Since early 2000 in Ukraine a system of cheap accommodation for young people - hostels, which are popular worldwideis developing. The first hostel was opened in 2003 in Uzhgorod, and there are about 80 hostels and similar accommodation in Ukraine today. Despite the economic crisis, the industry progresses, showing annual growth of 25-30%. Availability of hostels in the country is one of the most important factors to facilitate the process of European integration and increase the international prestige of Ukraine as a tourist state. Research of our experts have proven that one job in a hostel or similar accommodation creates five additional jobs in related industries.

We are very concerned for the situation after the deputies of the Parliament in first reading the draft Law of Ukraine № 7293 of 10.26.2010 amending the Law of Ukraine "On Tourism" on the establishment of mandatory categories of tourist infrastructure. The problem is that the hostels as a means of accommodation is not mentioned in any document of the current legislation of Ukraine. Introduction of mandatory set of categories for accommodation facilities can adversely affect the development of tourism and youth hostel movement in Ukraine, lead to abuse, extortion facts, monopolizing the industry, other negative consequences.

Including the hostels as accommodation facilities to the legislation of our state have repeatedly discussed by the Ukrainian Youth Tourist Association (UYTA) representatives at all levels. Today the question is whether as a cover for establishing categories for accommodation properties of hostels and similar accommodation, what standards will be based in the process of categorization, etc. EU countries experience shows that none of the existing standards are not ideal, particularly standard of the HOTREC Association, which is now actively lobbied in Ukraine. The HOTREC standard only introduced at seven EU member states. Countries such as UK, France, Spain, which have enormous experience and tradition in the hotel business organizations have no participation at the HOTREC.

Our experts believe that the Law of Ukraine № 7293 from 10.26.2010 will have negative implications for the field of economy-class accommodation, namely:

• increase the accommodation rates, which in turn would reduce the number of tourists who stay at the economy class accommodation. Also rates increase may contribute to an outflow of foreign tourists from Ukraine;
• reducing the number of hostels and similar accommodation, leading to loss of citizens of Ukraine of their jobs, and - to a reduction of revenue. In our assessment, may cease operations for 60% of economy class accommodation;
• the possibility of abuse, availability of evidence of corruption and extortion by government auditors.

The majority owners of hostels and similar accommodation registered their business as individuals, businesses that pay taxes under the simplified scheme. That is why their business, accounting and reporting is fundamentally different to real hotels. Moreover, our Association developed their own standards of hostels and similar accommodation, which are based on the experience of the World Youth Hostels Federation (WYHF) and adapted to the current legislation of Ukraine (Appendix № 1). According to the WYHF standard, hostels have little or no division into categories, because in our view, it is inappropriate to enter the certification of hostels and similar accommodation in Ukraine.

So, based on the above, we consider it appropriate to ask you to support to:

• rejection of the draft Law of Ukraine № 7293 of 26.10.2010 amending the Law of Ukraine "On Tourism" on the establishment of mandatory categories of tourist infrastructure adoption on second reading as something that is impractical;
• revision of the draft Law of Ukraine № 7293, including the separation of accommodation, working under the simplified taxation system, in a separate category from terminating them for compulsory certification;
• discuss issues of hostels and similar accommodation in Ukraine, taking into the Standards Project for youth hostels consideration, and feasibility of the introduction of the HOTREC standards in Ukraine.

Sincerely,

Oleksandr Fainin
UYTA President