of the city?

- Is there a coordination of services in a unique tourist product at the Ohrid?

- Is the promotion of the city as a tourist destination satisfactory?

With analyzing the answers and opinions, we come to the following basic conclusions:

- Hotel companies as primary carriers of the offer have significant advantages but at the same time more weaknesses

- The tourists bring out their requests for novelty, variety and richness of content and shape of the tourist product

- The tourists highlight their dissatisfaction with the high prices of services

- Need to identify and exploit the potentials of the city to promote the tourist offer

3. Analysis of the potential development of the tourist offer

Potentials for development of tourist offer of the city are resulting from its features in the context of dynamic social environment factors. They can be established from the SWOT analysis and the pattern of internal and external factors of the city as a tourist place. The available documents from several hotels and the data obtained from their web pages, the results obtained from the survey of tourists and managers interview helps to identified positivities and weaknesses of these companies, and with the analysis of

d Hotels: Desaret, Metropol, Bellevue, Inex, Granit, Belvedere, Slavija, Millenium Palace, Sileks and hotel complex in St. Naum Tourist agencies: Elidaturs, Vispoj, Aurora, Teotravel

several official reports of the World Bank Group and SEED program" and data published on the websites of respective hotels, the website of the city, more publications on natural and cultural values of this city, can set up the following SWOT analysis:

Table 3. SWOT analysis of the Ohrid tourist offer (Source: own analysis)

(Strengths) (Weaknesses)

1. rapid growth of hotel industry in Ohrid 2. favorable location of accommodation, next to the lake and downtown 3. well-equipped rooms 4. service with high quality 5. professional staff 6. nice atmosphere, especially for holiday family vacation 7. entrepreneurial activities 8. family involvement in business activities 9. gastronomy - the production of quality food specialties 10. hospitality 11. modern technical equipment 12. cultural and historical values of the city and surroundings that create authenticity of space 13. noticeable natural rarities 14. creation of additional amenities such as able to get approval from local authorities to open a business center and sports center 15. Ohrid is near the border to Albania, which makes possible for visits of tourists from the neighboring country 16. promotion of Macedonia in the international tourist market through the general tourist propaganda 17. on-line promotion of the city and its hotel offer 18. joint promotion of the city and its hotels on international fairs 19. cooperation with tour operators and hotels from neighboring countries 1. underdeveloped road infrastructure 2. underdeveloped managerial structure in hotel 3. more managers in hotels are not independent in making decisions 4. no established system for calculation of salaries and bonuses / rewards for employees in many hotels and agencies 5. no internal information system necessary for decision making 6. no categorization of rooms 7. difficult to find hotels web site 8.insufficient promotion of the city as a tourist destination for foreign tourist markets 9. insufficient marketing activities 10. prices of services remained unchanged throughout the year without out off season cuts and discounts 11. no strategic guidance for tourism development 12. between hotels and travel agencies exist competition 13. weak cooperation between hotels, local government and tourist agencies 14. economic instability of our country 15. low purchasing power of domestic tourists 16. guarantee the safety of foreign tourists in the country in turbulent conditions 17. insufficient non-board services

(Opportunities) (Threats)

1. expanding tourist market 2. growth of global trade and internationalization of tourist business 3. changes in tourist demand (increase of leisure time, rising living standards, modernization of trade and enlargement of interest in searching the 1. economic instability and inflation growth 2. possibility of hotel product substitution 3. competition from the tourist industry of the neighboring countries in the region 4. very weak entry of foreign investments in R. Macedonia in general, and its tourist industry

new unknown areas)

4. changes in travel motivations from relaxation and sunbathing to fun, adventure, pleasure, health and cultural understanding

5. changes in the pattern of relaxation from passive to active tourism

6. increased interest for individual arrangements

7. increased interest in discovering new lands

8. increased interest in clean, unpolluted and healthy environment (air, soil and water)

9. promotion of tourism through festivals and other events in Ohrid

10. social and cultural changes have shaped patterns of market requirements impacting the tastes, interests and desires of tourists_

5. financial crisis impacts

6. connection between the activity of tourist organizations and the atmospheric influences

Presented factors suggest that there are great opportunities for improvement of tourist product through a strategy of change and innovation.

4. Innovation as a way to manage change

Strong domestic and foreign competition over the past decade put a new and strong emphasis on innovations and changes in the tourist organizations and forced managers to focus on three basic behavior components:f

- risk-taking, giving priority to high risk and great profits activities instead of those that carry less risk and lower profits;

- proactive, to be first in the sale of products and services, and less to react to the actions of competitors;

- innovation, to leave a strong impression with new products or new services which arise from their own potentials.

The tourist market is known as a sphere of high competition between travel companies and tourist destinations. The competition comes from the specification of the tourist product and the possibility of its substitution. Having in mind the fact that every tourist destination is a space where tourist can find many recognizable attractions, is clear that its success in the competitive tourist market depends on the mutual coordination of activities of all stakeholders in the supply of this area. The organization of tourist destination needs to reflect changes in the sphere of tourist demands and needs. The only way to achieve that is the strategic demand management. Within the destination, all organizations - holders of travel services- especially hotels and travel agencies must adapt their structure and facilities to the characteristics of the market and potential tourists.

In this context, the holders of tourist services that form the tourist offer of the city have significant potential for improving the content provider. It is the only way for tourist destination to boost tourist income throughout the year.

Innovation is a specialized kind of change. It occurs when a new developed idea translates into

f D. Miller, "The Correlates of Entrepreneurship in Three Types of Firms' Management Science", Vol 29, 1983

new business, new product or service, new process, a new method of work or their improvement. Innovations in hotels can range from new services that they penetrate the market to small, insignificant improvements. But no matter, they represent the most important area of achieving competitive capabilities.

Innovation occurs in the manufacturing process. Although hotels have a specific technology work, innovation in its composition can be an important element for success. Such changes occur in market segmentation and development of product ideas and materialize them, a way of distributing and promoting.

Innovative hotel company can be identify by a high rate of placing new products and services and from the brief period in which they develop. It is a company that change continually, modify and improve its existing product to meet new market opportunities.

4.1. Areas of innovation and change

Can be selected four key areas in which change can be occur in the creation of the tourist product. That are organizational structure, technology, human resources and organizational culture.

- Structural changes refers to the reorganization of internal relations in the organizational system. It involves changing patterns of communication and interaction between individuals, groups and organizational levels in companies and among individual holders of tourist services. When changes like this arise, the result can be redesigning jobs and tasks they perform, the sequence of operations or channels of vertical and horizontal communication. Structural changes may have a different intensity. Some are small changes in the form of improvements to the existing organizational structure while others are dramatic changes that create major modifications and improvements of the work process.

- Technological changes are changes that occur in the technique that is used, equipment, technological process or methods of promotion and distribution of products or services. They can mean:

• Introduction of new products or services that will enable improvement of existing ones. It will be expanding the content of the tourist offer.

• Diversification of tourist services in order to develop new types of alternative tourism which will allow extension of the tourist season throughout the year. Ohrid has excellent values for development of cultural and mountain tourism.

• Changes in the content of the promotional mix by introducing new forms of aggression and greater promotion of tourist propaganda. Technological changes can significantly affect the company's organizational structure and on the number and structure of its staff.

- Changes in human resources usually refer to the changing knowledge of employees, their skills, attitudes, perceptions and their behavior. The changes are caused by using different methods and techniques for training and employee development and the company can enhance the effectiveness of its operations.

- Changes in organizational culture means changes in the system of shared values, assumptions, attitudes, beliefs or norms that determine behavior. To change an existing culture is not an easy work. The literature indicates that organizations are actually cultures and the change of culture means changing the organization. Although the procedure for changing the culture requires much effort and time, modern managers perceive the need to change the current culture when the existing culture become too narrow framework that obstruct the successful execution of operations. Factors that cause this need are the factors of the environment. In the matter of external factors such as technological, social-cultural or economic changes, it is obvious that they can cause a change in the culture. There are different opinions in

management theory about the internal factors and about the attitudes and beliefs of the founders and top managers in the company about the areas of change. Among the authors there is divided opinion about the impact of the founder and manager in the process of creating cultural values. The true role of the manager and founder in starting and running a cultural change is difficult to specify. In addition to different opinions, it is obvious that the founder affect the formation of culture, but he does not has the most impact. Certainly the founder is powerful to incorporate some elements in the culture of the company, but managers are "creators of symbols, ideologies, languages, rituals, myths ..." Managers use these elements to gain the founders and other employees. Personal manager prejudices also can greatly affect the specific culture, such as "Women can not do this", "All wish to deceive," "Nobody can do the job as I do."

All these areas of changes are closely connected. The change that occur in one of them causes changes in the others.

4.2. Why there is a resistance to change?

Change is not always accepted by the members who constitute the tourist product. Usually this is the case of employees in hotel companies and travel agencies. While management recognizes the need for change, many people, as persons with their own habits, tend to oppose the change process. There can be given many reasons that cause resistance to change, but few of them are more important. One of the famous reason for rejection of change is the feeling of security procedures that were previously tried. That persons represent the attitude "We have always did it this way."

Another reason is their own interests. When people hear about the change have a natural tendency to ask "How will this change affect on me?". If an individual perceives an answer that is not wanted by him, he creates resistance to change. How much resistance will be create depends on how strongly the individual is confident that its interests are threatened.

Another common cause of resistance to change is the change misunderstanding and the lack of confidence. People are always against change if they not understand. Low levels of trust between managers and other employees, that are common in many organizations, contribute to the possibility of wrong understanding.

The change is opposed not only by workers but also by managers either. Managers who do not trust their workers and are afraid of losing power, often oppose their involvement in making decisions about their work. This is often present in tourism where employees directly and immediately communicate with the guests and can contribute up with their suggestions when making decisions. Managers usually remain "deaf" to the suggestions of the workers.

Resistance often occurs as a result of different views about the change. Different views are the main reason for the lack of support of innovation. Since innovations involve new concepts, their value is not always acceptable for others. Therefore, some individuals will not see change as beneficial, but rather as destructive to the organization.

Individuals vary in their ability to adapt to new situations, with some individuals who have a low tolerance to change. As a result they sometimes resist the change because they fear that they will not be able to learn new skills and behavior that it contains.

Managers need to diagnose a potential reason why individuals that must be involved in the change can show resistance. That allows managers to choose ways to overcome resistance. Otherwise, all their efforts

for change and innovation may be uselessness.

4.3. Activities for overcoming resistance to change

There are several techniques that managers can use in eliminating or minimizing the resistance to change and innovation.6 One of them is the technique of education and communication among those who changed and those who resist. It includes providing adequate information and assurance that changes are clearly understood by all those on which the changes affect. Overcoming resistance to change can be carried out with participation and inclusion of people who show resistance. Resistance is lower when individuals who are affected by changes are allowed to participate in planning and implementing of them. The use of incentives and support is another way to overcome resistance. When individuals react with fear and mistrust in introducing the changes, managers often help which reduce their resistance. This technique involves training and instruction to staff and providing adequate equipment and need materials.

Another approach for reducing the resistance is negotiation and bargaining. Negotiations may be particularly important strategy when one group considered to be threatened with the changes and is able to cause change efforts fail. If other techniques such as education and participation are not successful, there can be use negotiation to achieve cooperation on efforts to change. Overcoming resistance can be performed with acquisition and manipulation. Manipulation involves placing selective informations about the changes, so they can become more attractive to potential opponents. If the selective use of information avoid the potential negative aspects of change, then raises the question of ethical operation. In the acquisition, the leader or an influential person among the potential opponents, given an important role in the change process in order to gain cooperation. Usually this function is only symbolic in the sense that the individual can not contribute much to the process of change. In any case, the function can be a challenge for the influential person to get his support. The danger of manipulation and acquisition is that this strategy could have negative consequences if the person recognizes what has happened and feel manipulated.

To overcome resistance to change can be use the technique of explicit and implicit compulsion. This technique involves direct or indirect use of force to push the opponents of the resistance to cooperation. It usually uses a direct and violent threat as a loss of job, promotion, salary, recommendations etc. Individuals can be fired or moved. Compulsion does not always give the expected results. The negative effects that this technique may cause in the tourist turnover are most noticeable in tourism because of it specific relation that is established between tourists and tourist employees. Among the aforementioned techniques for overcoming resistance to change managers can use the method known as force-field analysis.11 This multi-method involves analysis of two types of force - the driving force and limiting force, which are affecting on any proposed change, and then it is make assess for what is the best way to overcome the resistance. The driving forces are those factors that tend to certain changes while limiting forces are those factors that are pushing against the changes. At any point in time, two forces are pulling into different direction, leading to equilibrium which defines the current condition or status quo situation. To change the status quo situation to a desired situation, it is necessary to encourage the driving forces or reduce the limiting forces, or both at the same time. While managers like to think in terms of strengthening the driving forces, the increases according by Levin, largely caused an increase in the limiting forces. Therefore managers have a better chance to contribute to successful change if they advocate for reducing the limiting forces.

g According to John P. Kotter and Leonard A. Schlesinger, "Choosing Strategies for Change", Harvard Business Review 1984, 106114

h This method was created by psychologist Kurt Levin, quoted by Bartol K., D. Martin, Management, Irwin, McGraw-Hill, 1998


Modern business world is characterized by permanent changes in all spheres of the environment. The tourism with its specific character is very sensitive of changes. In these circumstances, managers in the hospitality industry in Ohrid, must seek and recognize the opportunities of the tourist market and its capabilities along with the exploitation of the tourist values, if they want wealthy and more attractive offer. Every opportunity should be their challenge to respond by downloading the changes.

The change means changing the status from the status quo to the desirable situation and is closely linked to innovation, which is a specialized type of change occurred when developed new idea translates into a new product or service, new process, a new method of work or their improvement. Change and innovation can be carried out in four key areas of organizations: organizational structure, technology, human resources and organizational culture. By implementing them, managers often face with resistance to change. As basic ways to overcome the resistance are: education and communication, participation and inclusion of people who show resistance to planning and implementing change, negotiation and bargaining with persons affected by the change, manipulation and recruit employees and technique of explicit and implicit compulsion.


Bartol K., D.Martin, Management, Irwin, McGraw-Hill, 1998

C.A.Lengnick-Hall, Inovation and Competitive Advantage: What We Know and What We Need to Learn, Journal of management, vol.18, 1992

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STATISTICAL REVIEW: Transport, tourism and other services,, 681, Skopje, June 2011

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Questionnaire results:

Do you come for the first time? Total %

Yes 46 57%

No 34 43%

Total 80 100%

How were you informed about Ohrid? Total %

Agency/turoperator 10 12%

Web 30 38%

Recommendation 40 50%

Total 80 100%

Do you think that hotel employees have enough knowledge and skills for quality tourist services? Total %

I agree 42 53%

Undecided 29 36%

I do not agree 9 11%

Total 80 100%

Do you accept the current prices? Total %

Yes 20 25%

Partly 31 39%

No 29 36%

Total 80 100%

Would you come again? Total %

Yes 32 40%

No 12 15 %

Undecided 36 45%

Total 80 100%

Travelling reason?

Vacation 35 44 %

Recreation 25 31 %

Health 8 10 %

Business 4 5 %

Congress 3 4%

Others 5 6%

Total 80 100%

What do you want to be changed

in the current tourist offer? Total %

Better quality of services 4 5%

Better kindness of staff 2 2%

Better gastronomic product 2 2%

Better hygiene 0 0 %

Better informing 6 8%

Implementation of other conveniences 32 40%

Entertainment of a different kind 34 43%

Total 80 100%

What makes Ohrid diferent tourist destination? Total %

Cultural-historical activities 29 36 %

Nature beauties 30 38 %

Accommodation 15 19 %

Accessibility 6 7

Total 80 100%