In foreign markets last month, the results of tourist bookings in Croatia for all of 2019 were weaker than expected due to slowed down or reduced demand, but also from the increasing number of competitors in the Mediterranean. Thus, the Croatian tourism sector will have to put in more efforts to get the results this year, reports Poslovni.hr on March 2, 2019.
President of the Association of travel agencies at the Croatian Chamber of Economy, and the president of the management board of tourist company Uniline, Boris Žgomba, added that the information on reduced bookings this time of the year is from virtually all channels and from many of their Croatian and foreign partners.
“There has been a reduction in foreign demand, which could be seen already in the summertime when there are empty capacities. It was then clear that the dynamic overhead we had from 2016 to 2018 will not last forever. I am sure that many in the Croatian tourism sector are aware of this and are working on adjustments,” Žgomba said to Hina.
The current lower demand for domestic and foreign travel agencies and tour operators, means that they will have to invest in additional marketing and promotional activities to fill in their programs, almost immediately, because in Croatia, they account for about 70 percent of the total pre and post-season tourism , which largely depends on their total annual business results.
“By selectively looking at the tourism segment, some of the hotel capacities are now poorly filled for all of 2019, with the fact that the backlog of the previous bookings in hotels compared to the same period last year was lower than in private accommodation and camps. It is important to note that all this is not another reason for panic, because the time of more intense foreign bookings is on the way, but it is very likely that this year will be more ‘last minute’ and we will have to fight for every guest,” says Žgomba.
He points out that such trends do not only apply to Croatia, but also many other destinations in the world. Žgomba added that it is caused by the increased supply of competitive capacities in the Mediterranean, their more intense marketing efforts followed by significant price advantages, and partly the recession in some European countries. Europe’s demand for shorter and longer vacations is being redirected to other destinations, such as Turkey, Greece, North African countries and their own countries.
Due to all this, Žgomba believes that more needs to be done this year in terms of tourism promotion at the national level, and it is good that the Croatian National Tourist Board recently raised 10 million kuna for marketing and PR activities in 16 markets, because, as he says, “it is not time to wait, but for prompt actions”.
Important campaigns are also targeted through social networks and all other channels and communication platforms for all periods of the tourist year, and Žgomba believes that it is necessary to continue opening regular and charter flights and introduce other combined measures.
Regarding the dynamics of sales, which, as well as the price depends on the policy of each individual subject, Žgomba thinks that the prices should be mindful, but that lowering them is not a solution. Instead, it should be about what value we give for the money and whether we have customers at all.
“I consider it a key factor – and not that domestic tourism is viewed exclusively through the prism of price, which is only one of the factors of competitiveness. Tourists to Croatia do not come only because of low or high prices, but because they get adequate value for their money and I am convinced we are globally competitive here,” said Žgomba.
Žgomba, therefore, expects that in the foreseeable future, certain price corrections may be made. He added that it is high time to reduce the VAT rate in tourism to the level of competitive Mediterranean destinations and to adequately regulate the special procedure of taxation of tourist agencies, which still puts them in an inequitable cost market position.
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