Croatian Tourist Agencies Struggle as Government Measures Awaited

Lauren Simmonds

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As Poslovni Dnevnik/Marija Crnjak writes, the rebalance of this year’s state budget, which was presented by the Minister of Finance Zdravko Maric in Parliament on Wednesday, should include the money that will be spent on measures to help Croatian tourist agencies prepare for the rapidly approaching summer season. This particular sector is literally on its knees.

As has been unofficially found out, the decision on the adoption of measures that Croatian tourists agencies have been asking for for months should be made at the Government session next week, after the adoption of the supplementary budget.

It will be more than two months after the government announced the adoption of measures to help these agencies, which have so far been covered only by corona-fees for job preservation, and that is simply not enough for them to restart work whatsoever.

Croatian tourist agencies are still wary of such statements until they see concrete solutions actually made, but although help is arriving quite late, they say it will be more than useful to them at long last. It is a question of survival of about two thousand economic entities that have practically had no income since back November 2019, so for more than a year and a half.

It is not yet known whether this planned Government assistance will come in the form of the reimbursement of operating costs for the first months of 2021, as proposed by the agencies at meetings in the Ministries of Tourism and Finance, or whether it will be defined in some other way.

“We’ve been warning for months that we aren’t going to have anything with which to start up our business when it starts again, and we’re appealing to the authorities in the Government about it. Let it be known that Croatian tourist agencies didn’t, unlike those from the catering and hospitality sector, receive any compensation for their business expenses, although they had even less turnover than some in that aforementioned sector. Restaurants were allowed to deliver food even during lockdown and then their terraces were allowed to be opened.

Although the work of Croatian tourist agencies was never formally banned, the fact is that due to all of the measures to prevent the spread of the infection, Croatian tourist agencies didn’t have any income throughout the past year, but also during most of the time this year,” stated Tomislav Fain, President of the Association of Croatian Travel Agencies (UHPA), which numbers about 240 agencies.

The situation is critical for many Croatian tourist agencies that may have saved employees, but now it is a matter of keeping their heads above water. The summer season practically started in Croatia last weekend, as did the reservations which are accelerating with the opening of the borders.

Katarina Hauptfeld, the owner of the Katarina Line Adriatic Cruise Agency, complained that she had a problem with the organisation of transfers and other services that are crucial for the realisation of what they offer.

“If the Government doesn’t urgently help out with non-refundable assistance to Croatian tourist agencies, I honestly don’t know how we’re going to manage this season. We have a paradox, our demand is growing, and we’re fighting to realise the service,” complained Hauptfeld.

Fain explained how company owners are trying to manage in all sorts of ways.

“According to the data from the Tax Administration and the Central Bureau of Statistics, the average decline in the activities of Croatian tourist agencies in 2020 was continuously above 85 percent. Most agencies in the market have been around for a long time, they’re family businesses and they’ve invested a lot in their business and don’t want to lose it.

That’s why they’re using their own reserves, private loans are being taken out en masse, property is being sold, a lot is being taken on in terms of debt until some income starts to be generated from the end of June or the beginning of July. But it’s all short-lived, and that’s why I hope that the announced help from the Government will come soon,” said Fain.

It isn’t known how many Croatian tourist agencies closed their doors due to the pandemic. Such an outcome awaits those who entered the murky waters of the ongoing pandemic on shaky feet, says Boris Zgomba, the president of Uniline.

“Our agency was lucky in that we welcomed the pandemic in a healthy state, but if someone had told me twp years ago that I’d be working like this for more than a year and survive without much damage, I wouldn’t have believed them.

Certainly, this was helped by the Government’s fast-paced job preservation measures which helped keep to the sector from losing the manpower it needs to continue doing business once business starts up again. Now things have finally started moving again, but we’re in trouble because some will have workers, but they won’t have a company that will not survive, and that’s why assistance measures to prepare for the season are crucial,” said Zgomba.

Unlike Croatian tourist agencies, agencies in the surrounding countries, primarily in Slovenia, have previously received assistance from the budget for liquidity and cost recovery, and are currently in an advantage over their Croatian counterparts.

“We have nothing against the open market, but we believe that everyone should have equal preconditions for work, which isn’t the case at the moment. That’s why it could happen that the work of Croatian tourist agencies is done by Slovenian agencies, because they’re in a better starting position than we are.

It should also be borne in mind that the amendments to the Law on the Provision of Services in Tourism will soon enter into force,” noted Zgomba.

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