Could the recovery of tourism in countries like Turkey threaten to take the wind out of Croatia’s wings?
As Marija Crnjak/Poslovni Dnevnik writes on the 22nd of May, 2018, Croatian hotels and campsites that depend on the arrival and big spending of Northern Europeans such as Germans and Britons have picked up on a dip in bookings as the wind returns to the former top tourist destinations of Turkey, Egypt, and Tunisia.
Riding firmly on the wings of last year’s record breaking results and the overall success of investment in quality growth, hotel companies in Croatia are entering 2018’s tourist season with a higher price growth than they did last year.
At the same time, market analysts and travel experts have warned, Croatia’s booming tourism industry is now faced with the recovery of what were temporarily burdened Mediterranean rivals. This year, Croatia’s hotels can hardly sit back and count on a wealth of profitable last-minute sales that were flowing in with ease last year due to the turmoil taking place in the Middle East, which affected longtime popular destinations like Turkey, as well as Tunisia and Egypt. Poslovni Dnevnik made contact with several companies to press them on this matter, and for now, at least, it appears that most of Croatia’s tourism companies aren’t feeling the potentially negative consequences of competitor recovery, and potential price hikes justify investment and growth in quality.
“The general booking in hotels and camps on the Adriatic is better than it was last year, which is encouraging at the minute, but things haven’t yet been resolved for the peak season itself, given the fact that there is still capacity that hasn’t yet been filled, which depends on the demand of individual guests who haven’t yet completed their reservations. Hotels and campsites that depend on the German and British markets feel a considerable dip on these markets, which are once again turning their sights towards Turkey, Egypt and Tunisia,” stated Sanja Čižmar of HD Consulting, who conducted research back at the beginning of this month on the current movement and availability of hotels and camps. The analysis showed that the general weakness lies in the peak summertime months of June and July, especially with regard to those most oriented to the German market.
As far as Dubrovnik’s market is concerned, for example, July and August’s bookings are currently weaker than they were last year, and the bookings for outside the main tourist season are much better than they were last year. The city’s hotels have boosted direct sales and sales channels through OTA (online travel agencies), which increased their average prices. Leading companies in the hotel and campsite chains are recording 10-15 percent better revenue for 2018, but, with that being said, even in 4 and 5 star hotels, there are some periods with a considerable drop in bookings when compared to last year.
HD Consulting’s field survey showed that hotels and campsites raised their prices by 4-5 percent on average, which is a significant step as inflation has risen over recent years (by about 1.5-2%). Investments in the buildings themselves (without raising the number stars/raising the hotel category) saw an average price hike of about 7-10 percent, while those who increased their ”star” number, increased their prices by more than 30 percent owing to their addressing of new market segments. Although the season is widely expected to be at the level of last year’s, or even be better, the owner of the German agency, ID Riva, Selimir Ognjenović, warns of the strong return of tourism kings such as Turkey, Tunisia and Egypt.
“There are hotels that have closed down their sales in January because of last year’s experience (success), counting on filling them up during the season and achieving higher prices, but such a strategy might prove to be wrong because of the return of strong competition from Turkey and Africa. Last year, we had a situation where almost 2.5 million guests who were relatively late with their realisations that they couldn’t go to Turkey coming to Croatia. This pressure isn’t going to happen this year, we’ve got information that alongside the increase in the bookings of family holidays in Turkey, the average price is rising as well, which can result in the opposite situation, and that is that this year, Turkey will take from our well, just as we did with theirs last year,” concluded Ognjenović.