June 26, 2020 — A long-awaited incentive program was meant to solve a basic problem: Croats don’t vacation in Croatia. (At least not on the books). Yet the plan’s odd limitations and poorly-timed launch during a global pandemic and cratering economy render it dead on arrival. Say hello to the zombie voucher program nobody wants and is about to get anyway: the Cro Card!
Croatia’s Tourism Minister stood at an Istrian spa and foresaw the convergence between medical tourism and a new, unique voucher program meant to motivate locals to travel within their own country.
“I believe that our Cro Card will be partly focused on health tourism,” the minister said.
Though the world’s tourism hordes keep adding Croatia to their travel bucket list, Croats statistically don’t share the fervor. As foreigners’ overnight stays skyrocketed over the last 15 years, Croats’ remains flat, and are plunging as a share of overall tourism spending.
That visit to Istria’s spas took place on Sept. 8, 2016. The tourism minister was HDZ’s Anton Kliman. Tihomir Orešković was busy bungling the Croatian language as prime minister.
He would be out of a job within two months, as HDZ held a public mutiny against the same premier it accepted in a power-sharing bargain. The ensuing early elections installed Andrej Plenković as prime Minister.
Many of Oreskovic’s programs were tossed into the metaphorical bonfire held whenever power changes hands in Zagreb.
Yet Kliman’s successor Gari Cappelli kept the Cro Card voucher program alive. And like many proverbial zombie ideas in the Croatian government, it’s back again. Nobody wants it.
The program expands the tax-free bonuses the government allows employers to dole out to include a HRK2,500 “Cro Card”. The “bonus” would be lodged in a debit card used for accommodations, a night out at dinner, or other tourism services.
But only within Croatia.
Only at participating businesses.
And not during the high tourism season.
And no online purchases. No reservations or bookings via app or internet. A.k.a.: how the world makes its travel plans.
(These early restrictions have been loosened now that a deadly pandemic put the kibosh on the 2020 season.)
The program was more or less copy-pasted from Hungary’s Szep Card program. Similarly incentivizing employers to dole out vouchers, it ultimately increased overnights by domestic tourists in Hungary by about 30 percent. The Szep Card took off on the heels of mass adoption by government-owned or backed companies.
Croatia’s program took a bit longer to create.
Cappelli’s 2018 report, the first of his tenure, quietly slips in a budgetary item for the Cro Card program. The country spent half a million kunas on the vouchers in 2017; not a single Cro Card was distributed.
It was the start of a mythical, long-touted slog of a launch — perpetually on the verge of release only to cower back into the governmental shadows when the howls of criticism started flying.
The false starts and retreats leave one’s neck aching from whiplash:
Get ready for the Cro Card in 2018! No?
Ok… How about a test run in 2019? Nope.
Cro Cards coming in January 2020! No, way…
Cro Cards launch on April Fool’s Day, 2020! Nope again!
How about June 1, 2020? Eeehhh…
Ok, July 1. In five days.
The program expanded to include travel agencies, tour operators, private rentals, package deals on accommodations, and charter boats. In other words: the Croatian tourism industry. Restrictions on when the card can be used were also disbanded after it was clear this year’s tourism numbers wouldn’t match 2019’s.
“Despite the problems with the corona crisis, we believe that employers will respond to these cards,” Cappelli said. “Now the crisis will certainly reduce it, but [the Cro Card] is in the government’s long-term program, and the benefits are expected in the next few years.”
The Plenković government released a poll suggesting about half of all employers in Croatia had some interest in participating in the Cro Card program.
That was, of course, before the world plunged into a hellish pandemic which has left firms hemorrhaging cash and collapsing faster than honey bee populations in northern Croatia.
Glas Poduzetnika (the Voice of Entrepreneurs Association) released its own poll, showing a vast majority of employers have no intention of handing out Cro Cards (12 percent didn’t even know what the cards were).
Public-sector unions and employees also resoundingly rejected the program.
Croatia’s tourism ministry remains mum on how many businesses have signed up to use the Cro Card program, despite several inquiries by Index.
Hrvatska Poštanska Banka has regardless ordered 40,000 of the cards — about HRK100 million-worth of potential tourism spending.
“It is crazy that anyone will pay a single kuna on that card,” Hrvoje Bujas of the Voice of Entrepreneurs Association said. “It is clear that employees in the private sector will not receive this card. I also find that it is unusable, cannot be used online, and thus prevents online travel agencies in Croatia, which are hit hard by the crisis, from selling hotel rooms.”
Aside from the clear logistical headaches and bizarre arbitrary limitations, there’s perhaps a bigger reason why Croats aren’t adopting the Cro Card program en masse: cash is a bedrock of the tourism industry in Dalmatia.
Croatia infamously twisted itself into odd contortions in 2013, trying to “fiscalize” its economy and eliminate grey market activity by forcing businesses into a nationwide accounting system while also demanding receipts be handed out for every transaction.
Any local tourist who has traveled in Croatia knows the system is a farce, detoured and cleverly ignored by everyone from restaurants to charter companies and hotels.
The Cro Card would immediately add millions of kunas onto the radar of a government starved for more tax revenues during what is sure to be an epic economic downturn. It’ll also widen the base of revenues many businesses already feel are too highly-taxed by the government.
So maybe the Cro Card isn’t seeing mass adoption because Croats want to choose where they’ll spend their money.
Or it’s a poorly-designed effort at stimulating economic spending during the worst economic downturn in recent memory.
Or maybe, it’s a sly attempt to shine a light on existing economic spending, while increasing the government’s tax revenues
Regardless, the Cro Card’s long history of reanimation after certain death suggests this isn’t the last we’ll see of them.
