Sune Bechmann Pedersen. Journal of Tourism History. Volume 10, Issue 2. 2018.
Starting in the mid-1950s, East European governments, their state tourist agencies and Western travel companies made a combined effort to turn Eastern Europe into a destination for Western tourism. Every year since the early 1960s, millions of Westerners went on holiday in Eastern Europe. With varying degrees of success—over time and between countries—Eastern Europe took part in the rapidly growing travel industry during the Cold War. This article explores, through the prism of the Swedish Folkturist travel agency, the increasing interconnectedness of the tourist industries on either side of the systemic and ideological Cold War divide. Founded in 1961 by leading Communist Party members, the agency sought to familiarise Swedish travellers with socialist societies. While Folkturist itself never managed to occupy more than a marginal role in the Swedish travel market, the story of its fierce competition with commercial outfits, volatile relations with East European state travel agencies and pragmatic ideological approach provides new perspectives on how the tourist industries of Eastern Europe expanded during the Cold War.
International tourism is a peculiar branch of the export sector. The communist states exported goods to the West throughout the Cold War, but these exchanges did not expose the socialist societies to Western eyes. Tourism, however, is the export of experiences on the ground. For the communist states, it entailed the direct contact of Westerners with their societies. Tourism was thus a double-edged sword. On the one hand, it opened for cultural diplomacy in its strictest sense—the direct ‘communication between governments and foreign people’. Tourism made it possible to counter Western propaganda by showing visiting Westerners the most appealing sides of a socialist society. On the other hand, tourism posed the risk of exposing the shortcomings of socialism in the eyes of the visitors, and in the eyes of the locals faced with visibly affluent foreigners. Despite the importance of the circulation of holidaymakers between East and West—and with them, goods and ideas—the growing literature on the cultural Cold War usually mentions it only in passing. Western tourism’s economic importance for the socialist states is sometimes acknowledged, but its cultural and political significance on either side of the Cold War divide remains underexplored. Instead, the literature on leisure and tourism in Eastern Europe has focused on interwar visits to the Soviet Union and on tourism in and between the Eastern bloc countries during the Cold War.
So far, only a few studies have engaged with the emergence of Western tourism to the Eastern bloc. The limited research on communist travel agencies in the West has discounted their activities as ‘political tourism’. This is unfortunate, since political tourism comes with the connotations of revolutionaries and fellow travellers on delegation visits to the Soviet Union in the interwar period or to Castro’s Cuba or Mao’s China. These visits differed markedly in form and function from the leisure tourism, which the Western communist travel agencies also helped develop from the 1950s onwards. Western delegation visitors to the Soviet Union in the interwar years and the late-Stalinist era tended to be sympathetic to the communist experiment and tried to promote the image of the Soviet Union abroad through travel writing and public lectures. The itineraries contained visits to model farms or factories, and meetings with locals whom the authorities trusted would give the visitors a positive impression of the country. The purpose was always to convince the visitors of the remarkable efforts being made to achieve a better society. After the thaw in East-West relations, however, the Eastern bloc slowly opened up to new modes of tourism for Westerners that differed little in form and function from the ones prevalent in Western Europe at the time. This study analyses the competing institutional interests at stake in the process of turning Cold War Eastern Europe into a site for Western leisure tourism. Through a close study of a communist travel agency, the article demonstrates the pragmatism at work on either side of the Iron Curtain when political ambitions clashed with the quest for revenue.
Opening Eastern Europe to International Tourism
The insight that the tourist industry could help generate hard currency in post-war Europe was not widely shared at the time. The Marshall Planners who had realised the utility of international tourism for the peaceful and prosperous development of Western Europe initially had to fight to convince politicians and bureaucrats of the industry’s merits. Soon, however, the European Recovery Program supported the reconstruction of hotels and transport links necessary to attract North American tourists, and the Organisation for European Economic Co-operation (OEEC) pressed for the end of visa requirements, extensive border controls and customs regulations that hampered tourists’ mobility. Meanwhile, the Eastern bloc under late Stalinism viewed international mobility with the utmost suspicion and strove hard to seal the borders against Western contamination.
After Stalin’s death in 1953 and the Geneva Summit in 1955, early Cold War tensions began to subside. At a Council for Mutual Economic Assistance (CMEA) meeting in Varna later that year, the East European states decided to ease their internal border regimes and sought to coordinate tourism in the region. Khrushchev’s foreign policy of ‘peaceful coexistence’ included a gradual opening up of the Soviet Union to Western tourists. Other CMEA members followed suit. Instead of seeing Western tourists solely as a security threat, the Eastern bloc began to realise tourism’s uses in cultural diplomacy and contribution to the trade balance. For example, when Czechoslovakia revised its policy towards Western tourism in the autumn of 1955, a report prepared for the Politburo explicitly stated that ‘At present, the development of tourism is of particular political importance. Foreign trade is becoming one of the instruments of mitigating international tensions and promoting the states … in the democratic camp’. In subsequent years, the East European states joined the European Travel Commission, the European branch of the International Union of Official Travel Organisations (IUOTO). This provided government officials and tourist professionals with international fora in which expert knowledge could circulate between East and West.
In the decades that followed, leaders on both sides of the Iron Curtain often expressed the belief that tourism fostered peaceful international relations. A rapidly growing tourist industry, eager to promote itself as a force for peace and prosperity, was happy to support this thought. For the CMEA members, the economic argument would eventually outweigh the cultural diplomacy aspect, but in official discourse, the latter continued to hold the upper hand. For instance, the 1970 Conference of State Authorities for Tourism in Socialist Countries (CSAT) stated that ‘international tourism is, besides its economic importance, one of the most important instruments to strengthen mutual appreciation’. In the meantime, the security apparatuses remained obsessed with the risks posed by Western tourists. The Bulgarian and Romanian secret police thus kept Black Sea hotel resorts under surveillance, and Czechoslovakia repeatedly launched vigilance campaigns to caution citizens against Western agents posing as tourists. At the same time, the economic benefits could not be ignored. In 1974-1975, Bulgaria, arguably the country that benefitted most from Western tourism throughout the Cold War, earned around one-fifth of its hard currency from tourism.
The development of Eastern Europe into a tourist destination for Westerners involved governments, state tourist agencies and companies in the East and the West. The process started at the highest political level during the thaw, when the East European governments eased their visa regimes and introduced advantageous tourist exchange rates. Removing the basic impediments to inter-bloc mobility, however, was not enough to ensure the inflow of Western tourists. Transport links and package tour programmes were needed. This was a task for the East European state tourist agencies, which collaborated with Western travel agents to promote their countries as tourist destinations in the West. The composition and influence of these state organisations varied between countries and over time. The Czechoslovak state tourist agency, Čedok, was founded in 1920, shortly after the birth of the democratic First Republic. Nine years later, Intourist was founded as the Soviet Union’s state tourist agency. As early as 1932-1933 Intourist opened branches in Berlin, London, Paris and New York. According to Shawn Salmon, they were supposed to ‘allow Intourist to work closely with local populations to counter any misrepresentations of the Soviet Union and encourage an increase in visits to the country’. The local offices advertised and facilitated package tours and point-to-point air and train tickets and assisted the production of Western tourist guidebooks.
In South Eastern Europe, Romania’s Oficiul Naţional de Turism (ONT) also dated back to the interwar period. After the communists came to power, it was dissolved, only to be re-established during the thaw in 1955, now under the aegis of the Ministry of Foreign Trade and repurposed to attract international tourists. In comparison, Bulgaria’s Balkantourist state tourist agency was founded by the communists and originally modelled after Intourist. After de-Stalinisation, the East European tourist organisations generally gained in importance and in the case of Bulgaria, a Committee for Tourism established in 1966 obtained the rank of a ministry in 1973. The ascendance of the tourist administrators in the bureaucratic hierarchies reflects the growing recognition of the tourist industry as an important source of hard currency and a point of contact with the West. For instance, a year after the Prague Spring, the Czechoslovak authorities openly stated that they wished to see the number of Western visitors return to its pre-invasion level to earn hard currency. Staffing the state tourist agencies with guides who could handle Western tourists was always a challenge. The job required knowledge of domestic and international affairs and fluency in at least one foreign language. American intelligence from the late 1950s suggests that only a small number of Čedok employees were party members, because the nomenklatura did not possess the qualifications.
When the East European state tourist agencies engaged in collaboration with Western tour operators, they opted for a broad range of partners. The Western collaborators included businesses directly or indirectly owned by communist parties, front organisations such as friendship societies, social-democratic travel cooperatives and strictly commercial outfits. Before the Second World War, for instance, Intourist chose as their agent in the Swedish market the esteemed Nyman & Schultz agency, which also specialised in luxury round-the-world tours. In 1956, the parties resumed their collaboration, and Nyman & Schultz continued to promote tours to the Soviet Union in apolitical terms. Intourist also found business partners among the travel agencies affiliated with the Western labour movements and among the communist travel agencies and friendship societies established in the West after the Second World War. In France, for instance, the trade union Confédération générale du travail (CGT) had its own travel agency, Tourisme et travail. After the communists started to dominate CGT in the mid-1950s, Tourisme et travail put on holidays to a wide range of East European destinations. In Scandinavia, the Swedish social-democratic labour movement founded the non-profit travel organisation Reso in 1937. After the Second World War, the company secured a considerable share of the Swedish travel market, including package tours to Eastern Europe. Still the Communist Party of Sweden (CPS) considered the market for East European tourism underdeveloped and in 1961 it decided to launch a competing travel agency, Folkturist.
Communist Travel Agencies in the West: The Case of Folkturist
Like all of Europe’s communist parties, the CPS received a popular boost from the Soviet Union’s contribution to the defeat of Nazism. At the general election in neutral Sweden in September 1944, it registered its best ever result, winning more than 10% of the vote, up from 3.5% at the 1940 election. That support proved short-lived, however. The established parties continued forming a national unity government without the CPS and at the general election four years later the Party backed to 6.3% of the vote—a result that would nevertheless remain its best throughout the Cold War. Support of the February coup in Prague had dented its popularity, and its membership soon plummeted from almost 50,000 in 1946 to around 20,000. During the 1950s and early 1960s, the Party was generally loyal to Moscow even if it had talked of a ‘Swedish road to communism’. Only belatedly did the CPS begin to critically reassess the Stalin era, yet at the same time, the Party repeatedly lent the parliamentary support needed for the Social Democratic Party to form a minority government. As was the case with most of its West European sister parties, its loyalty to Moscow was generously rewarded with illicit financial support. The Party newspapers often carried large advertisements by East European companies that reeked of indirect subsidies. A plethora of party owned businesses engaged in shady trading with Eastern Europe. Yet despite determined efforts, the Swedish Security Service never managed to prove any illegal funnelling of money to the CPS.
One of the communist companies suspected by the Swedish Security Services of channelling funds to the CPS was the travel agency Folkturist, founded in Stockholm on 5 July 1961. At least three of its four founders were active members of the CPS. On the board was the political entrepreneur Georg Greiff, an active communist for most of his life, and previously characterised by the Swedish Security Service as a ‘fanatical’ and a ‘professional communist’. Greiff’s numerous businesses with communist Europe saw him suspected of funnelling money. At one point, he headed several companies importing commodities to Sweden from Eastern Europe, working out of an office in East Berlin. On more than one occasion, the Security Service put him under surveillance. With Greiff in a leading role, the Security Service thus suspected Folkturist of serving as yet another company moving funds past the Iron Curtain. It therefore kept a close eye on the agency, at least until 1966 when the CPS increasingly distanced itself from Moscow. Unfortunately, the Swedish Secret Service archives remain classified, and the special commission enquiry into the Swedish Security Service offers little information about Folkturist. The following analysis is thus primarily based on the Folkturist company archive deposited at the Swedish Labour Movement’s Archives and Library in Stockholm (ARAB). Since few documents survive from the company’s earliest years, the archive adds little to the general knowledge about the transfers from the East. Instead, the archive offers a unique insight into the history of a political tourist agency in the Cold War and its interactions with East European tourist organisations.
Three months after the foundation of Folkturist, the board met with representatives of six friendship societies (the Swedish-Bulgarian, Czech, GDR, Hungarian, Romanian, and Chinese friendship societies). Georg Greiff explained that the company’s primary objective was to organise group tours and study trips ‘with another accent than common among the other travel agencies’. Organising study trips, holiday tours and related services should allow the company to improve international relations. Greiff considered it ‘of particular importance, that we are able to maintain and improve this activity with all countries, and not least the countries with which your societies have already established good contacts.’ ‘Otherwise’, he continued, ‘it is our intention to run Folkturist as a regular travel agency’, and he hoped to see an extensive domestic activity. A deal had already been entered with the GDR. Negotiations were underway with Soviet, Romanian, and Hungarian representatives, and similar discussions were scheduled with Bulgaria, Czechoslovakia and China. The intention was to launch the business within a few months.
Greiff’s statement was positively received at the meeting. The representative of the Swedish-Czech friendship society reported that his association had organised 11 group tours to Czechoslovakia in 1961, but other travel agencies had often opposed eastbound journeys blaming difficulties with visas and currency exchange. Especially Reso, the Swedish labour movement’s travel company had been uncooperative. The representative of the Swedish-Hungarian friendship society was equally optimistic. He noticed that a million Swedes travelled south every year, but, so far, the regular travel agencies had not done anything to promote tourism in Hungary. The representative of the Swedish-Romanian friendship society added that a thousand Swedes had already travelled to Romania in 1961 and that figure was expected to double the next year. Sadly, though, the tourists all travelled to the Black Sea resort of Mamaia, ‘even if you do not acquire any thorough knowledge of Romania in its entirety there. Special tours are therefore needed’. This remark encapsulates the challenge facing Folkturist and its ideological sister companies across Western Europe. The general interest in tourism to Eastern Europe was growing. ‘I think I sort of feel it in the air that people in general more and more begin to want to travel eastwards’, the representative of the Swedish-Bulgarian friendship society mused aloud. Reso had provided tours to the Soviet Union since 1955 and the number of Western visitors to the East was going up, even if the invasion of Hungary in 1956 had temporarily dampened their enthusiasm. However, the interest was increasingly in relaxation and less so in education.
Folkturist between Franco’s Mallorca and Gheorghiu-Dej’s Mamaia
The opening of Eastern Europe to Western tourism occurred while Western travel cultures were quickly changing. The purchasing power was on the rise and the paid holidays getting longer. In 1951, Sweden extended the statutory right to paid holidays to three weeks. Now that far more Swedes could afford a holiday abroad, the traditional bourgeois ideal of travel as a form of personal development was challenged by new ideas about the holiday as a pleasurable escape from work and everyday life. The novelty of this is evident from Reso’s annual report for 1956, which considered it necessary to explain the concept of recreational tourism. It noted that year’s overwhelming demand for seaside holidays to West Germany and Italy and concluded: ‘The great number of participants shows that the interest is increasing for so-called rest holidays [vilosemester], which means that you stay in one place and undertake excursions from there’. By the early 1960s, this mode of travel dominated the market. Fuelled by the falling prices of air transport, which made it possible to bring sun-starved tourists from Northern Europe to the beaches of Southern Europe in a matter of hours, charter flights soon overtook traditional bus tours.
Romania and Bulgaria invested in modern resorts on the Black Sea littoral to carve out its share of the growing tourist traffic from Northern and Western Europe. The challenge for Folkturist was to balance competing interests in this development. Naturally, the friendship societies were sympathetic to a communist ‘in-house’ travel agent, but their interest in the ‘authentic’ off-the-beaten-track experience of a socialist country were difficult to sell to a broader audience and required more planning than package tours to a beach resort. Tours that allowed for encounters with the advances of state socialism beyond the beach resort was a strategy that appealed to the base, but hardly one that promised revenue to finance party activities. A newspaper interview from December 1961 with the company boss indicates that the leadership was willing to go for broad appeal. He denied that Folkturist was a party political travel agency. ‘Admittedly we will primarily deal with journeys to the eastern countries, but if the customers want to travel somewhere else then we will not stand in their way. Folkturist has nothing against selling a ticket to Mallorca’.
This open pragmatism, combining political ambitions with recreational sun-and-sea tourism, was evident in the first Folkturist holiday catalogue from 1962. The catalogue opened with a company mission statement: Folkturist offered its services to ‘workers and clerks, artists and scientists, old as well as young’, and the company’s package tours aimed to ‘broaden people’s views’ and increase knowledge about other people’s ‘styles and standards, labour and culture’. However, half of the destinations offered were beach holidays. Bulgaria’s Sunny Beach, Mamaia in Romania, Sellin on the East German island of Rügen, and Hungary’s Lake Balaton dominated the East European section of the catalogue. In the West, Folkturist’s offerings included a Mediterranean cruise, Rhodes and even Franco’s Mallorca. The presentation of Mamaia did little to indicate that the customer would acquire knowledge of Romania different from what the competing travel companies already offered. The headline read ‘beach holiday’ and the resort was introduced as one of the best of the Black Sea coast with 300 days of sunshine a year. An excursion to Constanţa’s enormous aquarium was included in the price, and an additional excursion to a nearby mud bath could be purchased. The presentation of Nessebar in Bulgaria also highlighted the attractions of the sea and the beach and contained no information that set it apart from Reso’s presentation of the destination in their catalogue the same year. Even the two catalogues’ panoramic images of the resort were identical and were probably provided to both by Balkantourist. The prices listed were also near identical. Folkturist charged 1050 Swedish kronor for an all-inclusive, two-week stay at a category 1 hotel (925 kronor for category 2), while Reso wanted 995 kronor for the same trip (hotel category unspecified). This challenges the widespread assumption that the travel agencies affiliated with the communist parties were able to undercut their commercial competitors. Price comparisons of the Swedish market for tours to Eastern Europe during the Cold War show that Folkturist were sometimes more expensive than their competitors and rarely more than 5-10% cheaper. Often they merely served as agents for other tour operators instead of organising their own tours, thus making it difficult to undersell the product. This, for instance, was the case two years later in 1964, when Folkturist cut their own arrangements in Bulgaria and merely retailed Reso’s tours.
The company archive contains little additional information about its activities in the 1960s. However, it is clear that Greiff left the company by the end of 1962. His departure could indicate that the business was now well established and no longer needed his entrepreneurial experience. At the same time, Bertil Karlsson, the former secretary of the Swedish-Soviet friendship society, joined the company to assume responsibility for tourism between Sweden and the Soviet Union. Another employee was from then on responsible for tourism between Sweden and Bulgaria, Romania, Hungary, Czechoslovakia, East Germany and ‘other countries in Europe’. The division of labour between just two employees indicates that the workload remained limited at this point. By 1964, however, the business had begun to gain traction. According to its annual report, Folkturist had provided services to around 2600 outbound travellers and 2000 inbound visitors to Sweden. Travel to the Soviet Union accounted for a large share of the journeys, with 861 participants on ‘special tours’ and 967 on ‘conducted tours’—the latter included cruises to Leningrad (670 participants) and was probably synonymous with recreational package holidays. ‘Conducted’ sun-and-sea tours accounted for all the traffic to Romania (266 tourists at Mamaia) and Bulgaria (77 at Nessebar). The 192 tourists who travelled with Folkturist to the East German seaside resort in Binz accounted for 68% of the company’s total traffic to the country that year. The annual report clearly shows that Folkturist had not channelled tourist interests away from the seaside resorts. The Swedish-Romanian friendship society’s hopes for trips that would provide a fuller picture of the East European countries had not been realised.
Visually, the 1964 catalogue contained little that set it apart from its commercial competitors. The front cover depicted an idyllic palm beach; the back cover, a woman in a summer dress resting in front of a modern hotel. Of the 31 photographs inside the catalogue, 11 depicted beaches and 9 modern hotels. Grandiose historical architecture and a few monuments appeared in 11 photographs. Only two small illustrations alluded to the history of communism and the achievements of the socialist society: one showed the Lenin mausoleum, another the enormous Lenin stadium in Moscow. The former attraction also featured regularly in Reso itineraries of the time, though not in Nyman & Schultz’s catalogues.
The catalogues from subsequent years show a clearer specialisation on the East European market. Recreational sun-and-sea tourism remained a core activity as indicated on the front covers, which tended to show attractive women on sunny beaches. It is worth noticing that the catalogues did little to appeal to families. While the competitors’ catalogues clearly sought to attract holidaying nuclear families, Folkturist’s material generally contained few to no images of couples or children and only occasionally did the accompanying texts include information about a destination’s child-friendliness. Passenger statistics from the 1970s indicate that for the Black Sea beach resorts the child to adult ratio was only about 1:10. It is unclear whether this was a conscious business strategy on Folkturist’s part. However, it was arguably in line with the company’s chosen image as a serious travel agency that aimed to ‘broaden the views’ of its customers.
From Crisis to Crisis
Other than the holiday catalogues, the company archive contains next to no information about the years between 1965 and 1971. A brief note on Folkturist’s creditworthiness from October 1972 nevertheless offers some insight into the preceding years’ business. It states that the privately owned shares were now in the hands of Greiff, Bertil Karlsson and Urban Karlsson (another of the four original founders and the international secretary of the CPS). Yet the high-ranking party entrepreneurs had not succeeded in making the company profitable. The liquidity was strained and the creditworthiness low. The difficulties doubtlessly owed to the Warsaw Pact’s crushing of the Prague Spring in 1968, which had caused a great upset for the tourist industry in Eastern Europe. Stranded travellers had to be evacuated and many planned tours to Czechoslovakia and the Soviet Union were cancelled. Swedish travel agencies offered cost-free cancellations and refused to reimburse the Soviets for the last-minute changes. Only Romania, a vocal critic of the invasion, managed to maintain its position in the market in the aftermath of the event. The number of Swedish package tourists going through Constanţa airport on the Romanian Black Sea coast increased from 13,783 in 1968 to 14,141 in 1969, which made it the seventh busiest international airport in terms of the number of Swedish package tourists serviced.
Meanwhile Folkturist’s growing debts to Bulgaria almost put an end to the enterprise. In September 1969, the Bulgarian flag carrier and the Bulgarian state tourist agency claimed that Folkturist owed them more than 200,000 kronor (almost US $30,000). Had they taken legal measures to reclaim the debt, it would have forced the company into bankruptcy. However, the Bulgarian embassy in Stockholm and the Ministry of Foreign Affairs in Sofia intervened and advised against any move that would precipitate Folkturist’s bankruptcy. The chairman of the Committee of Tourism accepted the political diktat but pointed out that this in turn forced Balkantourist to violate ‘the instructions of the Ministry of Finance for a timely securing of hard currency’. The case illustrates the difficulty in reconciling political interests with the quest for profit. The commercial interests of the Bulgarian tourist industry thus gave way to the political interest in maintaining a communist travel agency in Sweden.
In the early 1970s, Folkturist’s management decided to improve its difficult financial situation through a complex restructuring of the business that also involved another communist travel agency. The friendship society Sweden-GDR, a communist front organisation established in 1956, had its own travel agency, Baltor, which was used to channel funds from the GDR to the society. The GDR provided Baltor with complimentary tours and study trips to East Germany; Baltor then sold the tours and transferred the revenue to the society. This indirect economic aid helped sustain the society’s flurry of activities. In charge of Baltor and its shady transactions was Tore Svensson, the friendship society’s long-serving secretary. In 1973, it was agreed that Baltor would serve as the holding company for two new travel agencies: Folkturist-Baltor Resebureau, which would continue to run Folkturist’s business from its Stockholm premises; and Baltor Syd, which would operate out of the old Folkturist branch office in Malmö in southern Sweden. Tore Svensson left his post at the friendship society and assumed a leading role in the management of the two travel agencies and their holding company. Georg Greiff also returned to the leadership of Folkturist-Baltor, and Bror Malmquist, a veteran Central Committee member, joined the management of Baltor Syd.
With Greiff and Svensson at the helm—two key figures behind the East European subsidy schemes in Sweden—one might expect that the revamped Folkturist-Baltor travel agency would continue to pursue similar activities. Indeed there is some evidence that subsidies continued to flow for a while yet. Yet the company’s correspondence with the East European state travel agencies after the restructuring indicates that some of the business relations were rather strained. The fact that Folkturist and the state travel agencies formally shared the same ideological position did not always alleviate the tensions arising from competing institutional interests. At the end of the day, they all needed to generate a profit.
The East European customers had difficulties understanding the new business set-up and showed little sympathy when services were not paid for. For instance, the state tourist agencies of Hungary and Poland continued to deal with Baltor Syd in Malmö in the belief that they were in fact dealing with Folkturist. When Baltor Syd went bankrupt in May 1975, they insisted that Folkturist-Baltor cover the losses. Too late, the Folkturist-Baltor board realised that they had registered a joint travel guarantee with Baltor Syd. Folkturist-Baltor thus inherited Baltor Syd’s contractual responsibilities and suffered an immediate loss of 50,000 kronor plus several thousand dollars of debt to East European tourist agencies. In 1976, Poland’s Orbis travel agency informed Folkturist-Baltor of the country’s new rules concerning foreign travel agents: from now on, all services would have to be paid for in advance. Contractual engagements with Intourist, the Bulgarian Tourist Office and the Romanian Tourist Advertising Agency in 1974 and 1975 illustrate how the relations between Folkturist-Baltor and the East European tourist authorities could vary.
A 1974 agreement on a joint advertisement campaign for tourism to Romania between Folkturist-Baltor and the Romanian tourist advertising agency Publiturism contained detailed litigation clauses. A similar agreement made with the Bulgarian Tourist Office two months earlier was less detailed but still required invoices to be sent prior to any payments made by the Bulgarians. In comparison, the relations with Intourist were so amicable that their 4000 kronor contribution to a joint advertisement campaign would be transferred as soon as the campaign strategy had been worked out. Hints that the South East Europeans were less forthcoming than Intourist emerge from a status report from 1976. It bemoans the repeated delays in the negotiations with the Bulgarians and Romanians over tour programmes and hotel allocation. The report partly ascribed the difficulties to the company’s general rejection of invitations to come and negotiate in person in Bulgaria and Romania—a fact that says much about Folkturist’s limited human resources, but also a bureaucratic South East European business culture, where the renewal of contracts was not a routine matter but required good personal contacts.
Following the bankruptcy of Baltor Syd, Folkturist-Baltor produced an analysis of its sister company’s demise. The report ascribed Baltor Syd’s woes to the falling provisions offered by the big players on the Swedish travel market. In short time, they had all cut their agents’ bonus from 10% to 5%. The changes also affected Folkturist-Baltor as it too earned a significant share of its income as an intermediary of other companies’ package tours. The bankruptcy came after a year that had already proved trying for the company. In a letter to Intourist, the boss admitted that 1974 had provided ‘relatively poor results … on our own arrangements’. The year of 1975 was intended to be ‘a year for consolidation and regaining of the old circle of customers of Folkturist’. Focus was on cooperation with Förbundet Sverige-Sovjetunionen (the national Sweden-USSR association of friendship societies), Bore-Lines (a Baltic cruise company) and its Danish sister company Folketurist, which was affiliated with the Communist Party of Denmark (DKP).
Folkturist-Baltor’s ambition was not to merely serve as a link between customers and competing tour operators but also to provide its own package tours. However, in the preceding months, this strategy had already suffered a blow not mentioned in the letter. The old Baltor company had traditionally enjoyed the lucrative role as the main tour operator in Sweden for the Baltic Sea Weeks (Ostseewochen). The flagship event was launched in 1958 to promote the East German state in Scandinavia during its struggle for international recognition. When that had been achieved in 1972, the event was repurposed to propagate for a European security conference and to maintain the image of the GDR as a successful socialist state. Folkturist-Baltor had inherited responsibility after the reconstruction, but in the winter of 1974-1975, the East Germans decided to hand over its Swedish travel arrangements to the Swedish-GDR friendship society. However, it took a while before the organisers communicated their decision to the travel agency, and when the news finally reached Folkturist-Baltor, the company had already produced 15,000 copies of the 1975 travel programme. Losing the contract thus resulted in a substantial financial loss on top of the lost revenue.
In 1976, the company suffered another setback. That year Förbundet Sverige-Sovjetunionen, now a key customer of Folkturist-Baltor, began to deal directly with Aeroflot instead of going through their travel agent. Despite its grand ambitions, Folkturist-Baltor was thus still small fry in the Swedish travel market in the 1970s. Its turnover was generally a fifth of Danish Folketurist. In 1977, the Danes had a staff of 17, while an inventory of the Stockholm premises from 1976 testifies to its modest setup, with just three typewriters, 4 desks and 8 chairs. Lacking in capital and human resources, the company’s aspiration ‘to swell the number of tourists for the socialist countries’ would remain an elusive goal. On top of this, events beyond their control such as the devastating earthquake in Romania in March 1977 and the Soviet invasion of Afghanistan, two years later, curbed the interest in holidays in Eastern Europe. And then there was the simple fact that doing business with the East European state travel agencies was never easy. As one guide concluded after a tour of the Soviet Union in 1978, it would be better not to list hotel names in the programmes ‘given Intourist’s predilection for improvisation and sudden changes’.
Personal discord, the disclosure of dubious business practices and disagreement concerning the direction of Folkturist-Baltor marred the business in the final years of the 1970s. The conflict escalated in October 1980 when the board member Edmund Larsson provided the Party leadership with a thorough analysis of the company and the Swedish travel market. Larsson reckoned that a minor company like Folkturist-Baltor had small chances of survival. The company had already lost more than 150,000 kronor when various debtors folded. With just four employees, the company had a hard time negotiating early and advantageous deals with the overly bureaucratic and unpredictable East European agencies. This in turn resulted in dissatisfied customers and a poor reputation, hampering future sales. Moreover, since the company possessed IATA rights to sell flight tickets, almost 85% of its 11 million kronor turnover derived from this intermediary role between airlines and other travel agents. This cash flow required high liquidity while profits remained slim. At the same time, servicing the international travel market watered down the company’s profile as an Eastern Europe specialist. In that situation, the company was unable to guarantee a steady revenue to the Party. On the contrary, it was a liability. Larsson thus recommended that the business be discontinued and Folkturist-Baltor shut down.
The analysis did not result in immediate changes, but the situation was obviously untenable. Over the seven years from 1973 to 1979, the company had yielded the Party an average annual return on its 300,000 kronor investment of about 4%. At the same time, the annual inflation rate was hovering at about 10%. By the middle of 1981, two employees emerged with an offer to buy the company. This, however, sparked a fierce reaction from Robert Ulrich, a party loyalist with insider knowledge of East European travel business and the Swedish travel market. In an indignant letter to the board members, he strongly recommended that they reject the offer. Having worked for Czechoslovak Airlines in Sweden for 10 years, Ulrich claimed to have close contacts with all the East European national carriers and state tourist agencies. He also claimed to have a comprehensive overview of what he described as Folkturist-Baltor’s deteriorating relations with the airlines and tourist agencies. Even more so, Ulrich lamented the company’s growing sale of airline tickets and particularly its role as intermediary on the Swedish market for Pan American—a company that supported Ronald Reagan’s presidential campaign in 1980.
The politically unsound and financially detrimental integration of Folkturist-Baltor into the global travel industry seemed irrational to Ulrich. He explained it as a scheme by the two bidders to push down the price of the company in an attempt to secure it below its actual value. This grave accusation came after years of internal disputes. In 1977, Edmund Larsson and the company CEO, Yngve Karlsson, had been accused by board members of keeping company income out of the books and spending it on private journeys. It is likely that Ulrich was biased against the two bidders, and the veracity of his accusations cannot be proved. However, his and Edmund Larsson’s analyses of the company’s parlous finances and poor position in the travel market were most likely correct. At any rate, their suggestions were accepted by the Party, and the company reoriented geographically towards Eastern Europe. There were no more expensive glossy catalogues and the company concentrated on preaching to the converted: Communist Party members, sympathizers and ‘leftists’ in general. The 1982 catalogue opened with a presentation of the revamped company. Its focus would be ‘socialist countries and countries with progressive societies’. The content of its package tours returned to the original ideas aired in the early 1960s. Instead of straightforward beach holidays, its tours would always include study visits, lectures and discussions in order to provide a fuller picture of the country. Twenty years after its foundation, Folkturist had thus come full circle, but the back-to-basics strategy did not end the company’s woes. Folkturist made a loss of 200,000 kronor in 1982, and the following year the budget was still bleeding red with a 150,000 kronor loss. In March 1984, the executive committee of the CPS thus decided to close the business; on 5 October 1984, the court in Stockholm confirmed the liquidation of Folkturist.
At first glance, the history of Folkturist is an example of a failed enterprise. Founded in 1961 as a Communist Party venture to promote Eastern Europe and to generate revenue for its owners, it largely failed to achieve either of its aims. The company never sent a significant number of tourists to the socialist countries, and it did not provide the Communist Party of Sweden with any substantial return on its investment. On the contrary, Folkturist’s survival occasionally hinged on the good will of its East European partners, who sustained financial losses to prop up a communist travel agency in the West.
Lack of professionalism put the company at a disadvantage in a highly competitive market and eventually led to its demise. Personal strife marred the company throughout much of its existence. The decision to gradually immerse itself in the global travel industry through an IATA accreditation and a collaboration with Pan American Airlines antagonised Party loyalists and raised the stakes as it required high liquidity. Folkturist’s handful of employees struggled to nurse personal contacts among the eastern partners. The company’s small passenger volume offered little leverage in the negotiations with the state tourist agencies, which prioritised bigger partners. Poor planning and communication increased its transaction costs, which was lethal in a travel industry notorious for its slim profit margins.
Upon closer inspection, however, the fate of Folkturist is not so very different from many other travel agencies at the time. When the industry expanded exponentially in the 1950s and 1960s, it attracted countless enthusiastic entrepreneurs, many of whom were soon forced out of business again by cut-throat competition. Indeed, defaulting debtors were a constant headache for the Folkturist leadership. At the same time, Folkturist faced competition from larger and often more professional tour operators. Because these companies offered a full range of destinations across Europe, they were less sensitive to local shocks such as political crises and natural disasters. For Folkturist, however, the Warsaw Pact invasion of Czechoslovakia and the earthquake in Romania had an immediate impact on its balance sheet.
A few years after Folkturist folded, revolution swept through Eastern Europe and laid bare the catastrophic results of communism for anyone willing to see. Considering what we now know about economic mismanagement under communism, it is hardly surprising that the Communist Party of Sweden struggled to make a go of a tourism business. However, the history of Folkturist’s predicament is actually a proof of how at least some of the Eastern bloc enjoyed a measure of success in their bid to benefit from the international leisure industry. Folkturist’s limited share of the Swedish market for tourism to Eastern Europe owed much to the success of its commercial competitors. This in turn shows that the East European tourist agencies managed to attract broader segments of the Swedish travel market.
As this article has demonstrated, the attempt to use tourism to Eastern Europe for the purposes of cultural diplomacy competed head on with commercial interests in securing hard currency. In Sweden, the communist-owned travel agent displayed a remarkable pragmatism, organising tours to Franco’s Mallorca and to Greece during the Regime of the Colonels. Bulgarian and Romanian beach resorts always had a prominent position in Folkturist’s catalogues, just as they dominated the East European sections in the catalogues of Folkturist’s commercial competitors. This illustrates the preference of eastbound Swedes for sun-and-sea tourism and calls in to question the utility of ‘political tourism’ for understanding the development of the eastbound tourist business in Cold War Europe. The history of Folkturist sheds new light on the post-war European travel industry and the diverse and competing interests at stake as it expanded on either side of an increasingly porous Iron Curtain.